Government announces new energy price guarantee – but how will it impact EV home charging?

Government announces new energy price guarantee – but how will it impact EV home charging?
From October 1, the Government’s new ‘Energy Price Guarantee’ will mean that a typical UK household will now pay up to an average £2,500 a year on their energy bill for the next two years – following an announcement from new Prime Minister Liz Truss.

The plans unveiled by Truss will reportedly mean that the average household save up to £1,000 a year based on current energy prices.

The Guarantee will automatically be implemented to all households in Great Britain.

According to the Government, the new plans will tackle the root causes of the energy crisis, and ‘boost domestic energy supply’.

Truss said: “Decades of short-term thinking on energy has failed to focus enough on securing supply – with Russia’s war in Ukraine exposing the flaws in our energy security and driving bills higher. I’m ending this once and for all.

“I’m acting immediately so people and businesses are supported over the next two years, with a new Energy Price Guarantee, and tackling the root cause of the issues by boosting domestic energy supply.

“Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation again.”

With the introduction of this ‘Energy Price Guarantee’ – how will it impact the cost of charging an electric vehicle at (EV) home?

New analysis from the RAC has revealed that charging an EV at home will be a third cheaper than it would have been as a result of the Government’s Energy Price Guarantee announcement.

The 34p-per-kWh guarantee, announced by Truss as a part of the agreement, will mean that a typical 64kWh family-sized electric car will cost £22.22 to charge from October 1.

The analysis highlights there is still a rise of £3.85 compared to current prices, but EV owners will make a saving of £11.58 against the £33.80 figure that would have been introduced prior to Government intervention. All EV drivers should contact their energy provider for exact figures.

Following the publication of the average unit rate and standing charges that will apply under the Energy Price Guarantee which takes effect from 1 October, RAC EV spokesperson Simon Williams commented: “The 34p per kilowatt hour (kWh) Energy Price Guarantee will significantly cushion the impact of rising energy prices affecting drivers of electric cars.

“From 1 October it will cost on average £22.22 to fully charge a typical 64kWh family-sized electric SUV, £3.85 more than it does currently, and a third less than it would have cost under the new cap that was announced by Ofgem on 26 August (£33.80). Drivers will need to contact their energy provider to confirm the exact price of their new tariff.

“It remains to be seen what impact the Government’s new package of help will have on chargepoint operators and the prices they set drivers, but we remain concerned about the rising wholesale costs of energy that may force some to increase their prices in the coming months. 

“There’s the potential for the Government’s net-zero transport ambitions to be derailed if higher electricity prices put drivers off from switching to an electric model, which is why we have called on the new transport secretary to cut the 20% VAT rate on public chargepoints to match the 5% charged on domestic electricity.”

You may also be interested in our RAC Charge Watch initiative.

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