Punish electric car owners who charge at peak times, Miliband urged

Telegraph

4 days ago

Electric car owners should pay higher electricity bills for charging their cars at peak times, the Resolution Foundation has said.
The think tank said electric vehicle (EVs) owners should be charged more for plugging in their cars in the evenings to encourage them to charge overnight instead.
Delivering electricity to households and businesses at peak times, especially between 4.30pm and 8pm, is around twice as expensive as at other times of the day.
Despite this, electricity costs the same regardless of when it is used, with the extra cost of delivery spread across the day.
The Resolution Foundation warned that the mass adoption of EVs could make this system untenable as a surge in people topping up their cars when they get home from work would lead to a huge spike in delivery costs that would make bills far higher for everyone.
'As EV adoption grows, owners who don't shift their significant energy usage will push up peak demand, imposing greater costs on the system and inflating bills for everyone else,' the think tank said.
It is calling for the Government to axe the energy price cap for EV owners who use too much electricity and instead introduce variable prices. This would in effect mean they would pay higher prices for charging in the evening, encouraging drivers to charge their vehicles late at night instead.
'To ensure households with EVs and other technologies that can use electricity in off-peak times do so, the Government should give a strong nudge to consumers by setting a usage limit above which Ofgem's current fixed-tariff price cap would not apply and shifting these households on to variable tariffs instead,' the Foundation said.
Zachary Leather, author of the report, said: 'We're transitioning to a different kind of energy system, one where we need demand to respond a bit more to the supply [of energy].
'Wind and solar and other kinds of renewables are variable, rather than being able to be turned off and turned on at will, so that means that we need more flexibility in the system.'
He said EV owners who charged only during off-peak hours would not only lower average bills for the country as a whole but also save money themselves. The typical EV owner would be able to save £120 annually by charging overnight, the Foundation estimated.
'All of these people with lots of really high energy use are the kinds of households that are likely to be able to contribute to cheaper bills by flexing that energy use,' Mr Leather said.
Zonal pricing
The call for EV drivers to be punished for charging their cars at peak times through higher bills is part of a wider review of potential changes to the electricity market, including shifting to so-called 'zonal' pricing.
This would see Britain's energy market broken up into different regions, with electricity prices in each areas based on local supply and demand.
Zonal pricing already exists in several countries, including Australia, Italy and Sweden. Adopting it in Britain, however, could prove controversial as it poses higher bills for households and business in the South of England, where demand is greatest.
Ed Miliband, the Energy Secretary, is considering whether to adopt a zonal system as part of the Review of Electricity Market Arrangements. An announcement is expected shortly.
The Resolution Foundation said an energy system which varied prices by region and time of the day would offer households savings of £200 a year, on average.
However, families who cannot avoid using higher amounts of energy in the evening risk being punished by the reforms, the think tank warned.
Mr Leather said: 'The Government should encourage households with flexible but high-energy use technologies like Electric Vehicles to shift their electricity usage out of the peak-time early evening period, so as to reduce both theirs and others' energy bills.
'But it must also act to avoid the reforms penalising low-income households with unavoidable and inflexible electricity needs.'
A spokesman for the Department for Energy Security and Net Zero said: 'We are working closely with industry to build a more flexible energy system, as part of our mission to deliver clean power by 2030.
'Off-peak tariffs already offer savings of around 75pc for electric vehicle owners when they charge overnight, in a strong incentive to make the most of cheap off-peak power.'