The integration of e-mobility and energy sector is the hottest topic in the electric vehicle market. Vehicle-to-grid technology has the potential to change the whole energy landscape. And this will happen in the next couple of years, argues Ville Väre, the Energy Sales Director from Virta.
What comes to mind when you think of energy production? A big power plant with a smoking chimney perhaps? But as you know, the energy production is in the middle of a huge transition: we are moving from centralized to distributed small scale production and consumption.
In Europe, already 40 percent of the electricity is generated with renewable energy sources (hydro, biomass, wind and solar). In many European countries such as Sweden, Finland and Latvia the figure is much bigger. This transition towards renewable based electricity production means that the energy system needs to change radically. Renewables are causing volatility to the energy system. They need flexibility & demand response elements to keep the system stable, reliable and reasonably priced.
Smart is the answer
The are already several flexibility & demand response solutions available for different layers and actors in the energy system. The most important new source of flexibility are the electric vehicles (EVs). Ultimately EVs are big batteries on wheels. They connect sustainable transportation and energy into an embedded ecosystem.
According to the estimates, by 2030, the global electric vehicle stock (excluding two/three-wheelers) will reach 140-245 million vehicles. There is a leap in the availability of new, affordable EV models in 2020-2021 and the price parity between EVs and traditional, internal combustion engine cars is closed within next 5 years. At the same time, the CO2 emission reduction targets are tightening around the world, accelerating the growth even more. This all means that the demand for EV charging will increase exponentially.
How can your local grid and electrical system handle this? You can install a couple of charging stations without problems. But as the charging demand grows and you need to install 20 more, the situation is different. This is why smart cloud-based charging infrastructure is a must have.
Smart EV charging or intelligent charging refers to a system where an electric vehicle and a charging device share a data connection, and the charging device shares a data connection with a charging operator.
As opposed to un-managed (or basic) charging devices that aren’t connected to the cloud, smart charging allows the charging station owner to monitor, manage, and restrict the use of their devices remotely to optimize energy consumption.
What is the difference between smart charging and V2G?
To put it shortly: Smart charging is a mere demand response solution whereas V2G turns your vehicle into a battery. Vehicle-to-Grid (V2G) means communication between vehicles and the energy grid.
With V2G technology, electricity can be taken from the car battery and pushed back into the grid. V2G and vehicle-to-X (for example vehicle to home, vehicle to building) are basically the same technology. The key word is bi-directional. V2G technology enables electric vehicles to be used as part of the energy system, side-by-side with stationary energy storages and renewable energy production.
Let’s compare the two systems:
With smart charging you are able to have 100 kW power in your control with 80 EVs.
With V2G technology you only need 20 EVs and much less charging stations to have the same amount of power in your hands.
Depending on your area, this means that you can earn over 600 euros a year of revenue in electricity balancing or reserve markets with V2G. On top of that you are able to save grid costs and optimize the maximum load. And with a dynamic electricity contract you can save even more.
V2G is beneficial for other players in the energy system, too. Energy companies can optimize their full portfolio with a really fast controllable solution. A recent study concluded that connecting EVs to the grid could cut £230m a year off the cost of running the power system in the UK alone by 2030.
5-billion-dollar market by 2024
The demand response markets in Europe are growing over 20 percent growth rate. The V2G is one of the most promising tools in the demand response markets. No wonder then that the V2G market is projected to grow to over $ 5 billion between 2020-2024.
At the moment we are the brink of the V2G boom. There are almost 100 V2G projects ongoing globally and the amount is growing rapidly. Virta is one of the V2G pioneers. We started our V2G journey already in 2017 by offering the first public V2G charger in Helsinki. In the last few years Virta has started to offer full value chain projects and provide EVs and EV batteries to reserve markets.
Today Virta is world’s leading vehicle to grid technology provider.
One example is the eFuture project where Virta has enabled Nissan to kickstart vehicle-to-grid (V2G) electric vehicle charging together with E.ON. Virta provided a digital EV charging platform for E.ON that will automate charging and energy export in line with signals such as grid demand, energy prices and the carbon intensity of the energy mix. During the project, vehicles will be connected to the chargers at intervals designed to replicate corporate fleet schedules – mainly overnight, but also for chunks of time during the day.
New European standard changes the game
At the moment the V2G is still project based business, but this is all about to change. V2G will soon become commercially profitable business. The new European ISO 15118-20 standard will be released at the end of 2020. New standard will accelerate the V2G market because it enables bidirectional power transfer for multiple cars. In practice this means that EV battery capacity for energy management will grow heavily in the next couple of years., For example European car manufactures will implement the bidirectional charging. This will be peak battery capacity for the European electricity system.
We are standing on the doorstep of a big change. Now is the time to jump to the market.