Part of Automated and Electric Vehicles Bill – in a Public Bill Committee at 3:15 pm on 14 November 2017.
There are two specific points that I would like to raise in relation to clause 10, but before I do so I would like to explain why they arise.
As I understand it, about 90% of charging for current electric vehicle use goes on at home, largely overnight at low voltage. In trying to achieve the Minister’s aim—which is the Government’s aim and the cross-party aim of the House of Commons as a whole—of achieving a step change in which we move from 100,000 electric vehicles to tens of millions of them, one of the things that needs to be addressed is what we were discussing a moment ago: the issue of overnight, on-street parking. However, there is a paradox.
Even if there were 10 million on-street parking charging points working beautifully, unfortunately, there would not be very many electric cars using them because there is range anxiety. That is another limiting factor in the expansion of electric car take-up. That range anxiety may in due course be resolved by the advance of battery technology, the introduction of solid state batteries and so on—I very much hope that it will be. The Minister, I and the Committee as a whole recognise that we cannot predict the speed at which battery technology will advance to the point at which relatively cheap and light batteries can carry someone for 400 or 500 miles on a reliable basis. The overwhelming majority of journeys per day are 20 miles and under in the country and do not actually cause any range problems.
I am sure that other Committee members feel, as I do, inhibitions about purchasing a vehicle that will run out of charge if I am trying to make the journey from London to my constituency, then travel around my constituency, if I cannot find a point at which to charge it. Unlike the position on the overnight charging, range anxiety can be cured—unless we adopt the Israeli model, which I am not recommending—only by very high voltage, fast charging at points on the journey that are not too far from the start and are interspersed at relatively short distances. We could debate whether that distance is 50 miles or 100 miles, but if we fixed in our mind the importance of making sure that nobody who started in London and was trying to get to any point in the country would find that it was more than 50 miles before the next fast charging point was actually available—I do not mean was sitting there and being occupied by some other car, but was actually usable at the time they wanted it and could charge their car in five or 10 minutes, at a reasonable price, while we went to buy the paper, went to the loo and did the other things we do at service stations on motorways—range anxiety would be at an end in the UK. Is that achievable, and does clause 10 allow the Government to ensure that it will quickly be achievable? Those are the questions that we need to address.
The answer to the first question—is it achievable?—is yes, it is abundantly achievable. The National Grid is conducting a trial with UK Power Networks to show the cost of stringing lines from the nodes on the high-voltage network to service stations, which will establish the cost of a core network of 50-mile spaced service stations, on the motorway network in the first place and, quickly thereafter, on those parts of the trunk road network that are necessary to cover in relation to, say, Cornwall or Scotland.
I stress that it is all about Highways England, the National Grid company and a few of the DNOs from time to time. Nobody else needs to play a part. If they were all working together to install the relevant infrastructure quickly, it is perfectly doable and not terribly expensive. I have spent time talking to the National Grid company about the likely cost of this, and even if we take quite a high estimate, the effect on bills for customers buying electricity would be in the order of 0.1p per kilowatt hour. It is very small beer. I cannot overemphasise the importance of curing range anxiety early—if we do, we will get scale, and if we get scale the price of electric vehicles will drop, then we will get demand. We would get a virtuous circle. The speed with which we do that will very much influence the future industrial history of this country, because if we do it quickly enough, so that we get scale in electric vehicles before other European countries do, we will be ahead of the market and all sorts of investment decisions will flow to the UK. If we are slightly behind them—and I welcome what the Minister said about being ahead of the curve—it will have the opposite effect. They will be built in Germany and later exported to the UK. That must be our aim: to establish a national network of fast charging points, supported by very high-voltage cables, quickly installed at distances along our motorways and trunk roads, which enable people to make a journey from any point to any point in the UK without anxiety about range, even if their vehicle only has 75 miles of battery range.
Two items are missing from clause 10 that would enable the Government to achieve that. First, there is no power to compel the National Grid company to install such links. It goes back essentially to the same kind of structural point that I was making about DNOs in relation to on-street charging, although the item here is quite different: we are talking about a big, heavy-duty, high-voltage cable. However, the principle is the same. At the moment there is no knowing whether Ofgem would allow NGC to charge to its regulatory asset base such links, because there is no power in the Bill or anywhere else that allows the Minister or the Secretary of State to mandate the creation of such links. That is another item that I strongly hope the Minister will consult his friends at BEIS about and, in due course, come forward in the other place with appropriate minor amendments.
There is a second lacuna. We heard in the evidence sessions a pretty strong plea from the representative of service stations and petrol retailers that the Minister should not regulate them as suggested in clause 10. The more I heard of that plea, the clearer it became that the Minister was right to take the powers he is taking in clause 10. It seems to me abundantly clear that if someone is running a motorway service station that is a monopoly franchise, and if there is in that station a provider of charge points that is in itself a monopoly franchise—for reasons that defeat me, that is how it has grown up—it is absolutely right that the Minister should have powers to regulate them into providing, once the cables are there from NGC, the right kind of charging equipment in the right quantities to cure the range anxiety.
However, as I said, there is a lacuna. If a monopolist is told by a Minister that under a regulation, they have to provide those things, they will consult their economics textbooks and discover that they can exact a monopoly rent. They can charge an unlimited amount of money and thereby seek to prove to Ministers that they should not be telling the monopolist to build too many of the charge points because, at the exotic prices being charged, not many people are using them. The only problem with all that is that we would not get the electric cars.
In order to complete the circle, the Minister needs a power not contained currently in clause 10: the power to impose price caps on the provision of these services. Those caps ought to enable providers to earn a normal return on the asset, as in any other utility transaction. Ofgem is quite capable of adjudicating those matters, but it needs some primary legislation enabling the Minister to impose those price caps or to impose on Ofgem the duty to construct such price caps. I neither know nor care which way it gets drafted, but it needs to be drafted to the effect that, one way or another, NGC puts in the high-voltage cables in the appropriate points to give us the appropriate network, and the providers of the charge points in those service areas in the motorway and trunk road network have to provide them at a capped price. Then all the other things the Minister has provided for in the Bill about making regulations to ensure that the charge points are of the right kind, are paid for in the right way, are uniform in their connection to cars and so on would apply. We would close the circle and get the golden combination of enabling our population to charge up at home overnight at low voltage, cheaply, and curing range anxiety by charging very fast at relevant points on the trunk and motorway networks when making long journeys.