Driving Change: The unstoppable rise of electric vehicles in the UK and its transformative impact on the energy sector
The automotive industry is experiencing a revolutionary shift that is likely to significantly impact commercial energy demand. The UK is at the forefront of this movement, where a rapid surge in electric vehicle (EV) popularity is paving the way for a greener future. This article explores the rise of electric vehicles in the UK, the potential effects on energy demand, the steps businesses need to take to adapt to these changes, and the benefits they could reap.
The Rise of Electric Vehicles in the UK
Electric vehicle adoption in the UK has seen a steep upward trajectory over the last few years. According to the Society of Motor Manufacturers and Traders (SMMT), at the end of 2016, a mere 1.4% of all new vehicles registered in the UK were plug-in vehicles (battery or hybrid). Roll forward to the end of 2022, and this percentage had risen to 22.9%.
This leap in EV popularity is primarily driven by the UK government's commitment to achieve Net Zero greenhouse gas emissions by 2050. As part of the government's plan, the sale of new petrol and diesel cars will be banned from 2030. This policy signals a paradigm shift and a collective responsibility to combat the environmental crisis, which is increasingly being embraced by both consumers and businesses.
Impact on Commercial Energy Demand
The meteoric rise in electric vehicle adoption is anticipated to precipitate a profound increase in electricity consumption, thereby significantly influencing commercial energy demand. As delineated in the National Grid’s Future Energy Scenarios (2022), peak demand for electricity is expected to well surpass present levels by 2050, a surge attributable, in part, to a nation progressively shifting towards EV charging. To download the 2022 Future Energy Scenarios summary click here.
As we delve deeper into this future scenario, it is essential to highlight that this uptick in electricity demand is not merely a matter of increased supply. The infrastructure that governs the distribution of this energy is equally, if not more, critical. Most electric vehicle charging currently takes place at home, a reality that positions domestic power networks at the crux of this transition. Consequently, the UK’s local grids may require substantial enhancements to accommodate the additional demand, especially during peak times.
Looking further ahead, as electric vehicle adoption accelerates, we may see shifts in the daily pattern of energy demand. As more and more people return home from work and plug in their electric cars for charging, there could be a significant 'EV peak' in demand in the evenings. This could put increased strain on energy infrastructure and possibly drive the need for more flexible, responsive energy systems. Strategies such as time-of-use tariffs, where electricity is cheaper at off-peak times, could be introduced to encourage people to charge their vehicles overnight when demand is typically lower.
From supply and distribution to shifting consumption patterns and sustainable production, a multi-faceted approach will be paramount in navigating this transformative period
The Role of Businesses in the Transition
The transition to electric vehicles presents businesses with both challenges and opportunities. On the one hand, companies need to upgrade their infrastructure to accommodate EV charging stations. On the other hand, this shift opens up a new market for energy companies and gives businesses a chance to display their commitment to sustainability.
Energy suppliers and businesses will have to adapt to changes in demand patterns and prepare for an increase in overall energy consumption. This could involve upgrading infrastructure, employing energy management strategies such as demand response, and considering renewable energy sources to meet increased demand.
Businesses can also benefit by installing charging points for customers and employees. The government’s Workplace Charging Scheme (WCS) provides support to businesses wanting to do this, offering grants to offset some of the cost of installing these charging points. For more information visit: https://www.gov.uk/guidance/workplace-charging-scheme-guidance-for-applicants
The Benefits of Embracing the Change
The benefits of adapting to the rise of electric vehicles are manifold. Besides being an environmentally responsible decision, it is also a financially sound one. According to International Fleet World the total cost of ownership of an EV vehicle across Europe (including the UK) is now the same price or cheaper than its petrol or diesel counterpart.
Furthermore, businesses can improve their brand image by showcasing their commitment to sustainable practices. In January 2022, consultancy.uk reported that 92% of people in the UK have some level of concern about sustainability in their consumption habits. Hence, transitioning to EVs and installing EV charging facilities could help businesses attract environmentally-conscious customers and employees.
Finally, with the UK government's financial incentives for businesses that embrace electric vehicles, businesses can offset some of the initial costs associated with this transition.
In conclusion, the shift to electric vehicles is more than just a trend - it is an essential step towards a more sustainable future. Businesses have a crucial role to play in this transition. Those that take proactive steps to accommodate this shift, will not only reduce their carbon footprint but will also stand to gain financially, benefiting from government incentives and a growing market of environmentally-conscious consumers.
As we move towards a greener future, it's clear that electric vehicles are not just a passing phase but are indeed steering the direction of travel. Moreover, as we approach the 2030 ban on the sale of new petrol and diesel cars, it is more important than ever for businesses to be prepared. This preparation involves not only embracing electric vehicles and improving their infrastructure but also refining their energy strategies to ensure they can accommodate the change in demand patterns and increased consumption.
The rise of electric vehicles presents an exciting opportunity for businesses, enabling them to align themselves with the UK's net-zero target, attract sustainability-focused customers, and ultimately ensure their business model is fit for the future.
To discuss how UGP can help with your business sustainability goals, call us on 0800 669 6697.