Navigant Research Blog

Tackling the 2 in V2G

— January 16, 2018

EV adoption is speeding up around the world, and while electrification offers emissions reductions and other benefits, it creates new challenges and opportunities for grid operators. Navigant Research expects that EVs will make up 5% of the global market for personal vehicles by 2024, and that collective charging requirements will add 160 GW of demand to electricity systems as owners switch from filling up to plugging in.

Vehicle-to-grid (V2G) technologies seem an obvious and low cost alternative to ramping up generation in the face of new demand from EVs. Why not use EV batteries to shift and shave demand peaks during the 95% of the time they sit unused? But making V2G a reality requires significant infrastructure and software developments, and EV owners must also consent to allowing grid operators access to batteries for flexibility services.

Integrating EVs Requires New Technology

If EV batteries are to be called upon for V2G, they first need a physical connection to the grid that supports two-way charging infrastructure, which are not yet widely available. However, major automakers like Honda are already developing two-way charging stations with V2G in mind, and deployment is likely to increase as more EVs hit the road.

Once two-way charging infrastructure is in place, the vehicle-station pair needs a software solution for monitoring grid signals and managing power flows. IBM and TenneT are collaborating with sonnen and Vanderbron to pilot a blockchain-based V2G platform that can adapt to conditions on the grid, such as congestion or oversupply of wind power. The blockchain records the locations and identities of devices involved, exchange volume, and other details as a secure and verifiable basis for settlement with the EV owner.

Consumers Need to Be Compensated for V2G Risks and Services

Technology is only half of the equation—EV owners also need to participate. Owners that participate in V2G take on the risks of doing so, and should expect to be compensated for providing flexibility, services, and for potential wear and tear of the vehicle’s battery (though there are conflicting views on this). Owners will also require guarantees that integrating will not cost drivers the use of their vehicle in emergencies or other situations.

In the short term, compensation might provide enough incentive for owners to adopt V2G. One study estimated the value of flexibility services from £600 to £8,000 ($800 to $10,800) of income each year for vehicle owners. Whether the income is a sufficient counter to real or perceived risks will likely vary with a customer’s individual situation, which constrains the potential of V2G.

The Rise of Mobility as a Service (MaaS) Could Help Maximize V2G Potential

Evolving vehicle ownership models could have a huge effect on V2G. In a world where consumers access on-demand fleets of EVs owned and operated by an MaaS provider rather than owning vehicles, many barriers to V2G adoption disappear.

Since demand for MaaS vehicles is likely to be cyclical, with lower demand during midday when grid congestion demand is higher, a portion of the fleet can be parked and plugged in to act as a buffer for the grid. Utilities and grid operators could partner with fleet owners to ensure that some fraction of the electrified fleet is grid-connected at any given time, providing the grid with a reliable pool of flexible resources in exchange for a new source of revenue. The service provider pools customer demand, and any effects on vehicle battery performance become a straightforward business cost.

As is often the case, the challenge is getting from here to there. Navigant Research can help—check out our latest report on the future of MaaS.

 

India Gears Up for EVs

— January 9, 2018

In 2017, governing officials announced that India plans to sell only electric cars by 2030. The announcement was part of larger climate goals put in place by the country under the Paris Agreement—goals which the country is currently projected to meet despite being the third-largest polluting country on the planet and home to over 1.3 billion people. Some speculation of whether this market shift is possible in the allotted time period has surrounded the announcement, but banning the sale of conventional, gas, and diesel-fueled vehicles has become more popular in recent months, especially across Europe with France and the UK announcing bans by 2040. With some of the world’s most polluted cities, meeting its all-electric sales goal will help India reduce emissions and meet climate goals.

Steps to Promoting EVs

Since India’s announcement of EV-only sales by 2030, several steps to increase adoption have occurred throughout the country:

  • Partnerships will allow for collaboration on EV and mobility technology as follow:

Toyota and Suzuki announced in November 2017 that they will co-deploy EVs for the Indian market beginning 2020.

Mahindra and Renesas have partnered to place Renesas as the technology partner of the Mahindra Racing Formula E team. The technology will be used to produce electric road cars as well.

Ola will partner with Tata Motors to add EVs to Ola’s cab fleet in Delhi.

Uber has inked a collaboration with Mahindra to pilot EVs in Delhi and Hyderabad by March 2018. The two will also collaborate with other stakeholders to set up public charging stations in major cities around India.

Tata Motors announced a partnership with Jayem Auto to launch the Nano EV under the name Jayem Neo.

  • New market entrants will allow for increased adoption rates.

Hyundai Ioniq plug-in hybrid will be released in India in 2018.

Honda’s Indian subsidiary is in the process of adopting an EV strategy that allows for affordable vehicles suitable for Indian roads.

– Suzuki, with its partnership with Toyota discussed above, will produce EVs for the Indian market with technical support from Toyota.

  • Government policy announcements promoting adoption and awareness of EVs are now occurring routinely.

– The government introduced smart chargers for EVs in December, with a plan to install 150 of the charging stations in the next 12 to 18 months.

The Maharashtra government is finalizing purchasing EV incentives for manufacturers and consumers—additionally, the national government is reportedly in talks to release purchasing incentives.

– The national government approved standards for EV charging stations via suggestions from the Committee for Standardization of the Protocol for Charging Infrastructure.

– The national government approved use of digital payments for charging of EVs.

Challenges Remain

The actions put forth to increase adoption and awareness of EVs in the Indian market are encouraging, but challenges remain for such a large market, leading to more doubts that the country will be able to reach its 2030 goal. Since charging infrastructure is crucial to adoption, the country will need to rapidly continue expansion of charging station installation, particularly in densely packed cities. Over 90% of EVs sold in India in 2016 were two-wheel vehicles, meaning OEMs will need to tailor model availability to this more popular market segment in India, in addition to four-wheel EVs. Finally, purchase incentives from differing levels of government could spur adoption by making vehicles more affordable in a country which ranked 150th globally in gross national income per capita in 2015.

 

Could On-Demand Mobility Finally Pave the Way for Vehicle-to-Grid Integration?

— September 27, 2016

EV RefuelingA decade ago, when discussion of modern plug-in electric vehicles (PEVs) was just getting ramped up again, one of the big potential selling points was the concept of vehicle-to-grid (V2G) integration. For a variety of reasons, it never quite caught on. However, as automakers, suppliers, and a variety of service providers have made a flurry of announcements about deploying autonomous vehicles into ride-hailing services in recent weeks, the time may also have arrived for V2G.

The idea behind V2G was to enable two-way communications and power delivery between PEVs and charging outlets. In addition to electricity flowing into the vehicles’ batteries to enable mobility, PEVs could also provide power back to the grid when needed to cover peak demand loads. A number of automakers have worked with utilities over the years to test out the concept, including Ford. When the automaker built a fleet of 20 prototype Escape plug-in hybrids for field testing in 2008, the cars were loaned out mostly to utilities to evaluate V2G.

Benefits of V2G

For customers, potential benefits of participating in a V2G system include possible rebates for contributing power back to the grid or discounts on charging during off-peak times. Utilities using V2G would have access to a buffer of power during load spikes that would reduce the need to build out extra generating capacity.

Unfortunately, sales of PEVs have turned out to be far lower than many projected a decade ago, with fewer than 120,000 sold in 2015. At the same time, there are more than 3,300 electric utilities in the United States, all with different (and incompatible) systems. With relatively few PEV owners, many with low-range battery EVs, there wasn’t a huge demand for V2G from consumers concerned about being left with insufficient range when they needed their vehicles.

Enter the era of autonomous on-demand mobility (AMOD). Navigant Research’s Transportation Outlook: 2025-2050 report projects that as the world becomes increasingly urbanized and crowded in the next 3 decades, there will be a push toward AMOD to solve the combined problems of air quality, safety, and urban congestion. Most if not all of the autonomous vehicles used to provide these services are also expected to be electric.

New Business Models

Large fleets of more standardized EVs should ease some of the technical issues involved with V2G and could provide the critical mass of fleet size needed to make the investment worthwhile for both utilities and fleet operators. By taking individual owners out of the equation, the fleet management system could cycle some percentage of these autonomous vehicles through V2G-enabled charging stations during the peak hours of electricity demand to provide the needed buffer.

In a world of dramatically reduced retail vehicle sales and the possibility of automakers running these mobility services, such a scheme could also be beneficial to today’s auto dealers. Those dealers could turn their focus to providing maintenance services for fleets, and while vehicles are onsite, they could participate in the V2G system. If utilities were to share part of the savings from not having to expand generation capacity with these mobility and service providers, it would contribute to a new revenue model. As the transportation ecosystem transforms in the coming decades, everyone in the supply chain will need to look at innovative approaches to building a sustainable business.

 

Japanese Automakers Harness PEV Power

— February 2, 2015

Plug-in electric vehicles (PEVs) may provide far more value to their owners than just reducing gasoline costs and greenhouse gas emissions.  The significant energy and power capacities of the PEV system can be utilized to provide power during a blackout, curb commercial electricity ratepayer demand charges, power offboard equipment at work sites, and help grid operators balance supply with demand.  Each of the above uses requires, or is strengthened by, PEVs equipped with bidirectional capability – meaning the vehicle can both absorb electricity from the grid and return it.  Most PEVs available today, however, lack this capability.

This is because automakers don’t yet see a market for vehicle-to-grid integration, and they’re concerned that the use of vehicle batteries for purposes outside of motive power may shorten the batteries’ lives.  Test pilots in major PEV markets are answering some of these concerns, as well as developing the processes by which a PEV’s bidirectional potential may be harnessed.  The center of action is in Japan.

New Models

In Japan, the Nissan LEAF, Mitsubishi i-MiEV, and Mitsubishi Outlander PHEV are all sold with bidirectional capability as an option.  Each model can connect to an offboard inverter through the vehicle’s direct current (DC) charging port to enable a reverse power flow.  The offboard equipment only enables the PEV to supply power back to an owner’s home in the case of an outage, not back to the grid under normal circumstances.  Its purchase is subsidized by the Japanese government.

Though the system’s use is limited to emergency outage situations, this relatively early adoption of the technology in comparison to other large PEV markets is providing a launch point for testing other PEV power possibilities.  Nissan has already begun testing a fleet of LEAFs in curtailing commercial demand charges at one of the company’s facilities through the LEAF to Home system.  Similarly, the LEAF to Home system is also undergoing tests in grid balancing services.   A number of similar tests are underway in the United States and Europe as well; however, no vehicles have yet been made available to the mass market with bidirectional capability as they have been in Japan.

Two Ways Are Best

To date, using PEVs in grid balancing services represents the most interesting case from a revenue-generating perspective.  Though a PEV does not necessarily need to be bidirectional to service the grid, the revenue potential of a bidirectional PEV in grid services is significantly higher in comparison to that of a unidirectional PEV.  Tests and simulations in the United States indicate that the revenue potential of one bidirectional PEV can average around $5 per day of grid service.

This revenue potential provides a significant new incentive for PEV adoption.  However, it’s unlikely such a scenario will emerge unless energy companies and utilities pave the way for PEVs in grid services and automakers outside Japan offer bidirectional PEVs.  Please join Navigant Research’s webinar, Electric Vehicles and the Grid, at 2 p.m. EST on February 10 as we examine in detail the market drivers and challenges of using PEVs in grid services.  Click here to register.

 

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