Fixed Dual Electricity Tariffs The UK Government's biggest miss on the road to EV?

The UK Government has laid out clear goals on the road to an EV future, with a legislated requirement for all new cars to be EVs by 2030. It has also provided incredibly generous Tax incentives to motivate the creation of “Green Fleets” of EVs driven as a pure “employment perk”, without any need to drive a single company mile, via employee Salary Sacrifice Schemes

 However, the current energy crisis offered up a crucial opportunity to drive the conversion to EVs, which the Government seems to have completely missed.

 The illegal invasion of Ukraine by Russia and subsequent sanctions versus gas supply wars has seen the price of fossil fuels and natural gas escalate rapidly. The Government rightly decided to shield the economy and household bills from the full impact of this price shock via massive subsidies and the introduction of maximum electricity and gas tariffs.

 I am amazed that during discussions about this that it did not occur to the Government to introduce a maximum day and night rate tariff, creating dual electricity tariffs incentivising EV drivers to charge their cars at night.

 The production of electricity is not something that can be easily scaled up and down to meet demand, with capacity being based primarily on peak demand between 4-10 pm. It is vital that this peak is not increased as the number of EVs explodes over the next 7 years as we approach 2030, with EV owners knowing that they should only charge their EVs outside of peak hours, primarily overnight between 10 pm and 6 am when demand is lowest.

 The easiest way to do this is to offer dual night/day tariffs with night-time charging being 50% cheaper than daytime.

 The Government clearly understands this longer-term requirement, as they have already legislated that all home chargers from 30th June 2022 need to be controllable to allow time-of-day charging to avoid peaks. Therefore, how have they missed this clear and obvious opportunity to drive EV adoption with virtual no real cost as all they would be doing is balancing electricity supply and demand?

 Unfortunately, the simple flat tariff has created the opposite effect that is desired!

 Tariffs caps have removed virtually all price competition from the electricity marketplace since if homeowners move suppliers they become exposed to much higher uncapped variable rates. Electricity suppliers have currently stopped competing for new customers and virtually all dual tariffs aimed at EV drivers have been withdrawn from the market. This removes any incentive to charge cars overnight and will lead to millions getting into the bad habit of just plugging in and charging when they get home, which is the worst possible time from the National Grids' point of view.

 Octopus Energy continues to offer an “Intelligent” rate for EV drivers, but you would be unintelligent to pay £41.63 per kWh between 5.30 am-23.40pm, which is a massive 25% premium over the standard fixed rate, just to enjoy an EV charging night-time rate of 10p. The maths simply doesn’t stack up and dual rates need to be a lot more attractive than this con.

 EVs are the biggest batteries we have ever plugged into our houses and with 34.5m EVs expected by 2050, incorporating them into the Governments plans for balancing the National Grip is essential. Creating good habits needs to start now!

 There is also the opportunity provided by Vehicle to Grid EV technology. This is where the charge within the EVs plugged in at home, could be used to power the house in peak times between 6 pm-10 pm and then recharged overnight ready to be driven in the morning. Again, the Government needs to encourage UK drivers to buy vehicles incorporating this technology and to do so should keep the BIK tax at 0 or 2% for these vehicles from 2025 when they start increasing the charge by 1% per year on standard EVs.

 We are blessed with a forward-thinking Government focused on reducing Co2 emissions, but I wish they would think a bit harder about how to get there with EV smart charging policies because currently, they are anything but smart.

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