Politics and plug-ins: planning for an electric vehicle future

November 2018 | EXPERT BRIEFING | SECTOR ANALYSIS

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Developing technologies around electric vehicles (EVs) are colliding more and more with UK energy regulatory and planning laws.

Lawyers are receiving an increasing number of enquiries from utility providers, technology companies and regulatory bodies, many of which are seeking clarity on the interplay between grid-scale and local energy provision for EV charging networks, and for guidance on what other issues need to be considered.

Implementing new technologies, such as EVs and the necessary charging infrastructure, requires a broad view across a number of legal practice areas. As well as town planning, interested parties must also take account of regulatory, environmental, construction and procurement implications – areas they would not necessarily need to consider for what are often relatively small-scale projects.

Because the EV industry is so novel and growing so rapidly, accommodating its expansion raises a number of issues about how laws regulating energy, transport and development interact with each other. This is creating a need for potentially radical reforms in the way these laws are interpreted and applied.

EV charging infrastructure in the UK is still at the foundation stage. Thus far, nobody in either the public or private sectors has been able to put forward a credible plan for how to roll it out on a large scale. Even National Grid, which has made several announcements about its plans for motorway charging points, has carefully couched its goals in aspirational terms, rather than outlining detailed practical measures for achieving them. The reality is, in the UK, we should not expect to see a sustainable and effective EV charging network in place any time soon.

That said, a number of entities other than National Grid are looking at ways to roll out EV support infrastructure and the sharing of ideas, complemented by appropriate regulatory input, could ultimately yield practical solutions.

Joined-up approach

The issue for many organisations, whether they are consultants, large utilities or small installers of charging points, is that the current approach to building this network lacks coherence. It is relatively straightforward to install charging points on an individual basis, in homes or in service stations, but, at present, there is no overarching strategy in the UK across all the arms of government, organisations and regulatory bodies needed for an EV charging network to be rolled out in the way policy makers have envisaged, and to facilitate a totally electric UK vehicle fleet.

For example, the UK Department for Transport’s (DfT) ‘Road to Zero’ strategy, which was launched in July 2018, and which outlines the government’s ambition to ensure that at least half of all new cars made in the UK will be ultra-low emission models by 2030, demonstrates little appreciation of the regulatory considerations that will kick in for the energy regulator (Ofgem), National Grid and the various distribution network operators (DNOs).

Similarly, the Automated and Electric Vehicles Act 2018, which received royal assent in July, only provides for regulations to be made in the future to deal with access to charging points in certain places, rather than for comprehensive facilitation of an EV support network. Several companies have put their hands up offering to implement the government’s strategy of installing a nationwide system of charging points. Most have indicated that they plan to use existing facilities at motorway service stations and public places to accommodate charging points, a scheme that will only work if there is significant collaboration between local planning authorities and highway authorities on planning matters.

As EV usage increases and charging point numbers grow, we could see, in town planning terms, material changes in the way charging locations are used, creating the need for planning applications under existing planning law. These would require assessments of traffic numbers, access and parking, noise and light pollution and extended hours of operation. These sorts of issues, and the time taken to determine planning applications, traditionally represent barriers to awarding planning permission, particularly in residential areas.

The introduction of permitted development rights for charging infrastructure could go some way to facilitating roll-out, as it has done with telecommunications antennae, but cars and EV charge points are bulkier than phone masts, with arguably greater impacts on people’s day-to-day lives.

In deciding how to balance the rights of EV owners and people who may not own a vehicle, electric or otherwise, certain questions need to be addressed, such as: Who would benefit from such rights? How would they interact with apparatus of statutory utilities? And how would they apply on the scales required to achieve the UK government’s vision?

It will also necessitate a substantial upgrade of the electricity distribution network, which is likely to be both complicated from a regulatory perspective and extremely costly. Ofgem’s ‘Future Insights’ report warned that without a guaranteed flexible charging or load-spreading approach, whereby EV users mainly charge their cars at night, when there is excess generation in the system, meeting the government’s targets for EV penetration will probably entail expensive network reinforcements.

Capacity and design issues with many local and distribution-level electricity networks mean that major upgrades will be required across most of the country. However, DNOs are heavily regulated by Ofgem, which sets price controls and decides how much they can invest in the network and recover from users. This creates a conundrum for Ofgem: does it build these costs into DNOs’ price controls in advance, or wait to see the take-up of EVs before allocating funding for infrastructure reinforcements? Consensus is that, in the long-run, it will be a lot cheaper to run EVs than it currently is to run petrol or diesel cars, but getting to that point looks certain to incur a huge capital cost to taxpayers, not all of whom will be vehicle owners.

New ideas, old delivery mechanisms

Part of the problem is that energy generation and distribution are based on anachronistic, centralised systems, controlled by the National Grid and Ofgem, respectively, which do not match up with the highly decentralised nature of EV usage.

The DfT’s ‘Road to Zero’ contains a proposal for charge points to be installed as a matter of course in newly-erected lamp posts, potentially delivering a massive expansion of the plug-in network.

While this sounds like a good idea in principle, the fact is that the distribution networks underneath these lamp posts will still need to be ripped up so that they can be reinforced to accommodate the extra electricity demand. Who would foot the cost for this work is not yet clear.

Another government proposal, this time from the Department for Business, Energy & Industrial Strategy (BEIS), is to use smart meter technology to reward energy consumers for charging EVs at off-peak times, thereby incentivising and hopefully ensuring load spreading.

Legally, however, there are unanswered questions about whether this is possible under the current licensing regime, which was not devised with EV charging in mind. It is also questionable whether the technology required to create a fully interconnected smart meter network for this purpose is readily available, or whether the capacity to power the required data transfer exists, or can be effectively mobilised.

Wholesale reform of the UK’s energy generation and distribution network, both physically and in a regulatory sense, is unavoidable if the government is to match its aims for EV adoption to when and where people use energy. Policy makers, regulators, large utilities and start-ups are all racing to set goals for EV take-up, but this is not being backed up by commitment to tackling the logistics of achieving these targets in a sustainable, cohesive way.

From a legal perspective, this looks more like policy on the hoof than a roadmap to an electric transport future.

Yohanna Weber is a partner at Fieldfisher. She can be contacted on +44 (0)207 861 4793 or by email: yohanna.weber@fieldfisher.com.

Yohanna Weber

Fieldfisher