Charging electric vehicles at home using flat-rate electricity tariffs risks “blowing up” the network and imposing major costs on disadvantaged households, undermining the push to net-zero emissions.

That’s the view of Gavin Dufty, executive manager of policy and research at the St Vincent de Paul Society, who last week attended an electrification roundtable hosted by The Australian Financial Review.

Dufty says households able to afford electric vehicles and charge them at home are being given discounted flat-rate tariffs for power consumption, which raises serious equity issues.

“At the moment, you can have an EV and charge any time you want on a flat tariff. That is blowing up the network and shifting costs on to non-EV owners, and the regulatory framework allows for that,” he says.

“You’ve got a whole lot of discounts. Should an energy discount, home concession, apply to EV charging? I’m not sure.

“Should the same protections that come with an essential service like heating and cooling – should that be applied to an electric vehicle that can drive down the road and go to a commercial charging point?”

The issue is the cost of retail electricity needs to reflect the cost of delivering it to consumers, but if some EV owners are able to get cheaper charging, they are not equally sharing the cost of the infrastructure.

Ability to strip out value

This then requires either other EV drivers to pay more for charging, or it requires the cost to be shared across all households more generally.

“These assets have the huge ability to strip out value and take value away from other people that don’t have those assets and other communities because they are based in particular communities,” Dufty says.

“So [there are] huge equity issues.”

Grattan Institute’s energy program director Tony Wood says EVs are one of three emerging power drains that are fundamentally altering electricity demand, along with the shift from gas and the rise of artificial intelligence.

The concern about equity in EV charging was raised amid a broader conversation about how to deliver affordable charging for electric vehicles, including to the many households that could not utilise in-home charging.

Marc England, chief executive of east coast electricity distributor Ausgrid, wants governments to allow network infrastructure managers to install EV chargers on their existing poles and wires, which he says is easily done.

Different pricing outcomes

Ausgrid is installing 150 charging stations on streets across greater Sydney, the Hunter Valley and Wollongong. He calculates the region needs 11,000 and the whole state 30,000.

Importantly, he says these could then be connected to a person’s existing energy retailer and billed directly to their household account based on a variable tariff that would shift depending on the time of day and demand.

Dufty says while the idea is a good one, it creates a problem of equity between people charging at home on cheap fixed rates any time of the day or night, and those forced to charge out-of-home on higher variable rates.

“You’ve got two groups with different pricing outcomes. What you want is cost to reflect your pricing for EV, and, well, everything, and that’s not there.

“I these things come in a rush and scale, the cost to non-EV households will be great and the ability to unpick those cross-subsidies later on, I worry.”

Extracted in full from:  https://www.afr.com/politics/federal/the-big-equity-problem-in-household-ev-charging-20240623-p5jo2a

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