A growing number of energy retailers now offer electricity plans for households with EVs. The biggest drawcard on these “EV-only” plans is usually their discounted EV “charging” hours. With electricity generation is at its cheapest during the middle of the day across Australia, the obvious question is, where are all the Daytime Saver EV electricity plans?
In this article, I’ll unpack the EV plans on offer plus some non-EV plans with “cheap power” windows that can work out very well for EV owners. I’ll consider the implications of overnight charging offers. And I’ll explain why it’s inevitable that if energy retailers want to offer genuinely discounted EV charging to households, it makes sense to do it when electricity is at the lowest cost – during the middle of the day.
Energy retailers want in on EVs
Australia is set to use more electricity as households add an EV to their garage. So, it’s no surprise that energy retailers are excited about gaining a new set of customers who will buy significantly more electricity from the grid. Since the boom in home solar, where over three million Australian households with solar have reduced their grid electricity, retailers are seeing EVs as a potential increase in demand. That’s why some retailers are getting in early to woo EV households.
In late August 2023, AGL relaunched its Electric Vehicle plan and joined the growing band of retailers whose electric vehicle plans only offer cheap overnight charging. Almost every dedicated EV plan has its designated EV charging time window between the hours of midnight and 6am.
Here is a quick recap of what’s on offer:
| Retailer | State/Territory | Discounted Charging Hours |
|---|---|---|
| ActewAGL | ACT | N/A |
| AGL | NSW, QLD, SA & VIC | 12am-6am |
| OVO Energy | NSW, QLD, SA & VIC | 12am-6am |
| Powershop | NSW, QLD, SA & VIC | 12am-4am |
| Red Energy | ACT, NSW, QLD, SA & VIC | 12pm-2pm weekends |
| Simply Energy | NSW, QLD, SA & VIC | 12am-6am |
| Synergy | WA | 9am-3pm |
At face value, as most customers will have their EVs garaged overnight, the convenience of overnight charging is appealing. But the reality is that overnight power is a costly undertaking. In Australia, the lowest price power that energy retailers can buy comes during the middle of the day. Whether they buy in the wholesale spot market, contract solar Power Purchase Agreements (PPA) or from the excess power from their solar-exporting customers. High noon is the time for low-cost electricity generation.
To illustrate the point, here are some examples of energy plans that pass on low-cost daytime electricity. These retailers offer very cheap usage rates suitable for charging an EV. However, they don’t label them as specific “EV-only” plans.
Cheap green charging is possible on non-EV plans
| Retailer | State/Territory | Discounted hours | Rates |
|---|---|---|---|
| Amber | ACT, NSW, QLD, SA & VIC | 9am-3pm most days (market-linked plan) | 0-10c per kWh |
| iO Energy | SA | 10am-4pm | 8c per kWh |
| GloBird Energy | SA & VIC | 12pm-2pm (FreeLunch plan) | Free |
Let me explain why electricity retailers are creating a fundamental problem with the current approach of leading with overnight charging on EV plans. It reminds me of where we have got to with solar plans where high feed-in tariffs exceed the actual value of exported solar. To compensate these solar plans come with inflated grid rates, restrictions and catches. If retailers want to promote and sustain the offer of “cheap” overnight charging on EV plans, it seems inevitable that retailers will need to end up doing the same thing with Night Saver EV plans, to cover the higher cost of overnight power.
Loss-leading EV rates in overnight plans
In many cases, the retailers offering low night-time EV
charging rates have set the rates significantly below cost. For gentailers (energy
retailers who also generate power) like AGL, who own large coal-fired power stations and can procure generation from 12am-6am at low cost, there is still no way that once you add in network charges, GST, environmental certificates, market fees, retail margin etc that they are anywhere near breaking even with the rates they charge before sunrise. So, these retailers will need to increase
the usage rates outside the overnight EV charging window and/or daily supply charges to cover the losses incurred to support low-cost EV charging. These retailers may be happy to lose money at this time to get insights into charging behaviour/habits, which will inform future EV plans. And given how quickly EV sales are growing, already ahead of the installation rate of home storage. It’s clear that retailers have little time before EVs move beyond the “early innovators” and “early adopters” into the “early majority”.
We’ve seen this before with solar plans…
Unfortunately, we’re seeing the same loss-leading practices we saw with high uncapped feed-in tariffs over the last few years.
The result was that consumers were set unrealistic expectations about what their solar exports were worth. And they complained bitterly when those feed-in tariffs edged back towards the true “market” value of daytime electricity generation.
Be real about low-cost electricity.
Currently, most retailers offering dedicated EV plans are setting consumers’ expectations that charging your electric vehicle between 12am-6am is the cheapest option when it’s not. Charging during the daytime is already more affordable in most Australian networks (using solar sponge tariffs that offer lower daytime off-peak network charges). It will be the case in all contestable networks from 2024 when Ausgrid, Essential Energy and Evoenergy release their solar sponge tariffs.
People are creatures of habit, and if you teach them to charge overnight (as most of the current EV plans do), you’ll have a lot of trouble changing those habits. Australia has ~100,000 EVs, but the huge growth in EV sales in 2023 looks set to continue as consumers realise that the FBT exemption, along with state incentives, see some EVs at or under price parity with their equivalent ICE vehicles.
Network costs will favour cheaper daytime charging
As well as any retailer being able to readily source low-cost daytime generation, there is a massive shift in network pricing towards daytime off-peak time of use hours by networks, as they see their minimum demand dropping ever lower as more solar is installed in the grid. These solar sponge tariffs are now the default time of use tariff in Victoria, Queensland and Victoria and will be the default tariff in NSW (except Ausgrid) and the ACT from July 2024.
Further, we are seeing more progressive network companies offer trial tariffs with even lower daytime network rates – free in some cases (eg. AusNet Services EV Dynamic and CitiPower/Powercor/United Daytime Saver tariffs in Victoria).
Here are the more common solar sponge tariffs that can be offered by retailers to provide low-cost daytime EV charging:
| State – Network (tariff) | Off-peak daytime hours | Network charge |
|---|---|---|
| NSW – Ausgrid (EA959) | Sunrise to 2pm | 4.3c per kWh |
| NSW – Endeavour Energy (N71) | Sunrise to 4pm | 7.5c per kWh |
| QLD – Energex (6900) & Ergon Energy (12C) | 9am-4pm | 3c per kWh |
| SA (RTOU & Relectrify) | 10am-3pm | 3c per kWh |
| VIC – AusNet (EV Dynamic) | 10am-3pm | -0.1c per kWh |
| VIC – CitiPower, Powercor & Unite Energy (Daytime Saver) | 10am-3pm | 0c per kWh |
Unfortunately, most retailers offering EV-specific plans are ignoring the tariffs listed above. It’s a missed opportunity to provide cheaper daytime charging opportunities for their customers. For gentailers with spare overnight coal-fired generation to sell, that may make financial sense to them. Still, I wonder why it makes sense for those retailers who don’t. Of course, the “convenience” of plugging in overnight is “more likely to work for more people”. But for consumers to buy an EV and then charge it predominantly with coal with all the emissions that entails seems to fly in the face of one of the reasons for buying a zero-emissions EV in the first place. Retailers should provide a daytime alternative when wholesale and network prices are genuinely cheap.
Here’s why daytime saver EV plans will see the light
As other retailers launch daytime charging EV plans, the situation of offering only EV night time-saving plans will be increasingly untenable because:
- Networks are increasing their support for daytime power use by increasing the availability of solar sponge (daytime off-peak) tariffs reducing network fees.
- Networks are reducing their support for overnight power use by reducing the availability of coal sponge overnight-only (off-peak) tariffs increasing costs
- Daytime wholesale prices will remain lower than night-time prices for years and probably decades to come thanks to solar power
- More retailer’s customers will install solar, and they will be paying both their customers (via feed-in tariffs) and the wholesale market (to take their excess energy when wholesale prices are negative) more if they don’t use electric vehicles to soak up their excess solar
- consumers will place increasing pressure on retailers to give them electrcity plans that reduce/minimise their emissions and reliance on fossil fuels to power their electric vehicles.
More low-cost overnight power in the future?
But what about overnight wind power in SA and Victoria – it’s not all fossil fuels most of the time?
Yes, the wind blows at night, but it doesn’t consistently achieve as low emissions or generation costs as daytime charging (and probably never will) which has the benefit of solar and wind generation in parallel.
Some tips for energy retailers
It should come as no surprise that early EV adopters are more likely to have solar and, as that usually offers the lowest cost charging, these owners often plug-in during the day to let their cars catch “some rays” from the sun. But when some retailers say, Hey, we’ll pay you 10c feed-in tariff and charge you 8c per kWh to charge, an EV owner has a dilemma. Pay $1000-$1500 for a solar-aware charging station (or a ChargeHQ subscription), or just plug-in overnight and ignore that their EV is predominantly powered by fossil fuels (in every state but SA and Tasmania).
But here’s the thing. If retailers offered cheap daytime charging, solar and EV owners wouldn’t even need to buy a solar-aware charging station. They’d just set the car to charge from 10am-2pm, and it wouldn’t matter whether the power came from – their rooftop, their neighbours or a solar farm.
By plugging in and charging around midday when renewables are at their peak, they’d support installation of more solar and reduce the need for coal-fired power stations to run overnight.
As an Amber customer, when the rates on my current tariff in the Ausgrid network around midday are frequently under 10c per kWh, I’ve been charging without caring whether it’s sunny at my place or not. I don’t have a solar-aware charging station, and I don’t need one. Using the ChargeHQ app, I can charge when prices are low and/or when there is a minimum level of renewables in the grid. Since these two are so tightly coupled, whenever wholesale prices (and Amber’s retail price) are low, renewables are high at 50+%.
Attention retailers. Please offer low cost and low emissions daytime EV charging plans
So retailers please, bring on more EV Daytime Saver plans. You’re even welcome to give them that name; no royalties are required! Let’s show consumers that charging their EVs around midday is the sustainable solution for lower prices, more renewables and less emissions. And there’s no need to force your pricing teams to do the mental gymnastics (higher peak rates and daily supply charges) that loss-leading plans require to ensure you aren’t losing money on the savvy customers. Just let the lower costs of solar and solar sponge tariffs flow through to your customers.
And for those customers whose EVs are rarely home to charge during the day, retailers can still offer overnight charging in addition to cheap daytime charging. Still, we hope they do so without the current loss-leading overnight charging rates and ideally with some visibility or financial benefits of charging when there is a higher proportion of renewables in the grid so that consumers can target their charging to the times when the wind is blowing. Apps like ChargeHQ can help consumers (and presumably retailers) with that.
Disclaimer:
Amber, iO Energy and OVO Energy are partner retailers. If you’ve read this article, you’ll appreciate that we try to all treat retailers consistently. Ultimately, we want to see an energy system with lower costs and lower emissions so we share our views on how that should happen. That includes recognising opportunities where retailers can improve (eg. by offering daytime EV charging) and also noting positive behaviours – regardless of any commercial relationship WATTever may have.