May 27, 2024

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Electric car rollout will ‘push down energy prices for all households’

The rollout of electric cars will push down energy prices for households across the country, the energy watchdog has vowed.

Announcing plans for a £150 million upgrade of the car charging network, Ofgem said mass take-up would lead to lower bills even for those who did not own an electric vehicle.

“The increasing uptake of EVs will require, and result in, the development of new products and services aimed at EV users, beyond those available today,” it said in its report. 

“This may change the way many EV users engage with their energy use and their electricity supplier.

“Ofgem believe that the growing number of EVs on the system could reduce energy bills for all consumers over time, even non EV owners, particularly if a high share of EVs smart charge.”

‘Smart charging’

Ofgem said that “smart charging” – which allows cars to be charged at times of low electricity demand – needed to be more widely rolled out, along with car batteries that can sell electricity back into the system at times of high usage.

Chargers that are able to do this are expensive and need to become cheaper if they are to become mainstream. Costs have already dropped from £10,000 a few years ago to £3,000 to £4,000 today.

Together these two technologies “could reduce peak demand equivalent to the generation capacity of up to 10 large nuclear power stations”, Ofgem said.

It added that energy companies would also need to introduce new tariffs to compete for customers with electric vehicles.

‘Three-prong approach’

Neil Kenward, Ofgem director of strategy and decarbonisation, said: “Electric vehicles will revolutionise the way we use energy and provide consumers with new opportunities, through smart products, to engage in the energy market to keep their costs as low as possible.

“Our electric vehicle priorities not only provide a way to meet our climate change targets but importantly offer ways to protect consumers from rising bills, through a three-prong approach of increased use of electric vehicles, smart charging and vehicle-to-grid technology which together can help drive down costs for all GB bill payers.”

A government-backed study published in June found that electric car drivers could earn over £700 a year selling extra power from their car battery back to the grid.

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