Pan-Europe

CBRE Global Investors is one of the world’s leading real asset investment managers with $114.5 billion in AUM.

Project Goal

CBRE GI wanted to investigate the feasibility and business case for installing electric vehicle charging stations at several assets within one of their European portfolios, to meet the growing adoption of electric vehicles across Europe.

They asked Longevity Power to provide a recommendation for charging bank placement, size, and charger type, and develop site-level analysis with an overview of estimated capital cost, IRR, and emissions savings for several logistics and hotel assets in France, the Netherlands, and Spain.

Challenges

The EV charging space is rapidly evolving, which makes choosing an appropriate bank size and charging technology challenging: For many clients, the greatest barrier to entry when considering EV charging is the speed with which the technology is changing. Understanding which equipment is available and best suited to each site is not always clear, and potential site hosts face challenges when estimating the current and future penetration of EV drivers which would determine the required size of the EV charging installation.

Charging demand is highly dependent on difficult to forecast charger utilisation rates: It can be extremely difficult to project EV charging demand for an individual site. This lack of clarity is a challenge when estimating the level of usage each potential charging station will receive, which has a very strong direct impact on the project’s potential payback and emissions savings.

The best ownership and operation model for EV charging is not always clear: Clients initially exploring EV charging options often face the challenge of identifying the most suitable ownership and operation model. Stations can be fully owned, fully leased from a third party, or have mixed ownership, and all options come with risks and benefits for cost, control, and service responsibilities. This can be particularly challenging when appraising opportunities for coordinated installations at multiple sites.

Solutions

Recommendation on charger type based on asset-specific use cases and user profile: Longevity highlighted the asset features that guide decision-making when determining charging equipment and provided recommendations on the suitable charging type and ownership model, upon which feasibility scenarios were established.

 In-depth study of cost estimates, regulatory framework, and charging market pricing: Longevity regularly conducts market research on current equipment and contracting costs, charging business models and policy incentives for participants in European charging markets. This allows us to provide asset-level estimates for high-level portfolio appraisals and identify subsidies and other incentives across multiple assets in multiple countries. Country-level analysis is directly integrated into feasibility modelling, improving specificity on costs, revenue and utilisation inputs.

Multi-scenario analysis with sensitivity analysis on utilisation: Longevity provided CBRE GI with multiple scenarios integrating variations in charger bank size, utilisation rate, and revenue model. This gave insights into the key cost drivers and risk factors, and baseline expectations for the potential ESG and financial performance of the systems.

Benefits

Following our study, CBRE GI was able to:

• Estimate high-level CAPEX requirements and visualise both conservative and optimistic business scenarios
• Evaluate which equipment type and installation size was most suitable based on the use case and site layout
• Compare multiple sites on a like for like basis with regard to potential CAPEX, IRR, and emissions savings, and prioritise assets for development
• Use the analysis to engage existing tenants and form the basis for an installation project budget