Vehicle-to-Grid (V2G) Technology: EVs as a New Source of Power for Utilities
Electric vehicles (EVs) were introduced more than 150 years ago — the first electric car was developed in the 1830s. However, with the dominance of the internal combustion engine, EVs lost their prominence by the 1930s and became all but extinct.
Over the past few decades, EVs have been steadily gaining traction and are currently on top of most auto majors’ list of vehicles. Global plug-in vehicles sales have continued to register impressive figures, with a 68% jump in 2015 and a 42% rise in 2016, attaining a sales figure of 773,600 vehicles in 2016.
Although growth in the global EV market is a sign of reducing pollution levels and foreign currency outflow owing to oil imports, large scale deployment of these vehicles could lead to power grids being unstable. So, some questions utilities are asking are if the large scale deployment of EVs could destabilize their systems or if EVs on roads could provide any potential benefit for utilities other than creating demand.
Although EVs pose a challenge to utilities, they present them with opportunities as well. One such opportunity can be seen in the Vehicle-to-Grid (V2G) technology, which has the potential to convert EVs into a new source of power for utilities.
As the name suggests, the V2G technology enables a plug-in EV to connect to a utility grid, allowing the EV to sell power and gain revenue or be powered by the grid.
During off-peak hours, EVs can draw power from the grid to charge their batteries. However, during peak hours, the energy stored in the batteries can be fed back to the grid.
Enel and Nissan are currently active in the V2G space. In May 2016, Enel and Nissan launched their first-ever V2G project in the UK on a trial basis (comprising 100 V2G units). In August 2016, Enel and Nissan, along with California-based company Nuvve (a leading V2G services provider), launched the world’s first fully commercial V2G hub in Denmark.
Benefits of V2G technology and its impact on utilities
- Meeting peak energy demand: The simultaneous charging of EVs during peak hours can lead to a sudden rise in demand for power, thereby, increasing the load at the distribution-feeder level.However, EV owners can discharge their batteries/supply power during peak hours and earn revenue.
- Avoiding capacity investments: EVs’ ability to draw power/charge during off-peak hours can help utilities avoid investing in the augmentation of grid capacity to meet the higher peak load.
- Integrating Distributed Energy Resources (DER) systems: The integration of a DER system, which includes renewable energy generation and demand response devices, and EVs (as a mobile energy resource), into a single smart automated system would allow utilities to control the DER system more efficiently. It would also enable it to have a huge, growing baseload source of power whenever needed.
Therefore, V2G technology can help EVs become a potential power source for utilities without the need for them to invest in augmenting their capacities.
Acuity Knowledge Partners has been assisting energy and utility firms with regulatory and impact analysis, M&A strategy, competitor intelligence, and growth strategy. We can help V2G firms understand the impact of regulatory and technological developments and identify opportunities arising from these developments, thereby acting as a differentiator for them.
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