UK weighs V2G credits for carmakers

The United Kingdom government is considering a financial incentive for carmakers to install vehicle-to-grid technology in electric vehicles. The plan would allow manufacturers to earn credits that offset the number of petrol cars they must sell under the zero-emission vehicle mandate.

The proposal emerged during a review of the ZEV mandate. Ministers are evaluating how to support domestic manufacturers while transitioning the energy grid. The core of the idea is to encourage the adoption of bidirectional charging systems. These systems allow vehicles to store electricity and release it back to the public grid.

Vehicle-to-grid technology enables drivers to charge their cars when electricity prices are low, typically overnight. The cars can then sell that stored power back to the grid during periods of high demand. This capability could help balance supply and demand when wind and solar generation drops due to weather conditions. It may reduce the need to run expensive gas power plants to fill gaps in renewable energy.

The government consultation on the matter closed on Friday. If finalized, the scheme would grant a credit for each car sold with the technology. That credit would effectively permit the manufacturer to sell one additional petrol model without facing fines for missing ZEV targets. Environmental groups have warned that this mechanism could lead to higher carbon emissions. They estimate that changes to the mandate could result in an additional 147 million tonnes of carbon being released into the atmosphere by 2050.

Ben Nelmes, chief executive of the think tank New AutoMotive, expressed concern about the value of the incentive. He noted that the credit could be worth around £4,000 per vehicle. In contrast, the hardware cost for the system is only a few hundred pounds. Nelmes argued that manufacturers should be rewarded for the actual use of the technology, not just its installation. He warned that many drivers do not own the expensive chargers required to use the feature effectively.

Vicky Edmonds, chief executive of the Electric Vehicle Association England, raised similar concerns. She stated that only a small fraction of the millions of electric vehicle owners in the UK are currently using vehicle-to-grid or storage technologies. Edmonds said it is too early to grant manufacturers a credit that allows them to sell fewer electric vehicles. She emphasized that consumers are still focused on immediate issues like car price and charging costs.

Current data from the National Energy System Operator suggests the technology could have a substantial impact if widely adopted. The agency forecasts that V2G vehicles could provide 1.2 gigawatts of power on demand by 2030. That capacity is equivalent to a large power station. By 2050, the forecast grows to 41 gigawatts. This amount would be enough to meet more than a quarter of the nation's peak energy demand.

Some drivers already participate in this market through private providers. Companies such as Octopus Energy in the UK, Renault in France, and BMW in Germany offer services that allow users to sell electricity back to the grid. Octopus Energy claims its drivers can save approximately £620 per year through the service. The government's proposal aims to scale this practice by integrating it directly into vehicle sales incentives.