Ford Motor Company has developed an intelligent charging system that previews how its production vehicles will interact with the grid. The unnamed system enables all-electric and plug-in hybrid vehicle owners to restrict charging to when electricity prices fall below a certain threshold, or even “when the grid is using only renewable energy such as wind or solar power,” according to Ford.

Being able to drive “emissions free” could be a huge selling point for the upscale and eco-minded early adopters who will be buying EVs and plug-in hybrids during the next few years. There’s a natural synergy for customers to put solar on their homes and buy hybrids/EVs, who can they can drive free of fossil fuel guilt.

In its ongoing testing of converted PHEV Ford Escapes, the company is leveraging communications systems it designed including SYNC, SmartGauge, and Ford Work Solutions. The vehicles are communicating with the grid through smart meters over a wireless network using the ZigBee protocol, but the Ford hasn’t committed to a network platform for its production vehicles.

Ford said its final communications system will be designed to work with a variety of smart meters. The first generation of EVs is likely to use a mix of proprietary and “open” standards that are still in development. Each company will likely offer some part of their charge management technology to others in hopes that it would become industry standard.

The batteries in the 21 test vehicles are from Johnson Controls-Saft, which will also be supplying the batteries for its production PHEV. Ford will spend $14 billion over 7 years to retool to manufacture advanced vehicles.

Ford has lined up some impressive utilities to help with the tests, including Southern California Edison, American Electric Power, Progress Energy, and 10 others, which will each receive some of the test fleet. The agreement is to continue testing for three years, which is interesting because the company plans to have a commercial PHEV for sale in 2012 — you might think that testing of PHEV grid interaction would be moot at that point. Ford received $30 million in DOE grant money to pay for part of the testing. Ford is rigorously testing PHEVs now, but the all-electric Ford Focus (due out a year earlier) is not being tested in a similar broad fashion. Is developing an EV easier than a plug-in hybrid (with its two systems for locomotion)?

California, which has often led the nation in emissions reductions and environmental initiatives, is not the standard bearer in producing renewable energy. If you consider all forms of renewable energy — solar, wind, hydro, and geothermal, then California isn’t at the top in either total production, or as a percentage of energy produced. In fact, it’s not even in the top five.

Washington, with its longtime investment in hydropower, produced nearly 58 percent more renewable energy from electricity than California, according to 2007 data. In California, 25 percent of all energy produced comes from renewables, which is lower than Idaho (84 percent), Washington (77 percent), Oregon (65 percent), South Dakota (50 percent, Maine (49 percent) and Montana (34 percent). Note that this is electricity generated, not consumed. Many of the upper Midwest states actually export energy, while California imports the most energy in the country.

California’s Go Solar program has been wildly successful during the past few years, but the state wants to add a feed-in tariff which would guarantee a price incentive for all renewable power that customers sell back to the grid. The California Public Utilities Commission is developing the FiT and is expected to announce its plan soon.

The Golden State is going back to the future as it first had the idea for a feed-in tariff for solar back in 1984. When the price of oil receded, the program was canceled, only to be copied with great success in Germany, Spain and elsewhere. The city of Gainesville, Florida was the first municipality in the U.S. with a FiT; California and Vermont are considering statewide programs.

The California legislature wants to expand the state’s net-metering program, which is about to run out of room. California currently requires utilities to buy solar from customers at its full retail rate for up to 2.5 percent of the utility’s peak demand. Under AB 560, which passed the Assembly in July and is now under consideration by the Appropriations Committee, would double the net-metering cap to 5 percent of peak power.

“Raising the cap would preserve those consumer rights and allow the state’s solar industry to continue generating jobs, economic opportunity, and clean electricity for years to come – that’s a prospect that’s good for all Californians,” said Adam Browning, the Executive Director of the Vote Solar initiative.

Expanding renewable power is just one of many major issues in the cash-strapped state, so it is encouraging that state leaders are finding the time and energy to address the issue. For the Golden State to be the Gold Standard in renewables, it has a lot of work to do.

It’s understandable why some utilities might be hesitant to embrace smart grid technology. It’s expensive (RePower America says implementation will cost upwards of $400 billion) and at the same time will reduce their ability to sell their core product (energy).

Getting the utilities and regulatory agencies on board requires ample amounts of carrots (financial incentives) and sticks (limiting carbon emissions), according to energy efficiency experts Portland Energy Conservation Inc (PECI).

PECI’s new report “Wiring the Smart Grid for Energy Efficiency goes into deeply depressing detail about the many formidable challenges to implementing the smart grid. Among the toughest to tackle are that buildings ill-equipped to participate in demand response systems, and the near total lack of interoperability today between grid equipment and building energy management tools. There’s also a lack of university and professional training programs to fill the gaping hole in HVAC engineers who can maximize energy efficiency programs.

But all is not lost, because the potential energy savings will motivate building owners to embrace smart grid technologies. PECI cites a DOE study which says that up to 20 percent of HVAC energy is wasted because of inefficiency, which should be enough to get many building operators’ attention. Rockwell Automation says industrial customers could save $6 billion per year, or about 10 percent of their annual cost by implementing smart grid.

PECI makes two policy recommendations to enable the smart grid to flourish:

– Smart grid policy should have specific linkages to carbon reduction goals

It only makes sense to coordinate energy efficiency through smart grid with emissions reductions. If the goals are out of synch (for example, requiring energy reductions that would far supersede the emissions goal) would introduce confusion into the market place.

– Government funding for smart grid should be linked to state adoption of decoupling and other incentives structures

This one would be more controversial since getting Congress to act on something that benefits less than half (23) of the states would be nearly politically impossible.

Per the report:

At a minimum, only states that require utility decoupling should be eligible to receive federal financial assistance for smart grid implementation. The problem is that decoupling energy consumption from utility profits only prevents a utility from losing money from energy efficiency programs, it does not allow them to profit from these programs. Incentivizing adoption of energy saving programs and practices alleviates this sticking point and should been encouraged.

This would also be seen as an attempt by the federal government to set state utility regulations. Deregulation has had mixed success in the states, with some such as California seeing rising rates and reliability decrease. States need to develop financial incentives for energy efficiency that do not reduce utilities’ ability to generate a profit.

PECI highlights one such example:

This year, utility regulators in North Carolina and Ohio approved unprecedented rate cases that allow Duke Energy to earn the same rate of return for reducing demand as it does for increasing supply. In return, Duke is obligated to cut energy consumption 22 percent by 2025 in Ohio.

Imagine directing traffic in Manhattan when the power is out, no one knows how to find the bridges or tunnels, and most of the drivers are speaking different languages. That scenario is similar to what GridPoint is up against in building software than will enable electric vehicles, charging equipment, utilities and grid operators to all get along.

GridPoint is developing version 3 of its Smart Charging software (due to ship to customers in September) that will schedule and monitor vehicle charging while keeping track of the grid’s health. The software includes tools that enable utilities to understand how vehicles individually and in aggregate are impacting power demand. Utilities can compare recent vehicle demand on the grid with what would have happened with no control over vehicle charging to see how well their attempts at shifting the load are doing. The Smart Charging software also provides day-ahead demand projections based on previous charging data.

By connecting to the grid applications that control the power flow via the Open Automated Demand Response Communication Standards, GridPoint can slow down or stop vehicle charging during times of peak demand.

GridPoint has been busy lining up partnerships with many of the largest utilities during their ongoing EV trials, and this week added CabAire, eVco, Plug Smart Intelligent Energy Solutions and eTec as charging equipment partners. The eTec relationship encompasses more than 12,000 charging stations that are being set up in cities across the U.S., which are partially funded by the DOE.

GridPoint’s John Clark says his company’s role in electric vehicle charging is to “make it invisible.” The company works with utilities to integrate vehicle charging into their existing IT infrastructure at a cost of often more than $1 million.

To enable the smart management of charging for the first plug-in and all-electric vehicles, a small hardware module will be placed in the vehicle, according to Clark. This “brute force method” of proprietary equipment will be superseded by hardware integrated into the vehicle that will employ standards being developed for sharing data. Rather than requiring an upgrade to the vehicles, Clark says the Smart Charging software will have to remain backward compatible.

GridPoint is developing complex algorithms that must account for many factors, including the percentage of the battery depleted, the power transfer speed of the charging equipment (i.e. Level 1,2, or 3) , aggregate demand on the grid, and what time of day customers want their vehicles to be fully charged, just to name a few.

This “middleware” market that connects EVs to the smart grid will get crowded as more utilities prepare and the number of vehicles on the road grows. Companies such as Cisco, IBM, GE, and consulting firms such as Accenture and Capgemini will all look to play a role.