EVs prompt dynamic evolution in energy tariff landscape


Innovative tariff offerings are emerging as the energy industry steers toward a low-carbon future, writes William Goldsmith

As the transition to clean energy and electric vehicles (EVs) accelerates, the energy tariff landscape is undergoing a dynamic evolution—and EV drivers stand to benefit. New pricing models don’t just play a pivotal role in shaping consumer behaviour, but they also reimagine the role that automakers and EV charger OEMs play for their customers. With many regions aiming for net zero carbon emissions by 2050, balancing supply and demand on the grid is pivotal, and EV tariffs play a crucial role in achieving this.

The resurgence of dedicated EV tariffs

In the UK, the recent resurgence of dedicated EV tariffs signifies a crucial turning point. With the number of households switching energy providers more than doubling in the past year, EV drivers find themselves in a unique position to capitalise on this momentum. Dedicated EV tariffs, offering substantially reduced off-peak rates for home charging, present an opportune moment for consumers to explore and secure new energy deals.

As the energy industry steers toward a low-carbon future, many of these innovative tariffs are emerging. Some providers offer multi-rate structures, while others differentiate rates for vehicle charging and household electricity consumption. The shift toward diverse tariff options underscores the industry’s commitment to preparing for a sustainable energy grid.

There are many nuances between traditional single-rate tariffs and emerging EV-specific models. The traditional single-rate tariff maintains a consistent price per kWh of electricity throughout the day. This ensures that the cost of energy remains unchanged regardless of the time of use. This ensures that the cost of energy remains unchanged regardless of the time of use. The latest findings from ev.energy, as of October 2023, indicate an average single rate tariff is costing drivers £0.29 per kWh when including standing charges.

Integrating the ev.energy platform with a time of use or type of use tariff could save drivers hundreds of pounds a year compared to traditional single rate tariffs

While ‘time of use’ tariffs have been a part of the energy landscape since the late 1970s, the advent of EVs has breathed new life into the traditional Economy 7 tariff. These modern EV tariffs feature a dual pricing structure. The peak price, slightly higher than a single-rate tariff, is applicable during the day, while the significantly lower off-peak rate becomes active late in the evening and extends overnight. According to ev.energy’s recent research, the average peak price stands at £0.33 per kWh, with an off-peak price of around £0.09 per kWh. This setup provides a compelling opportunity for substantial savings when coupled with intelligent charging practices.

And new ‘type of use’ EV tariffs are now emerging. These maintain a single rate for household energy, while rewarding drivers with credits for smart charging. This add-on effectively discounts the EV component of the bill without consumers paying a higher rate when boiling the kettle or putting a wash on during the day.

When making the most out of both types of EV tariffs, drivers can charge for as little as £0.07 per kWh—that’s £0.03 per mile.

Empowering EV drivers

To unlock maximum savings within this evolving landscape, EV drivers must harness the power of intelligent charging solutions. Platforms equipped with smart charging capabilities not only optimise charging schedules based on tariff structures for cost-effective charging but also enable users to earn cash rewards for supporting the grid and utilise the greenest energy available.

Redirecting EV charging to off-peak periods also allows consumers to soak up more renewable energy. This shift away from peak demand reduces reliance on fossil fuels, potentially saving the average driver 37kg of carbon emissions per year.

By connecting cars to a virtual power plant, drivers contribute to balancing the grid and aligning energy consumption with real-time renewable generation, which ultimately reduces the costs of operating the electricity system and can be passed down to drivers. For example, ev.energy pays its community of over 20,000 UK EV drivers to support the grid. This enables all EV drivers to benefit from smart charging, including those with high electricity usage during the day who may prefer a single-rate tariff.

GM Qmerit home charging
Intelligent charging solutions will be pivotal to successful grid management

Through smart charging capabilities and automated optimisation of charging schedules based on tariff structures, the right platform can eliminate the complexities that OEMs might encounter when navigating the intricacies of energy system integration. This not only ensures a smoother integration process but also empowers OEMs to deliver enhanced value to their customers.

A pivotal role

As EV adoption continues to surge, those in the EV industry must recognise the pivotal role next-gen tariffs play. Players not actively guiding customers to connect with and benefit from a flexible energy market risk being left behind in this transformative journey.

The EV tariffs of the future are here now, and the EV industry must empower drivers with convenient ways to partake in energy flexibility with a tariff that suits them.

About the author: William Goldsmith is Global Head of Grid Services at ev.energy



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