Electric car revolution: Calculating the cost of green motoring.

Source: DailyClimate

More battery-powered vehicles would mean cleaner air and quieter streets – but also a drain on the National Grid and less fuel duty to the Treasury

<!–[if IE 9]><![endif]–>More electric cars mean more charging points on our streets.

More electric cars mean more charging points on our streets.
Photograph: Miles Willis/Getty Images

Electric car revolution: calculating the cost of green motoring

More battery-powered vehicles would mean cleaner air and quieter streets – but also a drain on the National Grid and less fuel duty to the Treasury

Streets will be quieter, the air will be cleaner, people will spend less time at petrol stations and car factories might even return to Britain’s shores if the country switches to electric cars in a dramatic, widespread fashion.

But widespread adoption of battery-powered vehicles would not be without challenges too. A large-scale switchover to electric cars could create problems for power grids, could mean roads lined with charging poles and it could also leave a big hole in public coffers as fuel duty dries up.

With just over 90,000 fully electric and plug-in hybrid cars now on UK roads, such risks and benefits might look a way off.

But this week big changes have been announced. On Wednesday Volvo said it will only launch electric or hybrid cars from 2019 and just a day later Emmanuel Macron’s new government pledged that France will ban diesel and petrol cars by 2040. Battery-powered travel could be coming far sooner than previously thought.

According to research published this week by Bloomberg New Energy Finance the proportion of fully electric new cars sold in the UK will be one in 12 by 2030 – up from one in every 200 today.

Electric cars in the UK

The surge in electric cars will have to be accompanied by thousands of new charging points to plug them all in.

Today there are around 4,000 publicly accessible locations with 13,000 plug sockets. Of the 13,000, a fifth are so-called rapid charging connections that will top up a Nissan Leaf, the UK’s best-selling pure electric car, in half an hour.

The number of sockets is set to soar to 80,000 by 2025, predicts Zap-Map, which has mapped the ones built so far. There are 8,476 petrol filling stations across the UK, most with multiple pumps, but topping up takes minutes rather than hours.

A lot of those will be in supermarkets, railway stations and NCP multi-storey car parks. But it’s also a lot of poles along streets of terraced housing that do not have the luxury of off-street parking, even though there are other innovative fixes such as the charging sockets a German company is building into street lamps.

As far as Nissan is concerned, there is plenty of space for all the new infrastructure.

Gareth Dunsmore, director of electric vehicles at Nissan Europe, said the chargers’ ubiquity will mean constantly topping up becomes the norm.

“The mindset of charging, it moves away from this idea of going and spending 10 minutes filling up your car to every time your car is not in use – which is 95% of the time – you have the ability to top up. It’s not so much space because it’s a plug socket,” he said.

One thing that will have to change with charging points is the fragmentation of the market. There are eight big networks of them now and many more smaller ones, with drivers usually requiring a different membership for each.

Melanie Shufflebotham, director of Zap-Map, said: “The early adopters have been prepared to put up with it, but the mass market won’t.” She envisages a shift to pay-as-you-go through services such as Apple Pay and Android Pay, because “it isn’t sustainable as it it is”.

Another big question for the electric car revolution is where the power will come from.

Ministers said earlier this year that even in their relatively small numbers today, electric car batteries are putting pressure on the grid. One thinktank warned that as few as six electric cars in one neighbourhood could risk a “brownout” – an unexpected drop in voltage.

Those electric car hotspots in affluent areas have not materialised yet, according to the operators who own local electricity networks – but they are coming.

SSEN, which runs such networks in the south of England and Scotland, has found that nearly a third of its distribution networks will need upgrading once 40% of customers on a circuit are charging their car battery at home.

Stewart Reid, head of innovation at SSEN, said: “There are two ways we can support the increasing number of EVs (electric vehicles) charging on the network – the first is to do traditional network reinforcements, such as installing new infrastructure and upgrading capacity. The second is using a smart solution, such as demand side management.”

Experts generally agree that the big problem is not the extra power capacity needed for electric cars, but managing the demand if all EV drivers try to charge at the same time, such as plugging in at the office at 9am, or at 6pm when they return home.

“The main challenge if everything moves to EV is managing the peaks, not the total energy production. That needs smarter charging,” said Dunsmore.

The government may also need smarter ways of collecting taxes if the sale of electric cars accelerates as expected.

Fuel duty on petrol and diesel, which has been declining as a share of GDP because of a freeze in rates since 2011, are still a “significant source of revenue” according to the Office for Budget Responsibility.

The Treasury earned £27.6bn in 2015-16 from fuel duty in 2015-16, three times as much as tobacco duties rake in and the equivalent of an extra 5p on income tax. Forecasts suggest the fuel tax take will increase to £30bn by 2021/22. If 8% of cars in 2030 no longer have owners paying taxes on petrol and diesel, the public finances would therefore take a substantial hit.

“This question of fuel duty, it’s a very real issue. It will take a long time to hit, but there does need to be a plan in place,” said Colin Mckerracher, the author of the Bloomberg report, who does not believe the cars will put a big hole in UK fuel duty take until after 2030.

When a certain number of electric cars are being sold, he thinks the government will need new mechanisms to recoup the loss – such as micropayments for drivers to use bridges and tunnels, or more upfront registration fees.

“The challenge is when do you introduce those – if you do it too early you stymie the [electric car] market, if you do it too late you put a hole in your finances.”

Petrol station owners have also been put on notice, with credit agency Moody’s saying this week that electric cars’ curbing of fuel demand will have a credit negative impact for fuel forecourt operators including Tesco and Morrison’s.

But for McKerracher, the overall economic impact is likely to be positive for the UK.

“The new Coventry factory building the electric black cab [the TX5] is one of the first new car plants for years in the UK. I think there’s a chance, post-Brexit, for the UK to seize on this as an industrial strategy, and to really lead.”