Ofgem has outlined how it will take a balanced approach to enabling electric vehicles (EVs), including establishing price incentives and enabling market solutions to encourage smart charging.
In a list of key priorities issued by the regulator on Saturday (4 September), the regulator explained how these will be supported as needed by regulatory measures – such as the government’s plans to mandate that all new private EV chargepoints are capable of smart charging.
The first of these priorities is to ensure the network is prepared for EV adoption, with Ofgem to make sure network investment is made in the right areas and at the right time whilst minimising costs of new network infrastructure.
As part of RIIO-ED2, Ofgem will ensure that network companies are making informed projections of local uptake and putting in place plans to meet the arising needs, using flexible solutions where they are more cost effective than new network capacity.
RIIO-ED2 will also be used to incentivise improvements to the connection process alongside proposed changes to connections as part of the Access and Forward-Looking Charging Significant Code Review.
These changes will reduce barriers to network connection by reducing EV connection charges associated with reinforcement of shared network assets, Ofgem said.
It pointed to how investment is already taking place, with £300 million approved in May 2021, half of which will be used to develop EV infrastructure, including rapid chargepoints.
Smart charging and vehicle-to-X (V2X) technology is also firmly on the regulator’s agenda, with market incentives such as Market-Wide Half-Hourly Settlement (MHHS) and Time of Use tariffs two ways it plans to facilitate the technologies.
Ofgem launched a consultation into the implementation and governance arrangements of the introduction of half-hourly settlement in April, following committing to introducing MHHS earlier that month.
It will also work with the government and industry to progress smart charging defaults i.e. pre-set charging at off-peak times, as well as to remove barriers for V2X and to develop enablers such as data and communications for dynamic smart charging.
Recognising that more work is needed to enable both V2X and smart charging, Ofgem gave the examples of needing to ensure that chargepoints are interoperable, drive consumer engagement and awareness of the advantages of smart charging, and improve the flow of data bi-directionally between chargepoints and operators, aggregators and networks.
As such, it is currently developing its position on such issues, and is working with the Department for Business, Energy and Industrial Strategy to deliver a joint EV Flexibility Policy Statement in 2022.
It will follow both the Transport Decarbonisation Plan and the updated Smart Systems and Flexibility Plan, both of which were published in July. The same month, BEIS issued a call for evidence to better understand the role of V2X technologies in the transition to net zero.
The last priority identified by Ofgem is consumer participation and protections. It is looking to support the development of innovative products that when coupled with increasing consumer awareness and confidence could boost consumer engagement. Alongside this, it plans to ensure consumer protections keep up with technological and business model changes, including working with the government on options to regulate EV-related service providers.
Neil Kenward, Ofgem’s director of strategy and decarbonisation, said: “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.”
