A new report on reducing electricity costs models a slower uptake of electric cars and heat pumps than the business-as-usual scenario under current policy. The report was written by think tank Onward, with advisory practice Transira Energy providing the system cost analysis that underpins parts of the argument.
Two scenarios compared
The report explores two scenarios. The first, called “business-as-usual”, is defined as the “likely evolution of the power system under the current policy framework”. It looks at what might happen if current policy is kept in place, but “taking account of real-world delivery constraints”. The second is the “alternative policy pathway” designed by Onward.
In the business-as-usual scheme, a ban on new petrol and diesel cars comes into effect by 2030, and the rollout of heat pumps is supported by grants to households and requirements on manufacturers. In the alternative scenario, these efforts are removed and uptake depends on “lower electricity prices and greater range of consumer choice”.
Impact on electrification
Transira Energy’s analysis says removing the ban on petrol and diesel cars from 2030 will reduce adoption of EVs “despite lower electricity costs” when compared with the business-as-usual scenario. For heat pumps, it adds that “lower electricity costs drive growth at a slower rate” than in the business-as-usual model.
The analysis estimates the alternative plan results in about 10 million fewer EVs on roads in Britain by 2050 compared with the business-as-usual scenario – 32 million compared with 42 million. It also estimates that between 2027 and 2050, the number of heat pumps will increase by 7.7 million in the business-as-usual scenario compared with 6.1 million in the alternative. Both scenarios represent significant growth in heat pumps and EVs compared with current numbers.
Political response
In the introduction to the report, shadow energy secretary Claire Coutinho said: “Only a 10th of the UK’s emissions come from our electricity grid. The remaining 90% come from transport, heating and the rest of our economy.” She added: “If we want those emissions to fall, then we need people to want to use electric cars and electric heating – then our priority should be to make electricity cheap.”
In a separate comment sent to the Press Association, Ms Coutinho recognised that “the adoption of electric technology is modelled as lower” in the alternative plan, but called the business-as-usual scenario “generous” in its assumptions. Her full explanation reads: “Electrification rates are assumed to be higher in the net zero pathway because it (generously) assumes that forcing people to adopt electric technology through bans and mandates will work, even if those products add costs to people’s lives.”
She continued: “This is generous because we have discerning consumers and a democratic system – and it is much more likely that public pressure will force U-turns on these kinds of bans. We only need to look at the Labour Government’s recent announcement that they will relax the ZEV mandate because demand is not arriving quickly enough.”
“In the Cheap Power pathway, the adoption of electric technology is modelled as lower. But crucially, it is not compulsory. It is by choice because consumers have willingly adopted it. Adoption of new technology is most rapid when that technology makes consumers’ lives better – that is the story of the adoption of every single mass-market technology throughout history. That’s why the Cheap Power pathway is much better for electrification.”
