UK draft rules would pay carmakers £4,000 per car for grid-export tech

The United Kingdom government has outlined a proposal to offer financial incentives to car manufacturers who install vehicle-to-grid technology in electric vehicles. This plan is part of a broader review of the country's zero-emission vehicle mandate.

The consultation on these measures closed on Friday. Ministers are weighing whether to grant credits to automakers for selling cars equipped with bidirectional charging systems. These systems allow drivers to charge their vehicles automatically when electricity prices are low, typically overnight, and then send some of that stored energy back to the electrical grid during periods of high demand.

The policy aims to address a specific challenge in the energy transition: balancing the grid when renewable output from wind and solar drops below demand. If millions of electric cars can feed power back into the network, or even power individual homes, the grid would rely less on expensive gas power plants to fill supply gaps. The government suggests that offering credits could help spread a technology that is not yet widely adopted.

Under the draft rules, a carmaker could earn a credit for each car sold with vehicle-to-grid capability. This credit would effectively allow the manufacturer to sell an additional petrol vehicle without incurring fines if they fall short of the mandated electric vehicle sales targets. The government is currently preparing to lower these electric vehicle sales targets, a move that has raised concerns among environmental groups. Some organizations estimate that the proposed changes could result in an additional 147 million tonnes of carbon emissions by 2050.

Critics argue that the incentives may reward installation rather than actual usage. Ben Nelmes, the chief executive of the think tank New AutoMotive, stated that carmakers should only be rewarded if the technology is actually used, not just for fitting it. He noted that the proposals would hand manufacturers thousands of pounds per car for equipment that costs only a few hundred pounds to install. Nelmes added that few drivers own the expensive chargers needed to use the system, suggesting that ministers should ensure the benefits go to drivers and billpayers rather than carmakers' shareholders.

Vicky Edmonds, the chief executive of the Electric Vehicle Association England, expressed similar concerns. She pointed out that while millions of drivers in the UK own electric vehicles, only a small fraction are currently using vehicle-to-grid or storage technologies. Edmonds described it as too early to give manufacturers credits that allow them to sell fewer electric vehicles for a technology that has not been tested at scale in the real world. She emphasized that consumers are still focused on immediate issues such as vehicle cost, charging costs, and daily usability.

The technology already exists in some markets. Drivers in the UK can sell electricity back to the grid through companies like Octopus Energy. Similar programs are available in France with Renault and in Germany with BMW. Octopus Energy has claimed that drivers using its service could save up to £620 per year.

The National Energy System Operator, which balances the grid in Great Britain, forecasts that vehicle-to-grid power could reach 1.2 gigawatts by 2030. This output would be equivalent to the capacity of a large power station. The operator projects that this figure could grow to 41 gigawatts by 2050, which would be enough to meet more than a quarter of peak energy demand.

The government has not yet finalized the rules. The next step in the process involves analyzing the feedback submitted during the consultation period. The final decision on the credit structure and its impact on zero-emission vehicle targets remains pending.