Driving down costs: Ovo Energy's EV charging tariff could halve running expense
As the electric vehicle (EV) market continues to gain traction, the purchase and running costs incurred are now also becoming more competitive. For a long time, the initial outlay for an EV was one of the prohibitive factors preventing people switching from fossil-fuelled vehicles but the disparity in pricing is falling. Recent reports have highlighted how reduced battery costs are making EVs ever more affordable.
This is also the case for charging tariffs and Ovo Energy, the Bristol-based renewable energy suppliers, have announced a new tariff at half the usual price which will be available at any time of the day. This tariff will compete with other suppliers who offer reduced rates but they are restricted to certain times of the day when demand is low.
The Drive Anytime plan was announced on January 27th and works by differentiating between electricity used for household energy and for charging an EV. Customers are charged at the normal rate for all electricity used and then credited a month in arrears for the electricity used to charge the EV. Effectively, this will reduce the cost of charging the EV to 6p per kWh with the household electricity use costing 13p kWh.
This brings Ovo’s tariff into line with rival off-peak rates which typically range from 4.5p kWh to 10.4p kWh. The crucial difference which Ovo will offer is that their tariff is available at any time whereas their rivals’ off-peak rates are usually only available between midnight and 7:30am.
Ovo is testing the Drive Anytime tariff with a group of their members and expect the plan to be fully operational in a nationwide rollout by the end of autumn. The expected annual reduction in costs to a typical driver could be in the region of 63% or £200.
The plan is powered by Kaluza, Ovo’s Artificial Intelligence energy arm, who use live data on energy pricing, weather and local network constraints to derive algorithms capturing the cheapest and greenest electricity on the market. It also provides users with certainty in a market where prices fluctuate.
Ovo was founded in 2009 and took over Scottish and Southern Energy’s (SSE) energy supply arm in 2020 to become the second largest energy supplier in the country. The deal increased their customer base from 1.5 million to 5 million homes and leaves them perfectly positioned to become more involved in the EV sector.