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Three regulatory developments benefiting electric vehicles

As the UK’s prime minister announces a 'year of climate action' as part of COP26 preparations, we look at three EV policy developments that will benefit business and the public sector.

On 4 February the Prime Minister Boris Johnson launched the United Nations’ Conference of Parties 26 (COP 26), to be held in Glasgow at the end of 2020, by championing a Year of Climate Action’ for the UK. The below article summarises three of the key policy developments on electric vehicles (EV) that have been announced as part of the Government's drive to net zero.

Banning petrol and diesel car sales five year earlier

In his speech launching COP26, the PM announced that the Government is consulting on bringing forward the end date for new petrol and diesel cars and vans sales to 2035, five years earlier than previously targeted. The PM went further by stating that the UK government will consider whether a faster transition is feasible and proposed the possibility of including hybrid vehicles in the ban.

This announcement is welcome and the hope is that this will demonstrate real progress towards how the UK will meet its new ‘net zero’ target alongside the Transport Decarbonisation Plan, that is expected later this year. Centrica has been calling for the ban on new petrol and diesel vehicles to be brought forward to 2035 as we believe that quicker action is required to meet national targets.

Ofgem's decarbonisation plan and EV commitments

To coincide with the appointment of a new CEO at Ofgem, the energy regulator has published its decarbonisation plan. This plan brings together different workstreams from Ofgem that have started in recent months, with the regulator stating that our energy system will need greater flexibility and that business and public sector participants should be rewarded for contributing flexibility to the system. These developments are fully in line with our commitment to supporting our customers in becoming more sustainable businesses as they transition to a distributed energy future.

A specific action from Ofgem focuses on ‘enabling electric vehicles at low cost’, whereby it will continue working with Government to support the rapid take-up of electric vehicles (EV). Ofgem also committed to identify and tackle regulatory barriers and remove obstacles to new business models, including new products and services such as EV users selling flexibility services to the grid. This recognition of the critical role flexibility from EVs can play in the decarbonisation plans is a key developing component of our EV Enablement solution. Centrica continues to promote the need for Ofgem to ensure that flexible resources can access markets -and be appropriately remunerated - at a national and local level by 2023 at the latest.

21 recommendations from the EV Energy Taskforce

The EV Energy Taskforce published its final report in January with 21 recommendations for government, regulators and companies - aiming to ensure the British energy system is ready for the mass take-up of electric vehicles. Centrica welcomes this report as it provides focus on ensuring there are no barriers to development of the Electric Vehicle market. Amongst other recommendations, the report tasks Ofgem and the Government with ensuring markets are open and fit for purpose, emphasising the need for Distribution Network Operators (DNOs) to provide network data and monitoring to help unlock opportunities and value for electric vehicles.

Read our EV whitepaper to find out how electrified transport can help your organisation.

Solar, EV and the smart grid of the future

In addition to the above three announcements, Centrica continues to advocate for improved grid flexibility from renewables, such as solar, and EV. Following the closure of the Feed in Tariff in April 2019, the Government has developed the ‘Smart Export Guarantee’ which ensures there is value available for renewable generation that exports to the grid. This scheme only went live in January 2020 so is still nascent, but we expect this to develop and ensure that these exports are appropriately valued for the benefit that they are providing to the grid at the time.

Charging infrastructure has a role to play here and a benefit for businesses and public sector organisations that implement it. As well, it is obviously a key concern to those considering switching to an EV. Integrating charging into the wider system will benefit of the energy system and the grid. Centrica strongly supports making this charging infrastructure as smart and connected as possible. As we transition to a renewables future, it’s important that all EV charging infrastructure can communicate with the wider energy system - as how we manage the peaks and troughs of electricity supply will become increasingly important.

With effective integration, solar and EV can play their part. This will minimise the additional capacity needed to deliver decarbonisation and therefore reducing the cost to consumers.