Ovo Energy plans to launch an electric vehicle charging tariff, at half the usual price, to compete with typical off-peak rates even when electricity demand is at its highest.
The UK’s second-largest energy supplier will set the tariff at a flat rate of 6p per kilowatt-hour no matter what time of day their customers choose to charge their vehicle, in direct competition with suppliers which offer cut-price charging during set hours overnight.
The supplier hopes to rival the so-called “time of use” tariffs which offer customers ultra-low rates as long as they charge when demand for electricity is low, and avoid charging when renewable energy is scarce and prices are high.
Instead Ovo’s “type of use” tariff will be less than half the typical rate from rival suppliers – without limiting the times when customers can charge – by automatically charging vehicles when prices are low. When prices are high, energy could be drawn back into the grid from the batteries of electric vehicles sitting idle.
Rivals typically range between 14.3p per kilowatt-hour (KWh), offered by EDF Energy, and 19.5p/KWh offered by British Gas, according to data from Zapmap.
Ovo’s new tariff is broadly in line with rival off-peak rates, which range from 4.5p per KWh from EDF Energy to 10.44p/KWh from E.On, but typically require cars to charge after midnight and before 7.30am.
The energy company’s tech arm, Kaluza, has used algorithms to model electricity market patterns and customer behaviour to predict that it will have more than enough idle electric vehicles to help balance the energy grid even if some individual customers choose to charge or drive at these times.
Customers will be able to set when they require their vehicle to be fully charged, or override Kaluza’s software to charge at short-notice, without any impact to the rate they pay.
Marzia Zafar, head of strategy at Kaluza, said its software gives electric vehicle users “the energy they need, precisely when they need it, at the lowest environmental impact, and now at a guaranteed price that saves them money”.
Ovo expects customers on the new Drive Anytime tariff will be able to cut their EV charging bill by more than 60%, or £200 a year, without altering their behaviour.
“Electric vehicles and renewable energy are the perfect companions for a zero-carbon world, but we have got to demonstrate that they can be easier and cheaper, as well as greener,” Zafar said.
“Kaluza shields customers from the complexities of the energy transition, while at the same time driving it forward.”