How an Ofgem policy flaw is threatening EV take-up

Without immediate action to reverse a decision by Ofgem in 2019, electric car owners could expect to pay £1 per kWh for charging at thousands of public sites in 2027 – with most of that money paid straight to energy networks.

This is the conclusion drawn by Reverse the Charge, a new impact assessment which puts real figures behind the effective ‘grid tax’ faced by operators of EV chargers in the UK reformed.

In 2019, the UK’s energy regulator, Ofgem, conducted a Targeted Charging Review and its decision that year has allowed energy networks – the companies that manage distribution of electricity – to bill businesses based on their capacity to use electricity, as opposed to their consumption of it.

For most businesses, these changes have had a negligible impact. However, for companies installing public EV chargers for the growing number of drivers, the cost of financing them is becoming increasingly strained – as the entire business model is based on selling electricity. 

Since Ofgem introduced the change in 2022, the grid standing charges set by the UK’s energy network operators have risen by 616%. At many chargers, these grid standing charges – which are paid whether electricity is sold or not – now make up a significant proportion of the price of using a public charger.

This is the first impact assessment into the change that Ofgem made and how it will impact drivers using rapid chargers.

It has been produced by the EV publication The Fast Charge, in partnership with the charging network Zest, using figures from the UK’s Distribution Network Operators (DNOs) and tariffs published by the National Energy System Operator (NESO).

The assessment finds that EV owners, especially those without off-street parking, may soon be facing significant costs for recharging publicly, and that there is little which the operators of EV chargers can do to prevent price rises. Even the removal of VAT at public chargers would make little difference, as any savings are expected to be swallowed up by grid charges set to come in during 2027.

As part of this report, Reverse the Charge can also reveal that both the UK’s energy regulator and the Government are aware of the negative impact. Internal Ofgem documents, obtained by Reverse the Charge under the Freedom of Information Act, show the regulator has known about the problem for at least a year. In a briefing for the Treasury dated October 2025, Ofgem said high fixed grid charges were keeping rapid chargers in an “unproductive cycle”, and that rising standing charges “may have extended loss-leading periods” for operators. A version dated May 2026 repeats the same analysis word for word.

The Government’s own independent review of the cost of public charging, led by Philip New and published alongside the Budget, has reached the same conclusion. It found Ofgem’s Targeted Charging Review has had a “severe impact” on charging operators’ costs, and that it had seen no evidence the new charges are properly cost-reflective for public EV charging.

Drivers are paying the price. The unsustainable grid standing charge rises over the past five years is pressuring operators to push up prices, causing businesses to pause deployment of new sites, and risks putting brakes on the UK’s EV transition.

A café is not taxed based on the number of coffees it could make in a day, so why is it acceptable to bill networks as if their chargers are all always on?  

Ofgem has the power to approve a fix. Two proposed rule changes, DCP 420 and DCP 454, would cut grid charges for EV charging. Both have spent three years in industry working groups and have yet to reach Ofgem for a decision.

The Budget on 28 October committed £100 million to cut costs at local, lower-powered chargers, but did nothing to address grid charges or the cost of rapid charging. Ofgem must now act on its own evidence, and the Chancellor, John Healey, and Energy Secretary, Miatta Fahnbulleh, must back it. The situation is already hampering investment into EV charging, pushing up motorists’ bills, and unfairly impacting those without driveways.

At a time when the cost of running non-EVs sits at all-time highs, the Government must do all it can to provide relief for people wanting to go electric.

It is time to Reverse the Charge.