Meridian Energy is New Zealand’s largest 100% renewable electricity generator, producing 35 percent of the NZ’s electricity, and is also the fourth largest electricity retailer in the NZ market.
The Driver
Meridian began working with Smartrak in 2015 following the production of a business case supporting improved health and safety of their staff across their fleet, and of lone workers operating in the field.
Following a review of Meridian’s fatal risk framework, the Corporate Safety and Health Team identified driving as one of the top 10 fatality risks within the organisation. Nick Robilliard – Procurement & Property Manager (and manager of Meridian’s vehicle fleet) has already identified vehicle GPS as a tool to manage this risk and this review provided the lever to introduce this technology across the business.
“Our business is involved in working in provincial and rural areas where we have lone worker situations. Some of these areas where staff are driving are also quite volatile in terms of the weather and other risk factors”, outlined Nick when discussing the organisation’s operations.
Because of these identified risks, along with keeping pace with the industry on technology and fleet trends, Meridian ran a competitive sourcing process and selected Smartrak to initiate a fleet management system that would help track and manage their staff when driving, and ensure they were aware of their location in an emergency. Nick also highlighted additional ancillary benefits he believed Meridian would benefit from in the future including fleet optimisation, road user charge rebates for their off-road driving, improved fleet visualisation, and tracking of carbon emissions.
The Fleet
Meridian’s circa 95 vehicle fleet is a mix of commercial utility vehicles, passenger pool vehicles, trucks, ATVs and other tools. To track and monitor these tools, Meridian use a variety of technology from Smartrak, including AVLs on all vehicles, Remoras on trailers and high-value passive assets, and are trialling some new products including the OBD II.
A Look Into the Data
Following the devastating Christchurch earthquake, Christchurch City Council (CCC) was exploring the concept of shared fleets. Working with the Energy Efficiency Conservation Authority (EECA) in New Zealand, CCC asked Meridian Energy if they could review their fleet utilisation data provided by the AVL units installed across Meridian’s fleet.
The Learnings
The data challenged Meridian’s thinking. “The pattern and the profile of our vehicles’ wasn’t what we thought it was, nor was it what our people told us it was”, outlined Nick. Instead of trips over long distances, much of the fleet was doing shorter trips. This variance in fleet use profile opened up possibilities for Meridian to change their fleet profile, which Nick and the team quickly took advantage of.
Driving Towards Electric
Pure Electric Vehicles (EVs) was something that Meridian had committed to rolling into their fleet. They had previously committed to a goal of 30 percent of their fleet being electric by 2019. But they didn’t have a clear indication of how or where they (EVs) would fit within the fleet profile.
Following the learnings of their real fleet use profile, the opportunity to look at the shift to EVs became much more realistic. Nick ensured this opportunity was quickly leveraged. Within 90 days of identification, Meridian started rolling out their plan to shift their passenger fleet to EVs. When talking to Nick in late August 2017 he highlighted how quickly they were moving. “Just last week we reached our goal of 30% and committed to electrifying 50% of passenger fleet by this time next year.”
Considerations of Electric
Nick highlighted that whilst the average fleet profile enabled the shift to EVs, there were still several considerations that needed to be made.
Value for Money
Prior to these data insights, Meridian Energy had already looked into hybrid and Plug-In Hybrid Electric (PHEV) electric vehicles, but upon review found they had poorer fuel economy, comparable emissions and in the case of PHEV’s, considerably higher capital cost than standard internal combustion engine vehicles. “It’s a poor marketing thing to drive around in a ‘green vehicle’ but know the economics and fit for purpose don’t actually stack up” summarised Nick.
Looking at the operating costs of the EVs that have since been rolled out to the fleet, Nick states “we’ve managed to remain cost-neutral on the initial capital cost, and whilst lowering operating costs across those assets and the cost associated with managing all that, the downtime, and the scheduling in and out.”
Availability
With EVs still in the early adopter stage, the options in the market are still quite constrained. Passenger vehicles can largely be replaced, but maintenance and other vehicles don’t have the same breadth of choice for alternatives. Nick is keeping a close eye on the market and the new vehicles being released to ensure when an EV alternative arrives he can look at taking action. “We’re deploying Nissan e-NV200 vans later in 2017 and into 2018 to cover some of the asset maintenance functions of the business, but if something comes to the market that’s four-wheel drive, in the ute space, then we’ll absolutely look at that.”
Routing
Range anxiety and limitation are a real negative for electric vehicles and something that has limited their uptake. For Meridian, the average user profile creates opportunity but still doesn’t overcome the fact that some trips would still be at the limits or beyond of the EV. But upon reviewing a number of the routes to more remote regions, Nick has been able to identify charging spots that not only allow the trip to be achieved with an EV, he’s seeing the need to stop and charge vehicles as a positive for the health and safety of the drivers. “You can stop for 10-15 minutes, the driver can go to the toilet, grab a coffee and take a break.” From a safety perspective, this break is important. “I want them to be taking breaks regularly, that’s part of our health and safety and wellbeing framework.” With an EV this break is forced and tracked. Nick highlights the need for “regular reporting and communications of users in traditional internal combustion vehicles.”
Fitting in with Brand Values
One of the things Nick highlights when talking about the integration of EVs into Meridian’s fleet is the fit for the brand. As the largest 100% renewable energy generator in New Zealand, and an organisation who is committed to finding innovative and effective ways to significantly reduce the country’s emissions, the move to EVs reduces the reliance of vehicles using fossil fuels and minimises the fleet’s carbon emissions. Because of the shift to EVs in the fleet, Meridian Energy reduced their carbon emissions by 2455kg of CO2 in the 2017 calendar year. Nick also highlights from a customer and shareholder perspective that the choice to shift to EVs provides positive outcomes from an operating expenditure as well. “We have a really good story to tell because we can make (EVs) stack up. We’re not charging you on your electricity price just to fund these fancy vehicles, instead, they’re actually reducing the costs”.
Looking towards the future
Meridian is working with Smartrak on the Beta program for developing future features for the OBD II. Looking at the additional datasets that can be pulled from EVs highlights how, from an insights and data perspective, EVs are going to provide huge amounts of additional actionable data.
Information including an EVs current state of charge, if it’s currently plugged in and charging, and if the vehicle which is booked to go on a trip somewhere will have sufficient charge to complete the trip are some of the initial pieces of data that have been highlighted. All of which will be explored further throughout the beta program. The program is ensuring that data isn’t just being pulled from the vehicles, but the data is interacting with other systems within Smartrak like Pool Booking to ensure smooth operation, and actionable feedback should there be an issue. From a management perspective having these insights on your desktop will avoid the need to physically check vehicles, ensuring management is more efficient and proactive.
Nick also highlighted the cost savings that come from being able to self-install the OBD II units, “you can take another $150 of OPEX (operational expenditure) out of the equation for both the outgoing (sold) car and the incoming (newly acquired) vehicle.”
Conclusion
Meridian Energy has already seen benefits across their fleet from introducing telematics. “GPS does one of the big things Smartrak tells me all the time, which is you can reduce your fleet, reduce your capital, or operating cost.” Said Nick, highlighting that “the data has been the enabler”.
The first thing Nick recommends now when talking to other corporations is “put a GPS unit into the vehicles you want to sample, to give you information.” He cautions, “otherwise you’re doing what most corporate do now and just going out and buying three of four (EVs) with no idea of how they fit.”
When reflecting upon the integration of EVs within Meridian’s fleet Nick summarises “they stack up financially and they fit our DNA”.