Using plug-in electric vehicle (PEV) batteries to support ancillary services for the grid has been a promise of the PEV revolution for years, but signs of the market’s viability have been limited until recently. Two recent developments are driving innovation and development in this market, and proving the worth of vehicle-to-grid (V2G) technology. In January, the U.S. Department of Defense (DOD) announced it will purchase 500 V2G-capable vehicles this year through a $20 million investment. Additionally, last month, PJM Interconnection and NRG Energy successfully tested a fleet of V2G-enabled Mini-E’s. The Mini-E’s accrued an average of $5 per day by participating in PJM’s frequency regulation market.
The DOD’s order is significant not only because of its size, but also because the Pentagon plans to make money on the program. Often, government programs for clean technology investments are based on environmental objectives (reducing greenhouse gas emissions) or national security concerns (reducing consumption of foreign oil), rather than achieving a net positive financial return. In this case, the program’s financial goal is explicit: the Pentagon is making a business decision to invest in V2G.
V2G’s profitability has much to do with Federal Energy Regulatory Commission (FERC) Order 755, issued in late 2011. The order mandates that energy generation assets participating in frequency regulation markets managed by independent service operators (ISOs) and regional transmission operators (RTOs), such as PJM, must prioritize and compensate generation sources according to how quickly and accurately they are able to respond to the operator’s generation signal.
Advanced batteries in PEVs are one of the few generation assets that can respond quickly and accurately. This means that when PEV batteries are used for frequency regulation they can be compensated around 3 times more per kilowatt (kW) than slower, more traditional assets, like natural gas power plants. PJM was the first ISO or RTO to implement the rules. Additionally, PJM reduced the minimum power capacity generation assets must produce to participate in its frequency regulation market to 100 kW.
The last point is pivotal, as it represents a major challenge to V2G development. Though PEVs store a substantial amount of energy, the power any single PEV can discharge or absorb from the grid is limited by the battery size, and by bi-directional electric vehicle charging infrastructure. Thus V2G-enabled PEVs must be aggregated to participate in ancillary service markets, as in the case with the NRG Energy/PJM trial. While 100 kW is substantially higher than most PEV batteries can discharge or absorb from the grid, the reduced minimum allows V2G proponents to participate with fewer vehicles, especially when using medium duty PEVs that typically have higher power and energy storage capabilities than light duty vehicles.
The military has a large fleet of non-tactical, medium duty vehicles, such as refuse trucks, maintenance vehicles, and buses, at bases around the country. Many of these vehicles are largely sedentary and can be connected to the grid for more hours than most vehicles in commercial fleets, making V2G a better fit for the DOD than for many private sector fleets, at least so far. The DOD’s use of this technology will advance it considerably, laying the foundation for software and infrastructure developers to make this technology a possibility for greater numbers of private fleets – and making PEVs much more attractive.
Tags: Electric Vehicles, Energy Storage, EV Charging, Smart Grid Security, Smart Transportation Program
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