Electric Vehicles: Impact on Household Energy Bills

Baroness McIntosh of Pickering Excerpts

Wednesday 23rd June 2021 Lords Chamber

Asked by

[Baroness McIntosh of Pickering]

To ask Her Majesty’s Government what assessment they have made of the impact on household energy bills of Ofgem’s proposals for powering electric vehicles, announced on 24 May.

[Baroness McIntosh of Pickering (Con)]

I beg leave to ask the Question standing in my name on the Order Paper, and I refer to my interest as president of National Energy Action.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, under their green recovery scheme, electricity distribution network operators will accelerate £300 million of investment into network reinforcement to support low-carbon projects, including electric vehicle charge points. About half of this will be sourced from efficiencies delivered by network companies, with the rest from new funding. Ofgem estimates that this will translate to an additional 65 pence on consumer bills for the next two years. This will decrease to around 15 pence from 2023.

[Baroness McIntosh of Pickering (Con)]

I thank my noble friend for the Answer. Many will welcome this investment, but why are households, many with no car, electric or otherwise, picking up the lion’s share of the bills for not only the rewiring of electric vehicles but the cost of renewables and meeting net-zero commitments? I urge my noble friend and the Government to be more transparent, so that consumers know exactly who is paying for what.

[Baroness Bloomfield of Hinton Waldrist (Con)]

The noble Baroness makes a very good point, but the transition to net zero will affect everyone, and everyone will benefit from avoided climate change impacts and cleaner air. Ofgem publish on its website a breakdown of the costs that make up a consumer’s energy bill. These include the costs of maintaining and upgrading the electricity network, typically about 20%, and social and environmental obligations, also around 20%. The Government are very conscious of trying to deliver transparency.