Definitions

There are quite some abbreviations that look similar, but vary in their application like V1G, V2H, V2B, V2L. So let's start with definitions.  

Vehicle to grid (V2G) is essentially the capability to discharge (car) batteries directly into the public electricity grid.  V1G is smart (grid conscious) charging, a functionality by the Charge Point Management System (CPMS) that can decrease the power input for charging. This can be done via either Load balancing (static or dynamic, guarding the accumulated power demand of charge stations do not exceed the grid connection), and dynamic smart charging that defers charging to offpeak times. More advanced solutions adjust charging profiles based on day-ahead pricing on energy markets.

Vehicle to home, Vehicle to Building and Vehicle to Load (connection to other appliances) are all V2G applications, but their application is behind the meter (not directly on the public grid).

Situation on the Dutch grid

The Dutch grid has been state of the art in terms of reliability and availability for a long time, and businesses and households are accustomed to a 99,9% availability. They pay a fixed price for their grid connection and (often fixed) price per kWh.

Dutch Sustainable energy generation via Wind and Solar is on track to meet the EU GreenDeal goals, and we are even world champion in rooftop solar generation. Government and municipalities push for further electrification of households and emission free zones in cities to accelerate electrification.

Combination of more volatile sustainable electricity generation with electrification of transport and households leads to grid congestion and more frequent imbalance in supply and demand, resulting in very high or negative mWh prices at peak demand or supply times on the energy flex market. 

Grid congestion issues are covered in the (Dutch) press on a daily basis: new wind parks, new housing estates and business areas and/or expansions have to wait months or even years to get connected or receive their upgrade. Furthermore, DSO's frequently switch off inverters of solar panels and EV charging sessions to prevent grid overload. 

The challenge

These issues have a negative impact on society and economic growth, since grid capacity can't be increased overnight. Implementation is estimated to take over a decade, and to facilitate the energy transition, a staggering investment of €8 billion per year is required from 2025 in the Netherlands alone. The challenge is enormous: between 80.000 and 105.000 km of cables need to be installed (source: Netbeheer Nederland). 

In addition to the already pressing problems, TSO Tennet and regional DSO's warn for increasing unanvailability of electricity due to the work executed on the grid in the coming years. So we need an intermediate solution to keep our lights on and businesses running during the next 5-10 years.

So what will happen? And is Vehicle to Grid THE solution to overcome these problems?

Multiple, complementary options

It is important to understand that current Grid congestion issues are time-bound - just like the highways, most of the day there are no traffic jams, only during early morning and late afternoon (or in case of an accident). 

V1G aka public grid concious (smart) charging has a significant untapped potential to decrease peak load. Peak shaving capabilities are already widely available - for example, most CPMS and chargers facilitate load balancing (prevent charger electricity demand exceeding the connection capacity) and dynamic smart charging to optimize charging sessions i.r.t. availability of electricity.  

V1G combined with dynamic energy tariffs will decrease a significant part of the current congestion issues by deferring charging to offpeak times; TotalEnergies and JedLix recently reported a realized Grid peakload reduction of 40% (Source: JedLix) on the TE installed base of chargepoints. And the potential is even larger when all EV's can deal with pausing charging sessions and restart later - at present, a continuous current of 6 Amps for many EV's to prevent them from disconnect.

Optimize self-usage of local generation

Broad introduction of flexible energy tariffs will further increase awareness and incentives for businesses and households to reduce electricity demand at peak times. Heavy users already receive incentives to pause their activity at peak times.

Businesses that require a high energy volumes for their operations actively invest in local (solar & wind) generation in combination with batteries, to become more independent of existing grid constraints. These local 'behind the meter' energy systems can provide valuable additional flexibility, with an Energy Management System (EMS) optimizing self-consumption of on-site generated electricity to a maximum, and supplying energy back to the grid at peak times. Vehicle to Home and Vehicle to Business (@work charging and depot charging for Light duty vehicles, e-trucks & e-buses) are examples of thse behind the meter solutions. 

The Electric Vehicle base is expected to grow from 10 to 36 Million by 2030 in Europe (source: PwC), with Germany accounting for 10M EV's - this is a huge potential virtual power plant of decentral batteries than can be used for storage in case of excess wind/solar generation and discharge when demand exceeds supply. 

Vehicle to grid, discharging into the grid at public charging stations is an addition to the solutions above. 

Promising, but not available at the scale that is needed to make a serious impact during the next few years. 

ISO 15118/20 (the protocol that supports V2G)  is only at the start to be implemented; very few EV brands and models support V2G just yet, and chargepoint backends (CPMS) need to invest in enabling V2G - and they will start implementation when their CPO customers are actively asking for it (chicken & egg). 

Furthermore, it is questionable if individual EVs connected to public chargers provide enough flexibility via discharging during peak times (this is when they usually are connected and need to be charged).

The Municipality of Utrecht thinks it is, and is working with car share company MyWheels and WeDriveSolar to extend their electric fleet that is just connected via V2G. V2G is a new business model for car sharing companies to earn additional money with discharging at peaktimes when their cars are not occupied and connected to their (public) chargepoints.

Demand-side steering incentives are not persuasive enough yet for end-users; dynamic energy tariff contracts are already being offered by a few energy suppliers, with discounts only covering a small part of their expected gains in energy trading optimization. This dynamic pricing exludes transport tariffs by Dutch DSO's, while they benefit most from demand side steering. 

Furthermore, discharging EV/stationary batteries into the grid and recharging afterwards faces battery owners and EV drivers with double taxation for electricity consumption - since they are not recognized as parties feeding into the grid (even if this results in net-zero consumption). Individual feed-in by solar converters and batteries therefore needs EU wide harmonized RFG net codes (in progress by the EU DSO expert group).

Demand side steering is behavioral change management effort

At present, grid balancing is a centralized game, mainly concentrated on the supply side. So called 'aggregators' act as Balancing Service Providers - they use the flexibility in the (aggregated) assets of their customers (like combined heat and power (CHP), heat pumps, EV's, etc.) to help balance the grid - and earn money as energy traders with this on the energy imbalance markets.

But focus on demand-side management, with proper (price and tax) incentives, is still in it's infancy and largely untapped in the Netherlands. Solving the discrepancy of supply and demand at the core seems much more effective and efficient. But both businesses and households have never been involved, since they pay a fixed price for their grid connection and price per kWh, no matter when they use electricity. So this is mostly a challenge in behavioral change, currently with lacking incentives. 

Decentralized energy system 

The energy system needs radical change to enable the energy transition. This requires an end-to-end perspective, including active involvement of end users (households and businesses). To offload the central grid, more and more communities will start working together to optimize their self consumption - and supply energy to each other locally. This requires independent tracking of what source their consumption comes from and to whom they supply at what time and cost.

Just like cryptocurrency, electricity trading will therefore become decentralized in the future, enabled by the Blockchain. This will turn the system upside-down: whether you provide excess electricity to your neighbor, or feed it into the grid for balancing purpose, the individual business and household can benefit real-time from prices on the spot market, with independent verification via the Blockchain. Energy management systems (EMS) will optimize self-usage and feed back to the grid when money can be made. This will provide an attractive business model to end users to be conscious on the timing and volume of electricity production, usage and discharge - instead of receiving a slight discount on their electricity bill like now.

My conclusion is that V2G is only part of the solution, viable on the mid to longer term. Smart charging and optimizing self-consumption still have a huge untapped potential and can already be widely applied at scale. V2G and managed discharge of 'behind the meter' energy systems into (local) grids will only take off when incentivized properly - this means they become part of the entire incentive mechanism in the chain, with the right fiscal approach - all independently verified over the Blockchain.

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