Can V2G Connectivity Boost BEV Uptake?

The V2G business model appears to be something of a chicken-or-egg proposition for providers of the technology.

On the one hand, it can defray some of the costs of purchasing a BEV for fleets and individuals; on the other hand, the technology requires a large EV fleet to provide returns on investments for many of the stakeholders. A 2019 trial in Denmark by the V2G provider Nuvve found that a fleet of 10 Nissan e-NV200 electric vans carried out 100 hours of V2G over two years, selling 130,000kWh to the grid. That amounted to earnings of €1,860 ($2,001) a year. “Multiplied by a couple of million vehicles, you could be looking at a $20-70Bn industry by unlocking these resources,” Nuvve’s European project manager Paige Mullen told a V2G workshop in Nottingham.

Cost benefits also apply to individual EV owners. According to GlobeNewsWire, vehicle owners might earn $454, $394, or $318 per year, depending on the length of their average daily trip “and assuming sufficient governmental support”. In fact, governments have already begun supporting V2G. For example, in 2018 the UK, which says it is still committed to banning the sale of new ICE powered vehicles by 2030, provided some £30M ($38.82M) to 21 V2G projects, “to pay for research and design and development, with the aim of exploring and trialing both the technology itself and commercial opportunities”.

In addition, London has so far provided another £22M to support two phases of research on V2X, “to address barriers to enabling energy flexibility from bi-directional electric vehicle charging” and to support “small scale V2X bi-directional charging demonstrations”. The UK is also initiating long-term V2G programs to develop large-scale V2G trials, such as the PowerLoop consortium. This project will install 135 V2G chargers and, over the course of three years, collect data on cost reduction and grid support.

Local governments are also involved, especially those with a strong ‘green’ agenda, such as the US state of California. In the summer of 2022, the state instituted an Emergency Load Reduction Program, which pays $2 per kWh for V2G and announced a decision to allow submetering EV chargers, which is an important step towards building a V2G market.

Carmakers are also buying into the technology. Since March 2019, Renault has been working on a project in the eco-district of the Dutch city of Utrecht, where two Zoe V2G prototypes joined the existing fleet of self-service EVs. Renault is planning to roll out 13 more Zoes fitted with bi-directional chargers at various sites in Europe.

In 2020, Tesla reversed its V2G policy and began putting V2G technology into its Model 3, using an internal converter to make its design fully bi-directional. This means that the energy flowing from the car can use a standard Type 1 or Type 2 AC plug.

The incentive of earning money from the battery of one’s new EV will certainly sway some consumers to purchase an electric vehicle, especially if they had been put off by the price. However, there is another reason for the official interest in V2G: supporting the national grid when it is taxed by tens-of-millions of EVs.

According to Philip Nothard, insight and strategy director at Cox Automotive: “We [in theUK] are running a risk by relying on electricity.” He cited a report by AutoForecastSolutions that projected volumes for the battery vehicles of all carmakers and multiplied that demand on the grid. He asked: “You’d need 1,000kW an hour to serve it. Where is that electricity going to come from?” Currently there are some 36 million cars on UK roads, less than 10% of which are EVs. “And you still can’t pull into a charging station and be guaranteed that it works,” Nothard said. “What happens when this 36 million park becomes 90% battery electric, unless you have power coming into the grid to be on at all times? How do you do it?”

V2G could be part of the solution, especially if a large number of car owners and large fleets buy into the technology. Vehicles equipped with V2G technology can help fill an energy shortfall by halting their charging process, thereby reducing demand on the grid, and transferring power from the battery to the grid but it all depends on the continued uptake of BEVs.

In a filing with the Texas electric utility commission in which Tesla replied to questions about how electric utilities should approach electric vehicles, the company put the issue in a nutshell: “Vehicle to grid benefits can be recognized much more efficiently when EV deployment is at scale rather than in the early adopter phase. At the same time, any discussion regarding the capabilities of EV related technologies must recognize as a first principle that customer experience and willingness for participation is key.”