1. What is V2G?
V2G stands for “vehicle-to-grid” and is a technology that enables energy to be pushed back to the power grid from the battery of an electric car. With vehicle-to-grid technology, a car battery can be charged and discharged based on different signals — such as energy production or consumption nearby.
In a nutshell, the idea behind vehicle-to-grid is similar to regular smart charging. Smart charging, also known as V1G charging, enables us to control the charging of electric cars in a way that allows the charging power to be increased and decreased when needed. Vehicle-to-grid goes one step further, and enables the charged power to also be momentarily pushed back to the grid from car batteries to balance variations in energy production and consumption.
2. Why should you care about V2G?
Long story short, vehicle-to-grid helps mitigate climate change by allowing our energy system to balance more and more renewable energy. However, to succeed in tackling the climate crisis, three things need to happen in the energy and mobility sectors: Decarbonisation, energy efficiency, and electrification.
In the context of energy production, decarbonisation refers to the deployment of renewable energy sources, such as solar and wind power. This introduces the problem of storing energy. While fossil fuels can be seen as a form of energy storage as they release energy when burned, wind and solar power function differently. Energy should be either used where it’s produced or stored somewhere for later usage. Therefore, the growth of renewables inevitably makes our energy system more volatile, requiring new ways to balance and store energy to be used.
Simultaneously, the transportation sector is doing its fair share of carbon reduction and as notable proof of that, the number of electric vehicles is increasing steadily. Electric vehicle batteries are by far the most cost-efficient form of energy storage, since they require no additional investments on hardware.
The yearly sales of EVs is expected to reach over 20 million before 2030, which means that we’ll have over 100 million tiny energy storages on wheels with an aggregated storage capacity of
Vehicle-to-grid technology enables us to make the best use of the existing population of vehicles.
Virta’s vision about vehicle-to-grid solutions
Stationary energy storages — big power banks in a sense — are becoming more common. They are a handy way of storing energy from, for instance, large solar power plants. For example, Tesla and Nissan offer home batteries also for consumers. These home batteries, together with solar panels and home EV charging stations, are a great way to balance out energy production and consumption in detached houses or small communities. Currently, one of the most common forms of storage are pump stations, where water is pumped up and down to store energy. On a larger scale, and compared to electric vehicles, these energy storages are more expensive to supply and require significant investments. As the number of EVs is continuously rising, electric cars provide a storage option with no extra costs.
At Virta, we believe that electric cars are simply the smartest way to help with renewable energy production, as EVs will be part of our lives in the future — regardless of the ways we choose to use them.
3. How does vehicle-to-grid work?
When it comes to using V2G in practice, the most important thing is to make sure that EV drivers have enough energy in their car batteries when they need it. When they’re leaving for work in the morning, the car battery must be full enough to drive them to work and back if needed. This is the basic requirement of V2G and any other charging technology: The EV driver must be able to communicate when they want to unplug the car and how full the battery should be at that time.
With Virta’s V2G solution, the car battery is always charged to 70-90% when the driver needs to go.
When using smart charging, the possibility of balancing the grid ends when the battery is fully charged. With V2G, the grid balancing can continue for all the time the vehicle is plugged in.
A practical example
Firstly, let’s go through the very basics of how electricity behaves in the grid — it always takes the shortest possible way to the nearest location where it’s needed. A vehicle-to-grid charging device absorbs electricity from the car battery and simply just pushes it back to the grid, where it continues its journey to the nearest location where it’s needed.
At Virta Headquarters, we currently currently have two V2G charging stations in use. These stations are located in the office building garage, next to regular, publicly available smart charging points. When the V2G station is discharging, the electricity here at Virta HQ transfers directly to the nearby car batteries charging at the regular stations — they are the nearest locations where the demand for electricity is continuous. If no cars are being charged, the discharged electricity will be used on garage lighting or air conditioning. This reduces the total energy consumption of the building, which balances the energy system around our office.
Let us take you on a virtual tour at Virta HQ to test our V2G charging solution:
4. The benefits of vehicle-to-grid
For real estate
When installing a charging device, step number one is to review the electrical system of the building. The electrical connection can become a hindrance to the EV charging installation project or increase costs significantly in case the connection needs to be upgraded.
Vehicle-to-grid, as well as other smart energy management features, helps enable electric vehicle charging anywhere, regardless of the surroundings, location, or premise. The benefits of V2G for buildings are visible when the electricity from car batteries is used where it is needed the most (as described in the previous chapter). Vehicle-to-grid helps balance out electricity demand and avoid any unnecessary costs for building an electricity system. With V2G, the momentary electricity consumption spikes in the building can be balanced with the help of electric cars and no extra energy needs to be consumed from the grid.
For the power grid
Buildings’ ability to balance their electricity demand with V2G charging stations also helps out the power grid on a larger scale. This will come in handy when the amount of renewable energy in the grid, produced with wind and solar, increases. Without vehicle-to-grid technology, energy has to be bought from reserve power plants, which increases electricity prices during peak hours, since striking up these extra power plants is a pricey procedure. V2G enables energy companies to play ping pong with electricity in the grid.
Why would consumers take part in vehicle-to-grid as a demand response then? As we explained earlier, it does no harm to them, but does it any good either?
Since vehicle-to-grid solutions are expected to become a financially beneficial feature for energy companies, they have a clear incentive to encourage consumers to take part. After all, the technology, devices, and vehicles compatible with the V2G technology are not enough – consumers need to take part, plug in and enable their car batteries to be used for V2G. We can expect that in the future, consumers are being rewarded if they are willing to enable their car batteries to be used as balancing elements.
5. How will vehicle-to-grid become mainstream?
V2G solutions are ready to hit the market and start doing their magic. Yet, some hurdles need to be overcome before V2G becomes the mainstream energy management tool.
A. V2G technology and devices
Multiple hardware providers have developed device models compatible with vehicle-to-grid technology. Just like any other charging devices, V2G chargers already come in many shapes and sizes.
Usually, the maximum charging power is around 10 kW — just enough for home or workplace charging. Vehicle-to-grid charging devices are DC chargers, since this way the cars own unidirectional on-board chargers can be bypassed.
To wrap up, devices exist and are feasible, yet there's still room for improvement as the technology matures.
B. V2G compatible vehicles
Currently, Nissan has outpaced other car manufacturers by bringing V2G compatible car models to the market. All Nissan Leafs on the market can be discharged with vehicle-to-grid stations. The ability to support V2G is a real thing for vehicles and many other manufacturers will hopefully join the club of vehicle-to-grid compatibles soon. For instance, Mitsubishi has also announced plans to commercialize V2G with Outlander PHEV.
Does V2G affect car battery life?
C. Cooperation: Car manufacturers and the energy sector must step in
Vehicle-to-grid is only one (but very impactful) example of the energy management possibilities that EVs offer us for the future. The thing is that energy and mobility sectors will converge in the future, with or without V2G. We believe that it is with.
However, big wheels turn slowly and there is some resistance to change. Nissan is showing a great example to other car manufacturers to start cooperating with the energy sector in order to develop something new and life-changing, and to look boldly into the future. The car industry is going through a revolution like never before. Combining forces with the energy sector offers the car industry a chance to begin a new heyday.
The same goes for the energy sector: As energy efficiency increases and more renewables step in, the ongoing change will be drastic for the electrical grid. The energy sector must find new ways to balance energy production and consumption. Luckily, EVs are ready to lend a hand.
Once-in-a-lifetime opportunity for utilities
The first V2G projects are running and vehicle-to-grid solutions have been implemented. V2G will become a vital solution first in locations where the energy system is the most volatile. The most important thing, despite the location, is that the installed charging devices are smart – otherwise all of the smart energy management features will be inaccessible.
When V2G has been implemented extensively enough, EVs can also support the grid in a state of emergency. If extreme weather conditions cause breaks in electricity, electric vehicles can maintain power for basic needs until the problem is fixed. This will make the electricity system less vulnerable and less dependent on external conditions.
Now we just need all the players to start making the most of the largest and cheapest energy storage that we have — electric vehicles.
6. Additional resources
Webinar: 5 Things you need to know before starting your V2G business
In this webinar we'll cover the V2G value chain and technological requirements, trends and use cases, new business opportunities, and end with a Q&A session.
Virta: Building a future-proof business idea
Check out 3 reasons that explain why EV charging is a future-proof business idea in the energy sector.
Deloitte Insights: Powering the future of mobility
Electric vehicles do so much more than move people around – they can play a significant role in supporting power companies. Learn more about the potential new role of utilities.
Accenture Strategy: Driving growth with plug-in electric vehicles
PEVs offer a great opportunity for utilities to strengthen their position in the evolving energy ecosystem. Don’t be left in the passenger seat.
IEA: Global EV Outlook 2019
Dive into the world of electric mobility: This is the guide to learn about electric vehicles and the current state of the ongoing transformation towards a more sustainable future of transportation.
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