UK energy regulator sets out reforms designed to boost EV uptake and save bill payers money amid 'radical transformation' of the energy grid
Energy regulator Ofgem is seeking system reforms aimed at supporting the widespread adoption of electric vehicles (EVs) and accommodating more renewables and battery storage capacity amid the "radical transformation" of the UK's power grid, it announced today.
With more intermittent forms of clean energy coming online in addition alongside increasing electrification of transport, Ofgem said more flexible use of the energy system was needed to allow growing numbers of EVs to be charged from the existing grid at the same time as reducing the need to build expensive new power stations and extra grid capacity.
It has launched a consultation today proposing a Significant Code Review to conclude in 2020 with a view to initiating "wide-ranging and holistic change" to the system from 2022.
Possible reforms could see households and smaller businesses wanting to consume a lot more power at peak times having to pay the associated additional network charges. In addition, larger energy users willing to accept less 'firm', constant energy access and instead boost their grid flexibility could in return benefit from quicker connection and lower network charges, according to Ofgem.
Ofgem said policy reforms could also incentivise EV drivers to charge up at the most optimal times of the day, keeping costs down for EV owners and energy bill payers while easing pressure on the grid.
It warns that grid operators needed to prepare for a "pace of uptake that is greater than today's thinking suggests is possible", noting that some EVs on the market are already cheaper than their conventional alternatives on a total cost of ownership.
National Grid has said the UK will be able to cope with a large influx of EV drivers in the coming years charging up from the power grid, provided the bulk of EVs are charged up off-peak and V2G technology becomes more widespread.
Ofgem's proposed reforms follow an open letter last week from the UK's green energy sector calling on the government and Ofgem to better incentivise flexibility services on the power grid in order to "have any change of a renewable future". A recent study also suggested businesses could cut their energy bills by up to 10 per cent by embracing demand response and other flexibility services.
Alongside the consultation over the proposed reforms launched today, Ofgem said in a new analysis paper more flexible charging of EVs outside peaks times of demand on the power grid could allow at least 60 per cent more electric cars to be charged up, in comparison to 'inflexible' charging where they are only charged at peak times.
Flexible charging allows EVs to be charged when energy prices are cheapest, such as when wind and solar power are generating larger amounts of electricity, or when there is less demand on the system. It can also helped to keep consumer costs down by storing energy on EV batteries to be sent back to the grid when it is needed through vehicle-to-grid (V2G) technology.
Energy suppliers such as Octopus Energy have already begun offering 'plunge pricing' tariffs which promise to pay their customers to use power when demand is low or supply is high
But wholesale system reforms are now also being sought to give incentives for customers to charge their EVs at the cheapest time of day, as well as freeing up existing grid capacity to allow new generators or businesses generating their own power on site to connect to the grid more quickly, the Ofgem said.
Jonathan Brearley, executive director for systems and networks at Ofgem, said the reforms would make the power systems more efficient by giving generators and other users more choice and flexibility on how they connect to the grid.
"Our reforms will help more users charge their electric vehicles and save them money," said Brearley. "The way we generate, transport and use electricity - and power our cars - is undergoing a radical transformation in Great Britain. Ofgem will ensure that the energy system is fit for this exciting, cleaner future and at the lowest cost for consumers."
David Smith, chief executive of the Energy Networks Association, welcomed Ofgem's announcement, which he said was "fundamental to making sure the regulatory framework is up to date". "Electric vehicles are a key component of the transition to a smarter, cleaner energy system - both in terms of their impact on our energy networks and the opportunities they create for managing the grid in a smarter way that is cheaper for bill payers."
It comes amid moves from the government to boost the number of EVs on UK roads, adding further impetus to build-in greater grid flexibility. HM Treasury today opened bidding for a company contractor to oversee its £400m fund to encourage electric vehicle uptake through building cheaper charging infrastructure.
The Charging Infrastructure Investment Fund is aimed at supporting businesses to build EV charge points and boost jobs across the country.
The Exchequer Secretary to the Treasury, Robert Jenrick, said while uptake was increasing the government wanted everyone to have the opportunity to own an EV. "But crucial to encouraging the take-up of these cars across the country is increasing people's access to charging points," he said. "We want to scale up at pace and ensure interoperability for ease of use. This fund is a vital step in our mission to change the way we travel, create new jobs and protect our environment for future generations."
Calls have come for some time now for energy network changes to reflect the pace of technological change and consumer demand for more flexible energy services. It remains to be seen in details what policy changes may emerge from 2022 onwards as part of the proposed Ofgem review, but by that time it seems likely EVs coupled with flexible energy tariffs will already be accelerating towards normalcy.
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