Driving on the electricity highway
It is estimated that one in every hundred cars sold today is powered by electricity. The yearly sales of electric vehicles (EVs), considering both battery (BEVs) and plug-in hybrid (PHEVs), in the EU has increased from roughly 700 vehicles in 2010 to 149,500 in 2015. Globally, the threshold of 1 million electric cars on the road was exceeded in 2015, finishing with 1.26 million at the end of the year. Considering the automotive industry at large, the numbers may seem insignificant, but the trend indicates that the penetration of electric vehicles will increase rapidly in the coming years.
The rising number of electric vehicles has led to some concerns regarding its impact on the electrical system. The system may be put at risk due to a significant growth in the electricity consumption and the increase in unpredictability of consumption patterns owing to vehicle charging. Nevertheless, with the use of smart Vehicle to Grid (V2G) solutions, electric vehicles could become a solution rather than a problem by contributing significantly in integrating intermittent renewables into the system and by providing ancillary services. Apart from the system level benefits, permitting EVs to participate in the electricity markets would present new revenue generation opportunities for vehicle owners. This in turn would further improve the business case for EVs by reducing overall costs.
EVs as an electricity market participant
The primary function of EVs is to provide a sustainable alternative for transportation. However, when these vehicles are idle or parked, they may be viewed as a distributed storage resource (similar to a stationary battery) that can be used to provide flexibility to the system. It has been demonstrated in literature that from a techno-economic perspective, electric vehicles are best suited for short-term power regulation and thus participating in ancillary markets could prove to be the most attractive option. The UK’s National Grid foresees that by 2030, electric vehicles and heat pumps could contribute up to 80% of the country’s frequency response requirements.
Examples of ongoing trials on market participation of EVs
Various trials are being carried out around the world to study the possibility of using EVs for grid services. The University of Delaware and Pennsylvania-New Jersey-Maryland (PJM) independent system operator have been studying the possibility of using EVs for providing grid services since 2007. The aim of the study is to evaluate the viability of using EVs for frequency regulation and as spinning reserves. According to media reports, as of 2014, the pilot project was able to earn roughly $110 per vehicle per month for providing these services to the grid.
In May 2016, Italian power company ENEL and Japanese car manufacturer Nissan announced plans of conducting V2G trials in the UK. The trial will consist of installing one hundred V2G units at various locations for Nissan LEAF and e-NV200 electric van. These units will provide owners of these vehicles the ability to provide grid services. Since August 2016, a similar project has been undertaken by ENEL in Denmark where, 10 vehicle-to-grid (V2G) units have been installed at the headquarters of the Danish utility Frederiksberg Forsyning.
Gazing into the crystal ball
The early results from pilot studies appear to be promising. However, it is important to err on the side of caution as several hurdles still exist. One such hurdle is that the technology (hardware and software) for enabling a truly seamless V2G experience for the user is still maturing. Another is that the usage pattern for EVs appears to be changing from a single user to a multi-user (shared) approach. It may be relatively easy to integrate an EV that is parked most of the time and which has a predictable usage pattern. However integrating a shared vehicle may be much more challenging. In the coming months, further results from pilot projects would reveal much. Nevertheless one thing is certain, EVs are here to stay and will be pivotal not only in redefining the transportation market but also the electricity market.
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