Gov SCI Scheme is an unnecessary subsidy

The Strategic Charging Infrastructure (SCI) Scheme

This planned government subsidy is set to spend £190m on "grid strengthening" for EV charging at 20 Motorway Service Areas (MSAs). This is an unnecessary handout:

1. Many of the shortlist sites do not need the additional scale of charging proposed; there is sufficient provision on-site or nearby, and especially with battery technology.
2. MSA operators can afford to invest themselves over the time period; they pay out tens of millions of pounds in dividends each year to parent company shareholders.

It also is set to entrench monopoly positions by handing control of this taxpayer-funded infrastructure to the MSA operators, who now operate their own EV charging networks, with no competition requirement, rewarding failure to invest in the core fuel services these operators should provide in exchange for their monopoly position.

Most of the shortlisted MSAs sit on stretches of motorway that are already well-served by ultra-rapid charging.

For example, there are already 47 ultra-rapid chargepoints (CPs) installed at Leicester Forest East services, there are 63 CPs on the M1 with-in a 25-minute drive of the services, and 49 CPs are within just 5km. At Leicester Forest East services the Department for Transport (DfT) have suggested funding a connection of up to 10MVA. A connection that large is capable of providing power for as many as 120 additional ultra-rapid CPs. That means by 2030 there could be 230 ultra-rapid CPs serving just this short stretch of the M1. With ever-improving charging capability of both cars and charge points, this would be a serious overbuild. 

MSA Operators (MSAOs) can afford to invest themselves to upgrade the power at their sites in order to provide a core service: fuel

The MSA sites selected by DfT for funding are assets of Macquarie, USS, Arjun Infrastructure and other private equity institutions, who extract tens of millions of pounds annually in dividends and intercompany transfers. They should be investing in grid upgrades themselves as part of maintaining the core fuel services they are granted a monopoly to provide. 

Dividends paid to shareholders in 2024: 

• Welcome Break £51.3m 
• Moto £23.9m 
• Roadchef £23.4m 
• Extra's accounts are held offshore and therefore not publicly available

Many of the same private equity institutions, that own the MSAs, also hold equity in UK water companies. It is incontrovertibly clear that they have been under-investing in water infrastructure, and this is being repeated by the MSA operators in EV charging on their sites. The government should not reward a continued failure to invest in critical public infrastructure. 

The “required” grid capacity DfT has at each MSA site is unnecessarily high

This is because insufficient attention has been paid to battery energy storage solutions (BESS). BESS can dramatically reduce the required grid capacity for a site. Ignoring utilisation of BESS means that the scheme’s headline cost justification is vastly overstated. 

The evidence for BESS is already operating at scale. Tesla’s site in Lost Hills, California hosts 168 charging bays on as little as a 1.5MVA grid connection, made possible thanks to the 39MWh battery and 11MW solar array installed on the site. This allows most daytime charging to run off-grid and increases the sites capacity to theoretically support more than 1,000 drivers per day. This was possible without subsidies and demonstrates how BESS can improve commercial viability at a site, removing any need for government intervention to begin with. 

The subsidy hands total control of the new grid capacity to MSAOs by not building in any competition requirements

The shift from requiring “two or more” Charge Point Operators (CPOs) to make use of a connection (like in the Rapid Charge Fund) to just “one or more” CPO is scandalous. MSA operators increasingly run their own CPO businesses and leases for independent operators at MSAs are currently expiring as they come up for renewal. This scheme hands MSAs unregulated ultimate control over government funded grid connections. 

MSA fuel providers have already been slapped with a consumer class action for abuse of dominance and unlawful, excessive and unfair pricing of petrol and diesel. That case is a warning of what happens when MSA operators control a fuel monopoly unchecked, it shouldn’t be allowed to repeat itself especially with the backing of government funds. 

We are calling the Department for Transport to better assess: 

1. What is the realistic scale of new capacity needed for charging, given the nearby provision serving the same stretch of motorway and the opportunity for battery-assisted capacity? 
2. Are the MSAOs able to fund the more minor upgrades themselves, especially if staged over time to respond to real demand? 
3. What safeguards are in place to reduce the very real risk that the subsidy is anti-competitive in practice?

https://www.rpclegal.com/press-and-media/phillip-evans-and-rpc-secure-funding-for-class-action-over-fuel-prices-at-motorway-services/ 

https://eleport.com/largest-ev-charging-hubs-in-the-world/  

https://shaffercon.com/industry-insights/tesla-worlds-largest-supercharger-los-angeles-curbside-charging-expansion-volkswagen-network-access-dynamic-pricing-long-beach-ev-infrastructure/