EV charging rollout held up by land leases for substations

The rollout of electric vehicle charging hubs is being held up by the negotiation of leasing agreements between networks and landowners for new substation sites, a leading charge point operator (CPO) has warned.  

Lewis Gardiner, director of operations for Osprey Charging, has urged distribution network operators (DNOs) to work together with CPOs to streamline and standardise the process for connecting charging stations to the grid.  

Speaking to Utility Week, Gardiner said the growth of the sector has exposed obstacles to the rapid rollout of electric vehicle charging infrastructure: “Over time as the market has evolved. There are more players in the market and the projects themselves have got larger.  

“Whereas in 2019, the most people were installing really were two, three, four charge points on a site, now we’re installing eight,12,16, 20, 32 – all massive hub sites that require a lot of power.”  

He said the “biggest blocker” they now face is the agreement of land leases for new substations on sites that are owned by third parties: “Up until fairly recently, the terms of those agreements have been fairly rigid and not commercially minded.” 

Gardiner said he was referring to cases where they agree a deal with a landowner to build a charging station on their property, including a new substation.  

Once installed, the substation will be handed over to the local DNO, or more often an independent DNO (IDNO), which must therefore sign a leasing agreement with the landowner.  

Even in instances where the substation is being taken over by an IDNO, Gardiner said the local DNO will still be involved in the lease. And he said some have a requirement that the term of the lease should be extremely long – up to 99 years.  

Giving the example of retail parks, Gardiner said many landowners are unwilling to agree to such a long lease “because they may want to develop that land in 25, 30 years’ time”. He said some DNOs have been “very strict” about enforcing these requirements, taking the position that “it’s 99 years or nothing”.  

“That has been the main sticking point I would say over the last 24 to 36 months and only in recent weeks have the DNOs come out to update some of their policies to assist with the removal of some of those barriers around substation leases,” Gardiner explained.  

He said there may also be “very specific title issues where there may be a consent required or certain access rights. Again, there’s been a lot of rigid thinking in the past and a little bit more flexibility has been needed.” 

Gardiner said a few DNOs have recently made moves to address the problem: “In the last six months, I think we’ve seen some really good steps forward by some of the DNOs to really be industry leaders. I would single out National Grid Electricity Distribution and UK Power Networks (UKPN) as two of the DNOs that are really trying to make it work.”   

“In the cases of National Grid and UKPN, there’s been some internal discussions and changes in policy,” he added. “What would be fantastic is if all the DNOs could be aligned on those policies as well – standardised across the country.” 

Gardiner acknowledged that the required changes “may have ramifications across other parts of the business” and “can be hard to implement sometimes”.  

Nevertheless, given “sheer volume of projects that CPOs are trying to deploy”, Gardiner said it is vital that this issue affecting “thousands of sites” is resolved promptly. He said the changes they are requesting could significantly reduce deployment times, noting that negotiations over leases have caused delays of up to nine months in some instances.  

Gardiner said the removal of this obstacle would make a “huge” difference to the sector, saving millions of pounds and accelerating the adoption of EVs by drivers, many of whom make purchasing decisions based on the charging infrastructure available in their area.  

Despite the recent “negative press” around a lack of network capacity for new connections, Gardiner said he is far less concerned about this issue, saying reinforcements, when necessary, can be done “quite easily”.   

More generally, Gardiner called for greater standardisation between DNOs of the process for connecting charging stations: “We definitely need more collaboration across the whole industry to make things happen. These are not the only things that need to change. There’s a list of 10, 20, 30 other things that we probably do need to change as well.  

“But let’s clear those big-ticket items first and then we can look at checking off the much smaller wins further down the line.” 

Gardiner said he is optimistic that the issues they are concerned by can be overcome: “I think that’s why we’re so we’re being so vocal about it. These are problems that can be solved quite easily, we think, with just more communication and collaboration and understanding of what needs to be done.” 

He said there is also an onus on CPOs to collaborate more effectively but said the sector is taking steps to do this, for example, launching its own dedicated trade body last year named ChargeUK.  

In a policy paper published in November, the trade association called for the charging and energy industries to adopt a voluntary code of conduct, “underpinned by a ‘duty to cooperate’ covering charge point operators, public bodies and utilities.”  

Among other things, ChargeUK said the code should include “standardised legal documents to be used by all DNOs, IDNOs and CPOs to cover land rights and access, wayleaves and substation leases.” It said the government and Ofgem should consider incorporating these into licence conditions and energy codes. 

Responding to Gardiner’s comments, a spokesperson for the Energy Networks Association said: “The UK has seen a 47% growth in public EV charging points over the last year. Network operators are working hard to make it better, faster and easier for installers of these points. Since April last year, 2GW of capacity for demand projects has been added to the grid.

“We’re continuing to consult with industry, including charging point operators and independent network operators, to explore the potential for greater flexibility and standardisation of land lease agreements within the current regulatory regime. Alongside our partners we’re calling for the wider reform of the process for securing land rights and consenting for infrastructure development to ensure the process is fair and effective.”