Ampol dumps retail electricity businesses to focus on EV charging

Australia fuel company Ampol has dumped its retail electricity businesses in Australia and New Zealand to focus on electric vehicle (EV) charging.

The company, which is mainly known for its petrol station business, is selling the Australian Ampol Energy retail business to AGL for a pittance, calling the sum “a nominal amount” in a statement to the ASX.  

Kiwi gentailer Meridian Energy is buying the Z Energy and Flick retail contracts and hedge books for $NZ70 million ($A64 million).

Ampol expects the sales to lift earnings before interest, tax, depreciation and amortisation (EBITDA) by $30 million by the end of the year.

The decision is based on lessons learned over the last four years about where Ampol can compete best in energy markets, the company said in a statement to the ASX this week. 

“By focusing on its EV charging network rollout, Ampol can respond more rapidly to changes in the pace and shape of the mobility energy transition over time, while generating earnings improvements in both Australia and New Zealand,” the statement said. 

The company tried out bundled electricity and home EV charger kits in 2022, after doing a deal with Hyundai.  Now it will just focus on public, business and residential charging. 

Grid locked

Ampol has been struggling to meet its targets for an EV charger rollout and putting the blame squarely on grid connection issues. 

It had promised 300 fast-charging bays by the end of 2024. But in February said it’d only delivered 144 AmpCharge EV live charging bays across 59 sites in Australia by the end of last year.

The company also said connection issues were part of the reason why it only installed just over half of the promised 180 charging bays by the end of 2023.

Ampol received another $100 million in federal government financing via a Clean Energy Finance Corporation loan in August last year to install a further 200 bays in 2025, as well as hydrogen refuelling, in addition to grants from the New South Wales (NSW) state government and the Australian Renewable Energy Agency.

But distribution network operators are riling up about the blame they’re receiving for the slow rollout of EV chargers, tacitly suggesting that it’s time to dial back on big promises about charger installations. 

In an episode of the Energy Insiders podcast, Ausgrid CEO Marc England said it takes time to get a connection the size of a fast charger up and running. 

“A decent size fast charger (site) that Ampol wants to put in, for example, is about the size of about a 14 apartment building in terms of power demand. So it’s not just plugging into a 10 amp socket, like a toaster or a hair dryer. It is a big bit of kit. Just like a new building is a big bit of kit, and it takes time,” he said.

“It’s roughly about 110 business days to get a connection project up and running, and the construction can be up to 240 business days. 

“And so I guess Ampol and others are probably learning that it does take a bit more time, and as a network we’re working really hard to try and slim that down.”