Harry Leahey

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Electric vehicle (EV) campaign group, FairCharge, and the Royal Automobile Club (RAC) have joined forces to call on the UK government to support the transition to EVs by breaking the link between the wholesale price of electricity and gas.


The high wholesale electricity price, which is currently set by the global wholesale price of gas, has not only raised domestic and commercial electricity bills to record levels, but also made it more expensive to charge EVs. The two firms believe this in turn, may have deterred people from choosing EVs over traditional petrol cars.


As a result, FairCharge and the RAC are calling on the government to publish the results of the Review of Electricity Market Arrangements, which ended last October, to begin the decoupling process. The review found that gas prices often dictate the wholesale electricity price, because gas-fired power stations are the last source of energy used to meet demand.


However, according to the two firms, by breaking the link between electricity and gas prices, the wholesale price of electricity will eventually be determined by the increasing share of electricity generated from cheaper renewable sources. This is said to reduce energy costs for businesses, consumers and EV drivers, and encourage more people to switch to EVs.


Data from RAC Charge Watch reveals that the average cost of using the fastest chargers increased by 50 percent between May 2022 and January 2023, with rapid chargers costing 70p per kilowatt hour and ultra-rapid chargers costing 75p per kilowatt hour.


By decoupling the wholesale price of electricity from gas to lower charging cost, FairCharge and the RAC believe that the move will also support the government's efforts to reduce greenhouse gas emissions from transportation.


RAC EV spokesperson Simon Williams said: “It’s very important that enthusiasm for electric vehicles isn’t dampened in the run-up to 2030 when the sale of new petrol and diesel cars comes to an end. 


“The fact electricity has gone up in price quite dramatically due in the most part to the wholesale price of gas shooting up as a result of the war in Ukraine is a sign that action needs to be taken to change this for the benefit of households and businesses, and to guarantee the electric car revolution stays on track.


“We urge the Government to publish its consultation findings as soon as possible, to act on the findings and improve the way the wholesale electricity price is worked out.”


Also backing the move is Greg Jackson, founder and CEO of Octopus Energy Group, which lists EV charge point destinations from a variety of providers. 


He said: “Renewables are the lowest cost form of energy generation, and electricity is the most efficient way to power transport and heating. We need prices to reflect this, and Octopus would like to see markets reformed to let customers see the benefits of cheap, green electricity.”


FairCharge is also campaigning to get the 20 percent VAT charged at public charge points reduced to match the 5 percent levied on domestic electricity. 


FairCharge and the RAC believe this is an unnecessary barrier to switching to an electric car for the estimated third of people who aren’t able to charge an EV at home as they would have no choice but to rely on the public charging network.

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Harry Leahey 10/02/23