In this article we ask the controversial question: Does electrification exacerbate social divides? In many ways fossil fuels can be thought of as a great social leveller. Petrol can allow a person to inexpensively travel around, whether to go to work, college or engage socially. Rich or poor, the petrol costs the same.

Likewise, with Natural Gas for domestic heating, everyone who is on the national gas grid can access the fuel at the same price, day or night. Notwithstanding regional variations or the premium placed on non-Direct Debit payers, you cannot access a better price for your gas depending on your personal wealth.

The same isn’t the gas with electricity.

For instance:

• If you have the ability to consume your electricity at certain times of the day, you pay less for it.
• If you have the ability to sell electricity to the grid at certain times of day, you can earn a huge premium

And so the elephant in the room: does electrification exacerbate social divides?

First let us consider electric vehicles

There are currently a lot of incentives available for Electric Vehicle Owners. These include access to ULEZ areas, zero car tax to pay, tax benefits surrounding buying or leasing the vehicle via an employer scheme. Leaving aside the fact that these tax incentives are only available to the better off, let’s just concentrate on vehicle charging.

At home with a domestic EV charger, the normal arrangement is that you can buy discounted electricity for 4 or so hours per night. In many ways this is no different to an Economy 7 tariff which has clearly existed for decades, but with some modern tech sat on top to enable it.

But not everyone has access to an EV charger at home. This might be folk in flats, people that rent or people with no off street or allocated parking. Those people can only charge their vehicle at a public charger, and the cost for these varies between 5-9 times the price of buying it at home. Plus they are clearly less convenient, since one of the beautiful features of charging at home is that it costs you no time. Your author’s experience of an electric vehicle (which has been overwhelmingly positive) is that the battery needs to be charged every night. The idea that you can use the vehicle daily but only charge it weekly is nonsense.

The issue for this cohort then boils down to 2 factors:

• Elevated cost of electricity at public chargers
• Lack of convenience of public charging

Despite the rapid growth in electric vehicle sales and public charging points, there is no visible progress on these two issues, and there seems to be a risk of exacerbating a divide between the haves and the have nots.

Now let us consider domestic electricity.

When you heat your house or cook dinner using Natural Gas, there is a flat rate. It matters not when you use it or your socio-economic status. So far, so egalitarian.

Since electricity can have this time of use pricing mechanism, some interesting opportunities come along.

If you can shift your load to the off peak times, then you can reduce your costs. At the very basic level, this might involve running your dishwasher overnight.

But the ultimate solution is to have a home storage battery, charged overnight (or via solar), which allows to you only ever buy electricity overnight at the off-peak rate. Therefore one person will buy electricity for the Sunday Roast at a more expensive rate than another person.

But there is more. As the Carbon Tracker and the BBC report, the bill to households for “curtailment” was £40 a year in 2023 projected to rise to £150 in 2026. Curtailment is where electricity providers are paid to shut down during periods of electricity excess.

Various schemes are now at work to utilise this spare capacity rather than pay suppliers to turn off. Octopus is broadening the scope of “plunge pricing” and has just announced that it will be extended to certain public charging networks late at night (but how many people can really benefit from cheap motorway charging at 2300 hrs?).

Perhaps the most interesting development relates to the work that technology start up Axle Energy has started to develop for domestic energy asset owners. Owners of compatible batteries are able to monetise the Demand Flexibility Service, selling electricity to the grid at times of high demand.

But here are the social equality concerns. All bill payers will be required to pay to £40 – £150 per year to reflect the problems created by a legacy national grid in which power generation is not co-located with the consumption.

Rich bill payers will then see that money flow back to them in the form of Demand Flexibility Service payments or plunge pricing. So is this not a forced transfer of money from the poor to the rich?

Conclusion: Does electrification exacerbate social divides?

We recognise that we have more questions here than answers. But at first glance it does appear that we have a situation in which the poorest in society bear the costs of electrification, whilst the richest can reap most of the benefits. Put it this way. There is certainly a case to answer the question of “Does electrification exacerbate social divides?”

Maybe it was ever thus, whereby there will always be benefits accruing to those best positioned to take advantage. However the fact is that this isn’t the case under the status quo in respect of Natural Gas for heating and petrol for vehicles.

Brimstone Energy UK & Energy Abundance

At Brimstone Energy UK we created the Brimstone Manifesto, which is aligned to our values and beliefs.

Our vision is “to help your household or business enjoy abundant low-cost energy.”

Let Brimstone Energy UK be your guide to the Energy Transition.