Why Are Well-Off EV Owners Charged Half as Much as Poor Pensioners for Off-Peak Electricity?

From THE DAILY SCEPTIC

by Nick Rendell

“The surprise is not whether the dog plays the piano well or poorly but that it plays it at all!” Dr. Johnson might well have applied this aphorism to Rachel Reeves’s cancellation of the pensioner’s winter fuel allowance. However, in this instance the shock was both that the allowance was cancelled and that it was handled so badly.

As a general rule I’m fine with anything that removes the state from people’s lives. However, the ‘optics’ of this announcement were shockingly dreadful. Why wasn’t it wrapped up with a programme of initiatives, such as confirmation that the triple lock would be retained or alongside details of the forthcoming increase in pensions?

In any case, here is an even greater mystery: why are people who are sat shivering at home in poorly insulated, under-heated social housing paying about twice as much per kWh for off-peak electricity as EV owners, swanning about in their £65,000 Teslas?

You must remember the biblical parable about the widow’s mite. At the temple one day the widow was only able to afford a small charitable donation. She gave her two pennies then quietly slipped away. Meanwhile the rich man made a great show of his large donation, despite it being a sum that he could easily afford.

Well, something like that is happening today in every parish in the country. The widows in this case are mainly the poor little old ladies living in post-War houses and flats with night-storage heaters. Remarkably, there are about 1.4 million homes still using night-storage heaters. The rich men in my parallel parable are the 1.2 million EV drivers, a group not known for understating their contribution to the selfless pursuit of Net Zero, especially when that contribution is funded by subsidies from general taxation and additional charges on everyone else’s energy bills.

Why do I contrast the two groups – the 1.4 million dwellers of sub-optimal housing and 1.2 million drivers of expensive EVs? Because, in many ways they’re comparable, at least in their desire for cheap, off-peak electricity. Surely, you might think, isn’t this where ‘smart meters’ come in? Isn’t the idea that they can differentiate between user groups to provide more tailored tariffs? Alas, the £20bn or so being spent on ‘smart meters’ doesn’t seem to have delivered something quite that smart.

As a kid I remember my dad had a Ford Sierra in ‘burnished gold’. Today, like so much else, the choice of a car’s paint finish has been inverted. Long gone are the days when Henry Ford could say, “you can have any colour you like providing it’s black”. Elon Musk’s customers now seem to say, “paint it any colour you like but to us we will always see it as ‘burnished virtue”.

If our widow with three night-storage heaters could buy off-peak electricity at the same price as EV drivers she’d save about £500 per year – far more than the amount she’s missing out on if she’s no longer collecting the winter fuel allowance.

You may never have given it a moment’s thought, so perhaps it’ll come as a surprise to learn that a single night-storage heater uses about the same amount of electricity as an EV covering about 11,000 miles a year. A study quoted in This is Money suggested that the average number of miles covered by an EV was, at 8,292, slightly lower than the distance covered by the average combustion car. So, for most EV drivers, they’re using less electricity than a single night-storage heater consumes. But of course, while our EV driving eco-warriors tend only to have one EV, our widows have three or four night-storage heaters. While our EV champion is spending less than £200 a year on the 2,750 kWhs of off-peak electricity at 7p per kWh to propel his car 11,000 miles, our widows are getting billed about £350, 75% more, for each of their night-storage heaters.

But it doesn’t have to work this way. The market for EV drivers is pretty competitive with prices in the range of 6.9p to 10p per kWh, as illustrated on the right hand side of the table, nabbed from Martin Lewis’ MoneySavingExpert site and reproduced in Figure 1.

Conversely, as can also be seen in Figure 1, the kWh prices for conventional Economy 7, or “off-peak (night) rate” electricity ranges from 10.95p to 14.85p, in some cases twice as expensive.

Is there something special about ‘EV destined’ off-peak electricity in comparison to Economy-7 electricity ear-marked for our widow’s night-storage heaters? Of course not. There’s absolutely no reason why the electricity companies shouldn’t offer the same price to Economy-7 users as EV users. In fact, Dale Vince’s Ecotricity appears to do just that, well done Dale. So, why doesn’t British Gas or EON do the same?

In general I’m not in favour of regulators. We only have regulators when markets don’t work properly. Self-evidently the electricity market doesn’t work properly. But if we are going to have a regulator why hasn’t it stepped in here and required the energy companies to follow Dale Vince’s lead and not discriminate against the widows and their night-storage heaters in favour of rich men in EVs?

Even more pertinently, why doesn’t Ed Milliband flag up the potential savings if all night-storage heater users switched to Ecotricity?

Why doesn’t Milliband go one step further and encourage our widows to install night-storage heaters? A large-scale national scheme could easily get the installed price down to about £300 for a state-of-the-art unit, about the same cost as the much lamented winter fuel allowance. We’re not short of available night-time electricity which could be priced lower than gas and directly substitute a renewable energy source for a fossil fuel.

Of course, Milliband might argue that rather than messing about with night-storage heaters he wants to install millions of heat pumps. But look at it from the widow’s point of view. If she’s only expecting to live another five or 10 years she’d be mad to squander the money she’s been squirrelling away for her kids on a £25,000 heat-pump installation that would never pay back during her lifetime (if, indeed, they ever pay back during their own lifetime).

Why not go for the low hanging fruit and get night-storage heaters in thousands of homes? Oh, and while we’re at it we could tell the widow that her contribution to ‘climate change’ (assuming she gives a damn) is rather more valuable than that donated by the rich man who just razzed by in his Y-class Tesla.