EV campaign group FairCharge and the RAC – a founding supporter –
are today calling on the Government to underline its support for
the switch to electric vehicles (EVs) by decoupling the wholesale
price of electricity from gas, something which would immediately
reduce the cost of charging EVs.
The current high wholesale electricity price continues to be set
by the unprecedented global wholesale price of gas, which has not
only financially harmed every household and business in the UK by
pushing up domestic and commercial electricity bills to record
levels, but has also potentially impacted the public’s enthusiasm
to opt for electric cars due to much higher charging costs.
FairCharge and the RAC are calling on the Government’s to
urgently publish the results of its Review of Electricity
Market Arrangements – which closed for consultation last
October – so the decoupling process can begin. The review states
that under the current system, gas prices often end up setting
the wholesale electricity price because gas-fired power stations
are the last source of supply used to meet demand.
However, if decoupling were to happen the growing share of
electricity generated from cheaper renewable sources will over
time determine the price more often – bringing down energy costs
for businesses, consumers and EV drivers as well as encouraging
more people to switch to EVs.
Dr Euan McTurk, advisor to FairCharge and consultant battery
electrochemist from Plug Life Consulting Ltd, said: “Bizarrely,
it’s currently the case that the most expensive form of
electricity generation – gas-fired power plants – determines
wholesale electricity prices even though it’s other cheaper
sources of power, such as renewables, that make up most of where
our electricity actually comes from over the course of the year.
“It would make far more sense for wholesale electricity prices –
which ultimately dictate what consumers and businesses pay – to
reflect where most of the energy is being generated on any
particular day. Gas power plants would still be paid what they
need to keep operating, but wholesale electricity prices would
plummet instantly by several tens of pence per kWh, cutting home
and commercial energy bills – as well as public EV charging
costs. This could all be done very easily at no expense to
taxpayers.”
FairCharge founder, automotive journalist and long-time EV
driver, Quentin Willson said: “EVs charged at home are still
considerably cheaper to run than combustion cars, but prices at
many public charge points have increased significantly. Anyone
using the public network will now have to pay more, but
critically, the rise in costs will reduce EV take-up at a crucial
time. Decoupling the wholesale price of gas from electricity from
cheaper renewable sources would help everyone by lowering
electricity prices. Those lower energy costs will also impact
inflation and interest rates. Decoupling should become an
essential and urgent part of the UK’s future energy strategy.”
RAC Charge
Watch data shows the average cost of using the very
fastest chargers increased by 50% between May 2022 and last
month, to 70p (per kilowatt hour) for rapid and 75p for
ultra-rapid.
RAC EV spokesperson Simon Williams said: “It’s very important
that enthusiasm for electric vehicles isn’t dampened in the
run-up to 2030 when the sale of new petrol and diesel cars comes
to an end. The fact electricity has gone up in price quite
dramatically due in the most part to the wholesale price of gas
shooting up as a result of the war in Ukraine is a sign that
action needs to be taken to change this for the benefit of
households and businesses, and to guarantee the electric car
revolution stays on track.
“We urge the Government to publish its consultation findings as
soon as possible, to act on the findings and improve the way the
wholesale electricity price is worked out.”
Greg Jackson, founder and CEO at Octopus Energy Group, said:
“Renewables are the lowest cost form of energy generation, and
electricity is the most efficient way to power transport and
heating. We need prices to reflect this, and Octopus would like
to see markets reformed to let customers see the benefits of
cheap, green electricity.”
FairCharge is also campaigning to get the 20% VAT charged at
public charge points reduced to match the 5% levied on domestic
electricity. FairCharge and the RAC believe this is an
unnecessary barrier to switching to an electric car for the
estimated third of people who aren’t able to charge an EV at
home* as they would have no choice but to rely on the public
charging network.
More information about FairCharge can be found at www.faircharge.co.uk.
Ends
Notes to Editors
* RAC Report on Motoring research 2022 shows 33% of drivers would
not be able to charge at home/have a charge point installed
