How EVs are the affordable answer to greener driving: even in an energy crisis
Given the global gas crisis, it costs a lot more to drive traditional petrol cars. Electricity costs more too – thanks to the backwards way our market's set up – but electric vehicles are still far cheaper, and of course, greener, to run than the fossil-fuel-guzzling alternatives.
In fact, after analysing tons of data based on the real experiences of Octopus EV customers - we found that you can now run an electric vehicle for under a third of the price of an internal combustion engine car (ICE). And that’s not all… In this blog we’ll explain a whole host of ways that electric vehicles can help you navigate the energy crisis.
It’s cheaper to drive an electric car than an ICE no matter how you charge your car (or what tariff you’re on)
However you charge, EVs are cheaper to run. but the specific costs for charging an EV depend on whether you charge at home or on the go, and what kind of tariff you have - with setups costing a fraction of the price. Let's break it down.
If you charge your EV at home, it can cost just a fraction of running an ICE!
If you move to our specialised next-generation EV tariff, Intelligent Octopus (IO), charging at home costs you just £49 per month compared with £165 per month for fueling an ICE, saving you a whopping £116.(1) It is really simple to set up, and allows us to move your charging to the very cheapest times overnight.
Yes that’s right - running an EV on a specialised tariff really does only cost around a third as much as fueling up an ICE car. And while we don’t track servicing costs, because EVs have fewer moving parts, servicing costs are much cheaper too, as the US Department of Energy explains.
Charging away from home can be more expensive, but it’s still cheaper than running an ICE
If you tend to use a mix of on-street and home charging, the costs change a little. After running the numbers, our boffins found that people who chose to charge like this generally have lower mileage - it goes down to around 435 per month (5,291 per year).
With that in mind, using a mix of on-street and off street charging (via our cutting edge Intelligent Octopus tariff) costs £25 per month compared to £63 for an ICE - saving you a tidy £38.(2)
Customers who mostly use on-street charging drive even less on average - covering 197 miles per month or around 2398 per year. The price for an EV charged on the highest mix of on-street charging is £20 per month, which is still cheaper than the equivalent ICE cost of £28.5 per month.(3)
Don’t have the right EV or charger for Intelligent Octopus yet? Charging with our next best EV tariff, Octopus Go is still far cheaper than running an ICE!
If you aren't on Intelligent Octopus, you don't get all the glorious benefits, but we found that if you mostly charge your EV at home using Octopus Go, you'll spend £81 per month on average (compared to £165 running an ICE). In the same vein, if you use a mix of home charging (with GO) and on-street charging, your costs would drop to £36 per month, compared £63 per month for the equivalent mileage in an ICE. And if you mostly charge on the street, but top up with the go tariff, costs fall from £28.50 to £22 per month.
Even on a standard SVT tariff, charging your EV costs less than fuelling an ICE...
At £153 per month, the cost of home-charging an EV on a default SVT tariff is still £13 per month cheaper than running an internal combustion engine car (ICE) on unleaded petrol (which would cost you £165). And if you use a mix of on-street and SVT home charging, this changes to around £59 per month, compared to £63 for an ICE - despite the current high electricity prices!
And that’s not all… We expect continued tariff evolution - in other words, things are going to get even better.
We already have Intelligent Octopus in the UK, Texas and New Zealand, and are rolling it out in more countries, to more people and to more devices. Not only will there be more of these tariffs - they’re only getting smarter too. Watch this space!
EV don’t just help their drivers navigate the energy crisis, they help everybody!
EVs can help us ‘balance’ the electrical grid
Smart charging tariffs, like Intelligent Octopus, can ask cars to charge when the grid is less ‘stressed’, and costs are lower.
The grey bars on the graph below are the half-hourly wholesale price of energy - and here you can see Intelligent Octopus charging when cheap, green electrons are abundant and the grid is more easily able to meet demand. This brings down the price of energy for everybody.
Vehicle to Grid (V2G) takes things a step further!
Bi-directional charging tech (in your car and in your charger) will give drivers the opportunity to make extra use of their EV battery while it’s parked at home. You can set a reserve limit (e.g. 30% battery charge) and then smart scheduling takes over - discharging your battery to power your house and selling any extra energy back to the grid while electricity is dirtier and more expensive. Once your battery is down to the reserve limit, it charges up again on cheaper, greener energy ready for the next day!
Customers in the Powerloop V2G trial saved up to £180 by offsetting home demand and exporting extra energy, on top of savings from intelligent (IO) charging.(4) Further Octopus analysis shows customers could unlock potential savings of up to £840 per year, compared to unscheduled charging on a flat rate tariff - putting money back in people’s pockets at times of record high energy costs. The technology isn’t widely available yet, but several large car brands have committed to including V2G technology in their new EVs!
EVs can help the electrical grid when it gets overloaded
When it looks like there might not be enough electricity going into the system to meet demand, the system operators can ask generators to increase the amount of energy they’re pumping into the system - or try to find ways to get consumers to lower demand. Thanks to smart charging tariffs like Intelligent Octopus, EVs can help with the latter, momentarily ‘turning down’ their charging.
The UK often has to fire up extra dirty coal and gas stations to satisfy everyone’s energy needs at the busiest times of day. This is really expensive - so by reducing demand instead, EV’s don’t just make energy cheaper for their owners, they make it cheaper for everyone!
The orange line is the power the EVs are drawing from the grid, the grey bar shows what happens when the system operators ask them to ‘turn down’.
In the middle of a gas crisis, EVs are a step towards a greener world
EVs help us make the most excess renewable generation
Sometimes more renewable energy goes into the system than people can use. In situations like this, system operators often have to pay renewable generators to shut down and dump or ‘curtail’ their energy.
In 2020, Germany curtailed 6.1 TWh of renewable generation, at a cost of €761 million, or roughly €124/MWh. Rather than being wasted, this energy could be sent to EV drivers to store in their batteries for use later on. Given that an average car might use around 2.5 MWh per year, in this case, you could have paid EV drivers €200 to charge their car for a year and still saved money on curtailment costs.(5)
And lastly, if you weren’t driving an EV, you’d be driving an ICE, sending 218kg of CO2 into the atmosphere on average
Buying petrol or diesel means you’re unnecessarily relying on global gas and oil markets. This has all sorts of grim consequences, from indirectly supporting Putin’s war in Ukraine, to funding fossil fuel producers, and contributing to global warming. Depending on the carbon intensity of the electrical grid, EVs still emit CO2, but on average, emissions are 16 - 18% of ICE and they get a lot greener when you use the cleaner, greener electrons provided by a smart charging tariff.
Workings and assumptions
**OK if you really tried to ramp up your costs and only ever charged your EV at ultra high speed motorway service stations, you could make charging your EV more expensive than filling up an ICE, but you'd have to really try...
(1) These figures are based on a car travelling 13,925 miles per year (people who mostly charge at home have a slightly higher mileage than the British average of 11,000 miles). The ICE costs are calculated on the basis of a new car averaging 52.6 MPG, at 164.89 pence/litre (14 November 2022) from https://www.rac.co.uk/drive/advice/fuel-watch/. For the EV, we assumed 0.25 kWh/mile, with 80% charging at home on 10p/kWh and 20% charging away at 60p/kWh, with a total charge required of 286kWh. Please note this overestimates the EV car cost - Overall charging rates today vary (from 29p/kWh at lamppost chargers to between 75-80p/kWh for rapid charging at service stations). Our user data over two years results in a weighted figure of 45p, which we have increased to 60p to be more representative of current electricity prices.
(2) Numbers and prices as before, except mileage (5,291 miles), and proportion of home charging 70%.
(3) Numbers and prices as before, except mileage (2,398 miles), and proportion of home charging 37%.
(4) The Powerloop trial was an InnovateUK V2G project that ran from 2018 to 2022 and was led by Octopus Electric Vehicles and Octopus Energy, with support from Innovate UK, BEIS and OZEV. *Based on analysis from the original Powerloop V2G trial, scaled up for a driver travelling 10,000 miles a year, factoring in historic electricity costs
(5) Assumptions: average German car drives around 12,600km per year, average EV can do 0.2 kWh/km, 12,600*0.2 = 2,520 kWh or 2.52 MWh. Given current curtailment costs of €124/MWh, paying EV owners only €100/MWh to charge their car for the year would result in savings of €60/MWh to network companies, and EV owners benefit.
Published on 8th November 2022 by:
Hey I'm Constantine, welcome to Octopus Energy!
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