The government should hold Contracts for Difference (CfD) style auctions to spur a five-fold increase in the growth of electric vehicle (EV) charging infrastructure network this decade, a right of centre thinktank has urged.
In a new report, entitled Charging Up, the Policy Exchange has estimated that 35,000 new chargepoints will be required per annum – compared to the 7,000 being rolled out currently – in order to help meet the prime minister’s recent announcement of a 2030 ban on new petrol and diesel cars. This includes around 6,000 high-powered 100kw plus chargepoints
At between £5 billion and £10 billion, the cost of these new chargepoints dwarfs the £1.3 billion earmarked by the government through its Rapid Charging Fund, meaning that private funds must be tapped to make up the shortfall.
Unless this happens, the report warns that some parts of the UK will be “EV charging blackspots” with insufficient charge points.
The Policy Exchange urges the government to ensure a comprehensive network of chargepoints by procuring chargepoints through competitive tenders, like the CfD auctions that have underpinned the growth of the UK’s offshore wind industry, focused on underserved areas.
In these blackspots, it recommends offering 10 to 15-year contracts to build, own and operate chargepoints, including a minimum annual revenue guarantee.
At motorway service areas and other key locations, it says the government should tender for expensive connections to the strategic grid and or 100kw plus high powered chargepoints.
The report says the existing system of grants is ‘unlikely’ to deliver the required increase in installations.
The report suggests that the Low Carbon Contracts Company would be the counterparty for these contracts.
The operator of the new grid connection would then lease connection capacity to chargepoint operators and other users, potentially including operators of hydrogen electrolysers.
Competition could also help to determine whether the cost of installing chargepoints is cost-effective or whether a larger “strategic grid connection” offers better value for money, the report says.
Over time, the report says its recommended approach would enable the government to withdraw from support for chargepoints.
The report also calls for government to fund dedicated “chargepoint teams” in local authorities to help the rollout of chargepoints in residential areas.
And it recommends capping prices in return for government support.
Ed Birkett, senior research fellow at Policy Exchange and lead author of the paper, said: “The government should focus on areas where the government isn’t delivering enough public chargepoints, including the north west of England, Yorkshire, and Northern Ireland.
“In return for government support, chargepoint operators should be required to provide reliable chargepoints, that are easy to use and offer fair prices to drivers.
“If the government gets this right, then EVs can be a practical choice for drivers right across the UK. We’re concerned about patchy deployment of chargepoints, which runs against the government’s plans for levelling up and a strong and connected union.”