How decoupling cost of electricity from gas can benefit EV uptake, according to motoring groups
Motoring groups have called on the government to decouple the wholesale price of electricity from gas in a bid to bring down the costs associated with running an electric vehicle (EV).
The RAC and EV campaign group Faircharge today urged ministers to publish the results of their Review of Electricity Market Arrangements, which closed in October.
Launched in July, the consultation looked at ways to reform the UK’s electricity market as the government increases its reliance on cheaper and cleaner energy sources.
By decoupling gas produced from fossil fuels from the electricity made by renewables, customers should end up paying less to use electricity.
Campaigners this will help bring down the costs of charging an EV, enticing more and more people to make the change to electric cars.
“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,” commented Faircharge’s founder and former Top Gear presenter Quentin Willson.
According to the RAC, the average of fast charging an electric car has gone up by 50 per cent between July and January, to 70p per kilowatt hour (KWh) for rapid and 75p/KWh for ultra-rapid chargers.
“Decoupling the wholesale price of gas from electricity from cheaper renewable sources would help everyone by lowering electricity prices,” Willson added.
“Decoupling should become an essential and urgent part of the UK’s future energy strategy.”
Willson’s words were echoed by the RAC’s EV spokesperson, Simon Williams, who urged the government to “improve the way the wholesale electricity price is worked out.”
A spokesperson for the Department for Energy Security and Net Zero told City PM the review will “radically cut costs of electricity for consumers in the long term.”
“We are consulting on a number of reform options, including making changes to the wholesale electricity market that would stop volatile gas prices setting the price of electricity produced by much cheaper renewables,” they said.
The call for action comes as car makers told the government to cut VAT on public EV chargers and review the introduction of vehicle excise duty (VED) for electric cars.
This, the Society of Motor Manufacturers and Traders (SMMT), will help support the green transition.