‘Batteries on wheels’ can cut peak power demand, put money in customers’ pockets

This article was published by The Energy Mix on Feb. 15, 2024.

“Smart”, bidirectional charging can make or break the case for speeding up electric vehicle deployment by cutting peak demand for electricity and putting money in customers’ pockets, but only with the right policies in place, the EU’s Regulatory Assistance Project concludes in a policy brief issued late last year.

“The continuing electrification of the vehicle fleet offers unprecedented opportunities to deploy these batteries-on-wheels not only for transport and mobility, but also to provide energy services,” writes [pdf] Netherlands-based senior advisor Jaap Burger in the nine-page brief. “This would reduce the need for expensive peak power solutions and could help integrate additional, and cheaper, renewable energy while providing financial benefits to consumers.”

But the design of the system will determine how well a bidirectional charging system works in practice. “Smart charging already provides systemic benefits, but bidirectional charging and V2G services will maximize them for users (through savings and rewards) and all stakeholders active in the energy system,” Burger says. “By building trust, guaranteeing that price signals reflect system needs, and ensuring that distributed resources are on a level playing field with traditional power system resources, barriers can be effectively removed so that EV batteries can play a significant role in the European power system.”

Electric vehicles can be charged at any time of day, but the policy brief points out that their impact on the wider electricity system depends on how those choices are made. “if charged at times of high renewables production and low electricity demand, the charging contributes to a more efficient energy system,” Burger explains. “Conversely, by not matching charging to available supply or capacity, it creates additional demand for expensive peak capacity expansion.”

With smart charging, “vehicle users turn a necessity (charging energy for propulsion) into an advantage,” incurring lower costs to top up their batteries while helping the grid integrate more renewable electricity. Bidirectional or vehicle-to-grid (V2G) technology takes all those benefits one step further, enabling EVs to act as a recognized power source for a building or the grid.

But to tap into those advantages, grid operators and potential V2G providers face a series of technical, market, and regulatory barriers that they often hold in common with other distributed energy resources like heat pumps, rooftop solar, and home batteries, Burger says. Those rules and barriers vary across European countries, just as they do across North American jurisdictions.

The paper calls for rapid adoption of supportive policies, including uniform codes that allow systems to operate across borders. The three system principles—trust, pricing, and fairness—are what it will take for those policies to deliver, RAP says.

While EV deployment is just beginning to hit the mainstream, Burger stresses that the opportunity to embrace bidirectional charging is with us now. “Hundreds of thousands of vehicles suitable for bidirectional charging have already entered the European market in the past decade,” he writes. “Being able to use that car for energy services is attractive” for owners, and “the size of this fleet would make it a welcome asset for the energy system.”