Ofgem has set out its priorities for maximising the benefits to consumers, the environment and the wider energy system from the rollout of electric vehicles (EVs).
Launching its new report at the Fully Charged Live event today (4 September), Ofgem’s director of strategy and decarbonisation Neil Kenward, will say: “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 offers 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.”
Its priorities include:
- Ensuring there is sufficient network capacity to the support the rollout of EVs – Ofgem said billions of pounds of investment is expected to take place over the RIIO2 price controls, whilst half of its £300 million green recovery scheme has been allocated to EV infrastructure. Distribution network operators are being required to forecast and monitor uptake as part of their investment planning and uncertainty mechanisms are being introduced to adjust their funding during course of their price controls.
- Making it easier to connect to the power grid – As part of its significant code review of forward-looking network charges and grid access arrangements, Ofgem said it will reduce connection costs for large energy users in cases where network reinforcements are required, with a final decision being issued by the end of 2021 and changes being implemented from 2023. The regulator said it will also incentive DNOs to reduce connections times for customers seeking smaller connections as well as require them to share best practice on EV charging connections and report on their customer service by 2023.
- Supporting the development and uptake of smart and vehicle-to-grid charging – Ofgem said it will improve price signals for smart charging by reforming network charges, implement market-wide half-hourly settlement and require suppliers to be able to offer time-of-use tariffs by 2025. The regulator has worked with the government on smart charging legislation that will be laid before parliament later this year. They will also publish a joint flexibility policy statement in 2022 that will cover chargepoint interoperability, consumer engagement and bi-directional data flow between chargepoints and operators, aggregators and networks.
- Protecting consumers – Ofgem said it will publish a retail strategy that considers how to protect consumers and encourage their participation. It will work with the government to identify gaps in the current protections and potential solutions. They will also work together to ensure fair pricing and examine the role of third-party intermediaries.
Chief executive Jonathan Brearley said: “Ofgem will make sure that energy sector regulation supports the rapid transition to EVs and does so at least cost to consumers. We are already accelerating investment in the energy networks to ensure they are prepared for the increased demand for electricity, and recently set out our proposals to reduce the costs of installing new chargepoints
“We intend to go further, building a smart and flexible energy system that can utilise the huge number of EV batteries that are going to be plugged into our system to keep costs down for everyone. Consumers must be at the heart of this transition.”