Vehicle-to-Grid Concept

The Vehicle-to-Grid Concept

How Electric Drive Vehicles Can Generate Value
Through Connection to the Power Grid

Presented at the ESD Environmental Vehicles Conference
June 11, 2001, Southfield, Michigan

AC Propulsion has developed an integrated drive system for electrically-propelled vehicles. The integrated system uses the power switches and motor windings for both propulsion and to provide a bi-directional high-power interface to the electric power grid.

In addition to operating as a battery charger to convert AC grid power to DC, the system can operate in reverse to convert DC from the vehicle (from a battery, generator, or fuel cell) to AC at the grid frequency. The AC from the vehicle can power stand-alone loads, and, with a robust safety shut-off to protect against back-feeding the grid when it is down, it can feed power to the grid. This potential for vehicle-to-grid power (V2G) adds new technological, economic, and environmental implications to the concept of distributed generation of electricity.

The Scope of V2G

As cars and light trucks begin a transition to electric propulsion, powered by batteries, engines, or fuel cells, there is potential for a synergistic connection between such vehicles and the electric power grid. The aggregate power rating of the US vehicle fleet is much larger than the total US electric generating capacity. If even a small fraction of vehicles are harnessed as generating assets, benefits would accrue both to the electric power grid, vehicle owners, and aggregator/service providers. The potential exists for the economic value generated to significantly offset the costs of electric, hybrid, and fuel cell vehicles and to bring a new source of economic returns to vehicle manufacturers.

US passenger vehicles are, on average, parked and idle for about 23 hours each day. During this time, they represent an idle asset and actually create negative value due to parking costs. The advent of electric, hybrid, and fuel cell vehicles, introduces the prospect that parked vehicles can become assets that create value. By connecting such vehicles to the electric power grid, a large scale, dispatchable, electric power generating resource is created.

By itself, each vehicle is small in its impact on the power system. But, in aggregate, a large number of vehicles will represent significant generating capacity. For example, five percent of California's vehicle fleet could provide 10 percent of the state's peak power requirement. This geographically-dispersed capacity could be controlled remotely in order to provide power when and where it was needed. Power or energy from an electric vehicle could be sold from a vehicle connection point located at the vehicle driver's home or place of work. Such connected vehicles could provide a variety of services that have value to utilities and power grid operators.

Grid Regulation

Grid operators are must continuously match the generation of power to the consumption. In many power markets, this function, called regulation or automatic generation control (AGC), is unbundled from power generation, and is procured as an ancillary service. Grid regulation requires a power system that can ramp power up or down under real time control of the grid operator. Vehicles are well-suited to providing regulation due to their ability to respond rapidly to power commands, and because the net energy requirement for regulation usually nets out to zero. Because of this, even battery electric vehicles could perform regulation services on a continuous basis, without depleting the battery pack below a nominal level of 70 to 80 percent.

The graphic below shows how a vehicle that is primarily used for commuting to and from work can be put to work doing regulation for the time that it spends otherwise idle when parked at work or at home. The blue line shows the trace of battery power over the course of a day. The power is limited to plus or minus 7.6 kW when the vehicle is parked and performing regulation. Regulation and charging can be superimposed, as seen just after arriving at work (8:00 am) and when the off-peak rate period starts at 9:00 pm. The magenta line shows the variation in state of charge (in percent) during the day.

Spinning Reserves

Grid operators maintain reserve generating capacity available for immediate power production. The term 'spinning' derives from the definition that spinning reserves must have generators spinning and synchronized with the grid, ready for immediate power generation. The mass of spinning generators also contributes to grid stability. Vehicles could provide equally-fast power on demand, and could be programmed to appear to the grid as a virtual spinning masses, with the added benefit of little or no 'spinning' or idling losses.

For power generation from hybrid or fuel cell vehicles, a connection to low pressure natural gas or hydrogen (in addition to the electrical connection) could be made at compatible parking locations. Hybrid vehicles with internal combustion engines and state-of-the-art emissions systems show the potential for power generation at specific emissions levels far below that of small microturbines, and as good as the best new large powerplants.

Uninterruptible Power Source for Businesses and Homes

Parked vehicles can replace grid power during scheduled or unscheduled power outages. A business could achieve a significant UPS capability with electric or hybrid vehicles parked and plugged in during the day. This would reduce the risk and cost of a business selecting reduced-rate interruptible power service. Single vehicles could provide a full capability backup power source for homes.

The Economics of V2G

The economics of vehicle-to-grid power flow are complex but appear to be robust. The costs and values of grid support functions vary greatly by vehicle, time of year, time of day, region, and utility. In general though, the magnitude of value is more than enough to offset the costs of battery wear out, equipment wear and tear, energy losses, and other related costs.

Convergence Sharing Power Assets Creates Value

Despite environmental and customer benefits, commercialization of electrically-propelled vehicles has foundered because development costs and low production volumes make electrically-propelled vehicles expensive to produce, and because regulations such as the ZEV mandate have alienated auto manufacturers. There has been no market-based rationale for electric transportation.

The convergence of transportation, electric power, and communications technologies creates value based on the sharing of assets between the transportation and power generation sectors. The transportation asset the electrically-propelled car is used in a new and valuable way by the power industry. The value created by this new use can offset vehicle purchase and ownership costs over time, and create a new value stream to the V2G service aggregator. The car buyer can enjoy the desirable operating characteristics of electric propulsion without an economic penalty. This economic transfer from the power sector to vehicles creates a market-based rationale for electric propulsion a better product at a lower price. It could also invert the argument that electric vehicle costs are too high relative to their emissions benefits; a cost per ton of emissions benefit would be replaced by a negative cost value created per ton of emissions benefit.

Micro-transactions Capture V2G Value

Creating transactional systems to capture vehicle-to-grid value will become a fundamental element of the electric propulsion business. The propulsion system will provide motive power for the vehicle's primary function as transportation. The technology for feeding power from the vehicle to the grid is a feature that creates added value. Since every energy transaction can be recorded and valued, the way phone calls are today, the technology supplier for this beneficial feature may extract a fee in proportion its usage. This pay-for-use approach allows separating the value of the propulsion function from the value of the vehicle-to-grid function.

In this way, the propulsion system supplier can earn returns for proprietary technology while still selling to the auto industry at commodity prices. From the automaker standpoint, integrated V2G propulsion systems will be priced competitively even though they offer manufacturing and marketing advantages not available from conventional, non-V2G propulsion systems. Automakers that own their own V2G technology and/or become V2G service providers/aggregators have the potential to reap new life-of-the-vehicle income streams that could be much more valuable than the profits from the up-front sale of the vehicle.