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How Electric Vehicles Play a Key Role in the Grid of the Future

How can EVs help or hurt the electric grid?



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A potentially lucrative new market is emerging around the exchange of energy between plug-in vehicles and the electrical grid, particularly as more low-carbon power generation sources come online.

So-called vehicle-to-grid (V2G) technologies are enabling electric vehicle (EV) batteries to provide ancillary services to the grid that can complement intermittent renewable energy sources or shave demand during peak hours -- something utilities, automakers and consumers are seeing as a business opportunity.

According to a new report by Navigant Research, global V2G frequency regulation revenue is expected to reach $190.7 million by 2022. North America represents the strongest initial market opportunity for EVs as a grid service.

The U.S. Department of Defense is making a big bet on V2G technology as a way to reduce dependence on foreign oil and cut down on its enormous energy bill. Earlier this year, DOD announced it will invest $20 million to test 500 V2G-enabled electric cars, the largest pilot project of its kind (Greenwire, Feb. 5, 2013).

Several large automakers, including Toyota Motor Corp., General Motors Co. and BMW AG, are also interested, viewing grid services as a way to boost the value of the EVs they produce.

But while it's technically feasible to hook electric vehicles up to the grid and leverage their energy storage capacity, it may not be all that desirable in practice.

One problem is that vehicles are inherently mobile. While the average commuter EV sits idle for most of the day, making it an attractive grid resource, the vehicle must always be able to serve its primary function as a source of transportation. Drivers need to have confidence that their EV has enough charge to get them from point A to B. Managing the unique demands of each grid-tied vehicle could make for a logistical nightmare.

"There's no technical reason why you cannot do this, but there are a whole bunch of operational and customer-centric reasons why you wouldn't," said Ulric Kwan, electric vehicle manager at Pacific Gas and Electric Co. (PG&E).

And while it's technologically possible, V2G communication still has to overcome a number of technical hurdles. Bidirectional communication software for exchanges between vehicles and the grid still needs to be developed, and stakeholders need to settle on a standardized means of communication, such as a 3G Internet connection or via the EV charger.

Software on existing grid networks also needs to be updated. Wholesale electricity markets were designed to deal with an aggregated load worth hundreds of megawatts, not small, vehicle-sized generators that move around and have constantly changing energy capacity.

"It's just not something the software was built to handle," Kwan said.

A more modern grid could welcome EVs
But a new opportunity could be emerging as the U.S. grid system evolves.

"We're doing a lot of grid modernization. There's a big effort with smart grid technology, upgrading grids prone to outages, and we're starting to see new generation of demand response ... and as EVs are adopted, they'll play in that system, too," said Mark Duvall, director of electric transportation at the Electric Power Research Institute, on the sidelines of the GreenBiz Verge conference last week in San Francisco.

In many ways, the timing is ripe. EV sales are starting to attain critical mass, with California alone committed to putting 1.5 million EVs on the road by 2025. Meanwhile, the cost of renewable energy is falling and resiliency concerns are driving changes to the grid.

"Utilities are modernizing the grid by increasing flexibility and resiliency. EVs are going to come in and capitalize on all that," Duvall said.

EV batteries, particularly if they're aggregated at a fleet or community level, can offer flexible storage capacity and potentially instantaneous power supply. This makes EVs well-suited to synchronize with intermittent energy resources like wind and solar.

In 2010, the University of Delaware completed the first commercial V2G demonstration in the country in collaboration with independent system operator PJM Interconnection. In July, General Motors deployed its first real-world demonstration of a solar-powered smart grid charging system at its manufacturing facility in White Marsh, Md.

Using GM's OnStar demand response program, the technology-based company TimberRock Energy Solutions is able to monitor the output at the solar-charging stations and start, slow or stop the amount of charge flowing to a fleet of Chevrolet Volts in order to benefit the grid. Depending on their state of charge, the vehicles can be used to sell energy back to the grid during periods of peak demand.

There's an app for that
While the system can deliver stored solar power back to the grid, it falls short of full bidirectional communication between the vehicles and the grid.

"I don't think it's necessary," said Paul Pebbles, global manager of electric vehicle and smart grid services for OnStar, speaking at Verge. Just by moderating charge times, EVs can simulate the effect of pushing energy back out to the grid.

Reducing EV demand at select times helps utilities balance their load. It can also directly benefit consumers. By slowing or stopping the charge during peak hours, they can take advantage of cheaper electricity rates. Ford Motor Co., for instance, gives its EV customers the ability to partake in time-of-use charging through the MyFord Mobile phone app, which tracks when local utilities switch to off-peak rates via cloud computing.

A number of apps can also tell vehicle owners where and when there is renewable energy available for them to charge on.

Automakers are now working on ways for car owners and fleet operators to profit from going the next step and allowing a utility to manipulate their battery charge. Customers would likely have to see a financial return in order to participate in V2G applications, but it's unclear what that structure would look like, Pebbles said.

He hinted that a collaboration of automakers will unveil a way for consumers to participate in the grid services market next year. Part of the delay is that utilities are still hesitant to let auto manufacturers play in the power services space, he said.

"The problem is that the utilities are not fully on board," Pebbles said. "They don't like to relinquish control. They're not used to allowing other people to control assets on the grid, and as automakers, we want to make sure they don't damage our cars."

PG&E's Kwan admitted that there are challenges in these early days. "No one has a smart-charging program that exists, really."

"Blazing new frontiers is hard and figuring out the role and responsibilities [of stakeholders]," Kwan added. "This is a complicated thing. The automotive industry is a huge industry, and it's colliding headlong with utility industry, which is a huge industry."

But that's not to say utilities will refuse to embrace the V2G market. According to Nina Kisch, fleet administration manager for PG&E, her utility sees a bright future for electricity as a transportation fuel and for EVs as a distributed energy resource.

"We really support everything that will make the grid safer and more reliable, and there are ways distributed generation does that," Kisch said. "We just want to make sure everything is done right."

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500

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