Electric Car Rip-Off

There's bad news on the horizon for electric car drivers as Government regulator Ofgem reveals plans to combat strain on the UK’s electricity network.

With 160,000 electric cars (EV) on UK roads and a spike in the numbers sold over the past few years according to figures published by the Society of Motor Manufacturers and Traders (SMMT), electric car drivers face paying more to keep their cars running than initially realised.

Much to the displeasure of most petrol and diesel drivers, electric cars are exempt from road tax if not opting for a high-end model that the list price exceeds £40,000. While the running costs are generally much lower as car parks up and down the country offer free charging for electric cars; it seems that some things may become more expensive.

Speaking to The Guardian and commenting on the failure of electric cars altering their charging to off-peak hours.

“Consumers should be rewarded for being flexible with their demand but may pay a premium if their behaviour adds to peak demand or local congestion [on power networks]” - Ofgem

Under pressure

The UK’s power network is already under pressure during its peak in demand which is between 4 pm and 6 pm, and the cause of further stress would be a surge in the number of electric cars being simultaneously charged.

Ofgem’s suggested solution involves smart charging during off-peak hours for electricity demand. The idea of creating so-called ‘smart charging’ means that a car plugged in at 5 pm may only start charging at midnight, or when the demand has reduced enough. The chargers would be able to react to demand and only charge when the rest of the demand was low enough. Already it is known that charging an electric car at public charging points is much costlier than at home. According to What Car?’s article published earlier this year, the cost of charging your car at home, at 3kWh, during the night is 7p per kWh while the cost for charging in the day is exactly double. Compared to the cost of Charge Your Car at the speed of 7kWh at 20p per kWh and Shell Recharge (43-50kWh) at 49p, charging at home seems to be the only long-term solution, but as not everyone has parking spots, this is not possible.

According to research conducted by Good Energy in 2017, 80% of electric car drivers charge their cars at home or work. With the increase in popularity of electrics comes the issue of finding a public charging point, particularly at a shopping centre. IKEA refunds the cost of electricity at its electric charging points if you spend in store. Meanwhile, rapid chargers at public charging points cost more than standard electricity charging points due to pumping more electricity into your car’s battery in a shorter timescale making them more cost-effective.

In a recent consultation document released by Ofgem, they emphasised the need to push users to use the power network at times or places where there is sufficient supply and capacity, and in doing so, reduce the requirement for new investment and keep bills as low as possible for the average consumer.

As we wrote about in May 2018, the UK is simply not ready for electric vehicles on a mass scale, with the required infrastructure being required to charge millions of electric cars at the same time. National Grid anticipates that there will be 11m electric vehicles within the next 12 years. As it currently stands, there won’t be, sufficient charging points, with energy analysts predicting that electric cars will account for around 3% of the total energy demand and the requirement for an additional 400,000 charging points which would come at the cost of £30bn to the taxpayer.

A new strategy

This comes as a direct result of the ‘Road to Zero’ Government strategy. Differential pricing is set to be the norm with electric, especially at forecourts, and even more so at ones in high demand locations, such as motorway service areas.

“Ofgem is working with the government to support the electric vehicle revolution in Britain, which can bring big benefits to consumers. Our reforms will help more users charge their electric vehicles and save them money.” - Jonathan Brearley, executive director of systems and networks at Ofgem

Government support

A Government grant for electric cars provided by the Office for Low Emission Vehicles (OLEV) provides £500 off the cost of purchasing and installing a home charging point – most electric and plug-in hybrid cars are eligible for this scheme. Owners can claim one charging point per eligible vehicle and up to two charging points per household.

However, a new law under the Automated and Electric Vehicles Act 2018, that was passed last week, it will be mandatory for anyone installing an electric charge point to have a smart charging capability, where a car plugged in at 5 pm would only start charging at midnight.

However, the issue with smart charging is if there were a power cut overnight and your car didn’t start charging in time, having a flat battery and an emergency could be an absolute nightmare for everyone involved.

Electric car drivers should be concerned with this proposed differential pricing strategy, particularly when it comes to considering the prices on motorways. There needs to be a solution to the problem otherwise, with the rise in sales of electric cars, the UK’s power network will feel the full effect of the EV revolution. Petrol prices are already sky high for petrol and diesel cars at motorway service areas. This follows a £2m Government trial, which finished earlier this year, with the installation of roadside motorway signs. The move by government ministers was intended to advise drivers about the cost of fuel at the next three service stations and steer motorway services in the right direction in making prices more competitive. However, this was not the outcome, and the results did nothing for prices. Introducing differential pricing comes at a time when the Government are trying to drive more people to take up electric cars, but meanwhile allowing charging stations to increase prices. At motorway service areas, the demand for fuel is inelastic due to motorists needing to fill up and being held captive, thus meaning the that the price of filling up or charging, as the case may be, increases drastically beyond all averages and can be up to 10p more a litre. If this was introduced for electric cars, then who knows how much the cost per kWh would become.

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