Major firms offer ‘deal’ to Ofgem and government on EVs

A coalition of prominent companies, including Scottish Power and Severn Trent, have committed to buy 70,000 British-made electric vehicles (EVs) by 2030 at the latest, providing government and Ofgem commit to specific actions on transport decarbonisation.

The Electric Vehicle Fleet Accelerator (EVFA) group has set out a number of demands of government and Ofgem, including ensuring that the RIIO-ED2 price control supports investing in the network ahead of need, fast-tracking EV charging infrastructure in the planning system and incentivising the second-hand EV market with a VAT exemption.

The group, which also includes BP, BT, Direct Line Group, Royal Mail and Tesco, describes its approach as a “deal” between industry and government to unlock £50 billion of private investment in the decarbonisation of transport over the next five years.

In a new report, it outlines four key areas where collaboration is needed between the private sector, policymakers and regulators:

• Ramp up demand signals
• Strengthen electricity distribution network infrastructure
• Expand UK supply chains
• Ensure a fair distribution of charging points on consumer-friendly platforms

Over the next year it wants to see the Department for Transport (DfT) set out a “clear funding framework” to leverage private investment in charging infrastructure, with a focus on areas that would otherwise struggle to attract the funding.

The EVFA also urges Ofgem to consult on its policy for distribution network operators (DNOs) to act as “providers of last resort” for EV charging infrastructure in areas where the market will not reach.

It calls for DfT and Ofgem to execute already-announced funds for rapid charging – of £950 million and £300 million respectively.

It is also wants government to consider direct investment in gigafactories, to provide certainty on subsidy programmes for EV vans and to support manufacturers as they transition to EV production.

Over the next two to three years, the coalition wants to see government provide more support to local authorities to fasttrack charging infrastructure.

And in the second half of the decade it asks the Treasury to address VAT disparity between home (5 per cent) vs public (20 per cent) charging and scrap the tax for second-hand EVs.

Scottish Power chief executive Keith Anderson said: “It’s great to see some of the UK’s biggest companies making the switch to EVs early but we have to remember the power network is vital to enabling this transition.

“The electrification of all EVs across the UK will mean a doubling of demand through our grid network and it won’t be ready without urgent action and investment in the grid system – and this investment must happen now and must come ahead of increasing demand.”

Severn Trent chief executive Liv Garfield said: “We set ourselves the challenge of reaching net zero carbon emissions, using 100 per cent renewable energy and having a fleet of vehicles that are entirely electric by 2030. This triple carbon pledge is our response to climate change and the threat it poses to the environment and the communities we serve.

“We’re well on our way to meeting these ambitious targets, including our electric vehicle pledge. We’re installing hundreds of EV charging points across our sites and we’ve already welcomed the first electric vehicles into our fleet, with more expected to arrive in the near future. We’ve achieved all of this, despite what the last year has thrown at us. In fact, the pandemic has made us more determined than ever, as we help the country to build back greener and cleaner.”

The prime minister and the chief executive of Ofgem both welcomed the report and pledged to work with industry to accelerate the decarbonisation of transport.