Fears grow over National Grid’s ability to charge up millions of battery-powered-vehicles in brave new ‘BPV Britain’

The announcements that BMW will make a Mini BPV (battery powered vehicle) from 2019 and Brit-govt. plans to ban sales of petrol and diesel cars from 2040 will put added pressure on the UK electricity supply industry to meet demand.

National Grid’s Future Energy Scenarios 2017 predicts BPVs could add 8GW of demand at peak times, from 60GW today to 85GW by 2050, highlighting the need for a real focus on ensuring we have the means to generate the secure, reliable, available low carbon electricity to power our future.

The Brit-Govt decision to make a ‘BPV Britain’ also caught the minority SNP-led government in Scotland on the hop.

A spokesman at St. Andrew’s House said only: “Our officials are studying the detail of the UK Government’s plans to phase out petrol and diesel cars and, crucially, what they mean for Scotland”.

Chris Evans, Deputy Managing Director of the Rolton Group, a Birmingham-based civil engineering and infrastructure conglomerate, warned:

“Automotive manufacturers are making great strides in terms of BPV technology, hurtling confidently towards the future and spending billions on the transition to electric vehicles as the public’s primary mode of transport.

“However, despite the positive outcome on pollution and carbon fuel usage, this is totally out of step with the capabilities of our ageing National Grid. We can’t keep expecting our ageing energy infrastructure to continue making provision for such heightened energy demands without investment.

“The fundamental issues born of historic methods of UK fuel consumption still aren’t being dealt with. The basic infrastructure requirements to cater for greatly increased energy demands has, to date been largely ignored by government policy. In fact, these half-formed sustainability measures can be likened to rearranging deck chairs on the Titanic.”

Meanwhile, financial experts have warned of the huge fiscal gap with a ‘BPV-Britain’ costing the Treasury up to £170 billion in lost petrol and fuel duty taxes (as well as the VAT levied on these taxes). Kevin Nicholson, Head of Tax at PWC, explained:

“The ban on new diesel and petrol vehicles from 2040 is the death knell for fuel duty revenues. This will leave a big hole in the Treasury’s coffers

“Fuel duty currently accounts for 4% of UK tax receipts, bringing in nearly £28 billion this year. In comparison, Stamp Duty Land Tax brings in about half that amount, and council tax raises £30 billion.

“As a percentage of GDP, fuel duty revenues have been in decline for some time, partly because of the trend for fuel efficiency.  The OBR has forecast fuel duty revenues will decline by about 0.5% of GDP by 2021/2. 

“No doubt recognising the need to keep tax receipts steady, the Government has stated that from 2018-19 the main rate of fuel duty will rise each year in line with the RPI index (fuel duty has been frozen since 2011). 

“These rises will be pretty meaningless once petrol and diesel car production stops.

Kevin Nicholson
Kevin Nicholson

“The Government will need to find alternative sources of tax revenue. And it would be a mistake to simply look for ways to plug the hole left by fuel duty.  The fourth industrial revolution, with new technologies like artificial intelligence, is going to continue to shake up the tax base. 

“More immediately, Brexit will force change to the tax systems as rules need to be revisited.   The need for a fundamental review of the UK tax system can no longer be ignored.”

Meanwhile, more than a fifth of people in the UK are  not convinced that BPVs will reduce air pollution, according to new research from Baringa Partners, the independent energy consultancy.

The research reveals that 23% of people do not think electric cars are better than petrol or diesel cars at reducing carbon emissions. Similarly, 22% do not believe they are better at improving air quality, with this rising to 26% of 18-34 year olds.

Oliver Rix, Partner at Baringa, commented: “Given the clean credentials of electric cars are failing to get through to the public, an outright ban on all petrol and diesel vehicles is likely to face resistance amongst some drivers.

“The high proportion of people not yet convinced suggests the Government needs to focus on effectively communicating with the public, particularly given the concern that there could be a high level of distrust in car makers following various emissions scandals.

“Unlike diesel and petrol cars, BPVs produce no direct emissions, so they have a vital role to play in reducing air pollution. Progress has been made – but now we need a plan for the hard task of convincing those who are not yet persuaded.”

28 July 2017

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