When autumn comes, California is on edge. Northern California’s Diablo winds and Southern California’s Santa Anas fan wildfires that only seem to consume more acres, properties, and lives year upon year. Subsequent power failures leave residents and businesses stranded for days or weeks. Lately, with the mere threat of fire, Northern California’s PG&E has orchestrated grid outages to preempt the risk of a power line sparking a wildfire, as it did in 2018’s Camp Fire — the deadliest and most destructive in California's history.
Those planned outages affected hundreds of thousands of residences and businesses. How can life continue when the grid goes down? As part of the solution, organizations are considering how vehicle-to-grid (V2G) technology can be deployed to use batteries from parked electric vehicles as backup energy storage systems.
“That resilience value stream is enormous,” says David Slutzky, founder and CEO of Fermata Energy, makers of V2X (vehicle-to-everything) systems. “It's not one for which you get paid, but a fleet operator would pay to have that capacity added to their existing backup power system or to replace it.”
While V2G technology can help create a self-sufficient power network within a facility, it can also facilitate another energy source to support the grid, balance electricity demand, and provide storage for intermittent renewable energies such as wind and solar. With all these benefits, the opportunity goes beyond resiliency to becoming a potential revenue source for vehicle owners and fleets.
“Fleets can charge their EVs when electricity is cheap, store it in the vehicle battery, then release the energy back to the grid when it’s more expensive and profit off the difference,” says Sanjay Dayal, cofounder and CTO of Electriphi, a developer of EV fleet and energy management solutions.
Are we ready to make the leap?
A Long V2G Runway
Though V2G has had an almost decade-long development runway — spurred by the Japanese government’s efforts with Nissan after the Fukushima Daiichi nuclear disaster in 2011 — it isn’t quite ready for primetime. If V2G is going to become a reality, it will take coordination between stakeholders such as energy utilities, electric vehicle OEMs, charging suppliers, regulators, and fleets, Dayal says.
V2G relies on three pillars to function: a bidirectionally enabled vehicle, a bidirectional offboard charger, and software that enables the interoperability between the car and the charger. Those pillars are tied together to perform demand charge management, which uses data from a vehicle, building, and charger to evaluate and predict when a building will experience peak power use. They also facilitate demand response, in which the vehicle responds to a signal from the utility to discharge the battery to help reduce system-wide peak load, as well as other uses.
Today, only Nissan Leaf, along with the light-selling Mitsubishi Outlander PHEV, are capable of bidirectional charging today in the U.S.
While the technology to upgrade the cars is minimal, some feel more research is warranted to demonstrate the long-term impact of bidirectional charging on battery life and range, which will in turn ensure that it won’t impact vehicle warranties. As well, industry regulation and standardizations need further development.
There is progress on all these fronts.
V2G-enabled models are growing beyond the Nissan Leaf. Ford, Volkswagen, Audi, Hyundai, Kia, and Tesla are in various stages of testing or readying bidirectional technology in their electric models.
Industry consortiums are creating roadmaps for V2G as charging standards transition. Slutzky points to UL 9741, a new North American Safety Standard for bidirectional EV charging system equipment, for which Fermata Energy’s charging system is the first in the world to be certified. Other UL approved bidirectional chargers are expected in the US market soon.
An increasing number of pilots are underway to demonstrate power potential, system effectiveness, and profit generation. Nissan recently demonstrated how a Leaf could power a 7-Eleven convenience store during a blackout. Fermata Energy has been involved in pilots since 2016. This year, the company launched pilots with utilities, businesses, and fleets in Louisville, Ky. and Roanoke, N.C., as well as in Denver and Boulder, Colo.
Regarding battery degradation, scholarly studies offer conflicting reports. While earlier studies have shown accelerated battery degradation, others conclude that “intelligent” V2G systems can actually improve battery life through active battery cycling. A 2019 analysis of those and other battery degradation studies was inconclusive, noting that a better understanding of battery degradation causes, better measurements of battery health, and more active management methods to mitigate impacts are needed.
V2G advocates point to the fact that automakers are equipping their vehicles with bi-directional technology as a leading indicator that battery degradation isn’t an issue.
For Fermata Energy, protecting the duty cycle of the vehicle and its batteries are a top priority. "As V2X technology becomes more widespread, V2X service providers will need to take appropriate measure to protect the vehicle batteries,” Slutzky says. “This is no longer theory; real-world implementations are showing that the technology is commercially viable today.”
And then fleets must answer the question for themselves, “Is it really worth it?”
The V2G Business Case
Dayal acknowledges the tension between operating a fleet and trying to make money on an energy transaction when the fleet is parked. “In an ideal world, you could use vehicles for both moving goods and energy storage,” he says. “But those two goals could become conflicting priorities as a fleet's schedules and operational demands are pitted against using vehicles for energy transactions.”
To balance these tensions profitably, fleets need to analyze vehicles’ duty cycles to see if they coincide with delivering energy back to the grid during a building’s costly peak load period.
Early studies of potential revenue generation showed an underwhelming extra profit of $318 to $454 per vehicle per year. Yet those figures are improving quickly with advances in battery storage and charging technology, Slutzky says.
In 2019, Fermata Energy deployed its V2G system and a 2018 Nissan Leaf to the facility where the company’s bidirectional EV charging system is manufactured. The five-month project showed that the system managed peak loads for a savings of $793 in utility bills, which pencils out to about $1,900 annually.
The Leaf only needed to supply power for less than a half hour during peak periods. With managed charging, the Leaf was subsequently able to charge fully for use the next day.
Other scenarios — on paper — are potentially more lucrative. Consider an EV fleet that is accessed during the day and returns to charge in the afternoon, when many load-peaking events take place. Those peaks are usually only 15 to 30 minutes, but they can send demand charges of $15 to $30 per kW hour to the utility bill. If the EVs can feed power back into the building regularly at those times with a newer 25-kW charger, the organization could recoup up to $9,000 a year. The savings could be higher for fleets without managed charging, as they’d get double dinged for charging EVs during peak times, Slutzky says.
Some utilities are now offering incentives through demand response programs that incentivize owners to reduce their energy demand during peak periods. These programs will increase, Slutzky says, as grid demand increases with the proliferation of EVs.
Focus on Fleets
A study by the U.S. Department of Energy found that increased electrification penetration across all sectors of the economy could increase national consumption by up to 38% by 2050. How this increase affects the grid depends on managed charging. As well, the environmental benefit of EVs depends on the electricity being generated by intermittent renewables that need energy storage.
With centralized management and predictable driving patterns, along with their ability to aggregate large amounts of power, EV fleets will play a central role in this endeavor.
Perhaps the greatest challenge for V2G is finding a scalable business model, Dayal says, one that addresses how vehicle owners are compensated for the service and how an agreement accounts for the potential of reduced battery life and performance.
Right now, for organizations looking to keep their operations up and running in the face of another grid shutdown, employing a bidirectional system for that just-in-case scenario might be enough to make the leap.
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