Vehicle-to-Grid: An Intriguing, but Challenging, Opportunity
As expected, one of the main topics of discussion at last week’s 2012 High-Efficiency Truck Users Forum (HTUF) was making the business case for deploying electric vehicles in commercial fleets, as truck makers and fleet operators alike continue to evaluate the factors that contribute to the economics of fleet electrification.
But a second theme that resonated consistently through conference presentations and sideline conversations was the concept of vehicle-to-grid (V2G). The idea behind V2G is that electric vehicles can generate additional revenue—and therefore improve the return on investment—for fleet operators by serving as energy storage devices for utilities when the vehicles are parked at the fleet depot.
It is widely held that as more renewable energy generation is added to the electric grid, utilities will need to deploy energy storage solutions to compensate for the inherent variability in wind and solar power. The aggregate battery storage capacity of a large fleet of vehicles has the potential to act in unison to provide utilities with a valuable energy storage asset. If the vehicles are connected to a two-way charger, the utility could interact with the batteries as needed, and the fleet owner would be compensated for providing this service.
While the concept certainly has potential, there are several challenges that still need to be overcome before V2G is commercially viable. For instance, V2G requires the coordination of at least several vehicles to be presented to the utility as a single storage device. When one of those vehicles is needed for a transportation purpose, the authorization to unplug is just one of the system management procedures to be developed. Further, it is difficult to forecast the total amount of storage that will be available at a given time, especially since in most cases, the utility will not own or operate the storage assets (vehicles).
Another challenge is that V2G limits the available range of an electric vehicle. When the EV battery is being used by the utility, it cannot be at 100 percent state-of-charge. Utilities require the flexibility of drawing energy from the batteries as well as using them to store excess energy when it is produced, which is, of course, not possible if the batteries are completely full. Therefore, the vehicle batteries must be kept at about 75-80 percent of their capacity when being used for V2G functionality, which impacts the vehicle’s range when it is disconnected from the charger.
Beyond this, there are other economic challenges that must be considered, including how to properly structure the battery warranty and the compensation model for vehicle owners. There are also technical questions, including the potential effect on battery life (which is difficult to determine given the uncertainty of how frequently the utility will actually use the battery). On this point, battery manufacturers with strong systems competence can draw upon existing field experience and battery life models to estimate the effects of various V2G applications.
However, despite these challenges, progress is starting to be made. The U.S. Department of Defense, for example, has taken a leadership position through its V2G project at the Los Angeles Air Force Base, where a fleet of all-electric non-tactical vehicles will be used to evaluate the capability of V2G technology. The Department of Defense clearly recognizes the significant amount of coordination and collaboration among several entities that is required to make V2G a commercially viable option.
It will be interested to see the performance of this and other V2G pilot projects, and we encourage anyone developing a V2G strategy or business model to contact us, as A123 is certainly interested in participating in collaborative efforts that demonstrate real-world value of these emerging concepts.