The Future is Now Blog Series. A Vehicle-Centric Grid. EC-MAP. October 11, 2018

A Vehicle-Centric Grid

By Alisa Ferguson
October 11, 2018

What do you picture when you think of the grid? Hulking power plants with steam billowing from their stacks? Tall transmission lines looming over a wide expanse of land? Homes connected together with poles and wires peeking out from between the trees?

Sure the grid can look like this. But increasingly it can also look very different—more decentralized and sometimes virtual, where the lines between power and mobility are blurred.

Imagine a grid where the central figure isn’t a power plant but a car. On this grid, intelligent software automatically coordinates data to turn thousands of cars into mobile generation and storage assets. Consumers use smart phone apps to optimize their vehicle preferences—whether for speed, fuel efficiency, or revenue. Utilities that built out EV infrastructure early are leaders in deploying new business models, and there’s room for other players as well—office parks and universities that aggregate supply and demand; software start-ups that develop new ways to utilize data; and even the major auto manufacturers, which have revolutionized auto financing. As a result of these innovations, grid operators are also achieving higher efficiency and better resilience than ever before.

What would it take to achieve this future? Five things are essential; what connects them is digital technology.

To have a vehicle-centric grid, the number of EVs on the road must rise. Last year, just over a million EVs were sold worldwide. However, the latest Bloomberg New Energy Finance forecast estimates that EV sales will increase exponentially to 11 million in 2025 and 30 million in 2030, when they will become cheaper to make than internal combustion engine cars. By 2040, BNEF estimates EV sales will reach 60 million, representing 55 percent of the global light-duty vehicle market. In aggregate, that will mean nearly 560 million EVs on the road.

EVs must also have bidirectional communication capabilities. A vehicle-centric grid requires EVs to not just consume electricity but also feed electricity from their batteries to the grid. There are many scenarios for how this could work. A recent partnership between the National Renewable Energy Lab (NREL) and University of Delaware has gathered data about different scenarios by testing an open source system that tracks and manages exchanges between vehicles and charging stations. The system measures and quantifies key technical metrics such as round-trip efficiency; latency between a vehicle sending a signal and the grid responding to it; and the minimum and maximum “up” time for vehicles. Understanding these issues is critical to addressing barriers to a vehicle-centric grid.

Another technical issue is the potential for vehicle battery degradation. Using EVs for grid management has the potential to reduce battery capacity and lifespan such that the loss of value will be greater than the value produced by any services to the grid. However, researchers at the University of Warwick recently developed an algorithm designed to minimize battery degradation when EVs are used in vehicle-to-grid (V2G) scenarios. Under certain conditions, battery degradation was not only minimized, but two-way power exchange with the grid was actually programmed to extend a battery’s useful life, reducing capacity fade by 9 percent and power fade by 12 percent.

Inevitably, new EV infrastructure must be financed and built. A recent Axios survey found that 62 percent of people are unlikely to consider an EV, and the top reason is a lack of charging stations. Morgan Stanley estimates that $2.7 trillion is needed by 2040 to build out the necessary infrastructure globally. In the U.S., states and utilities are already stepping up with major investments. California utilities have received approval for more than $760 million in transportation electrification projects; New Jersey utility PSE&G has announced a $300 million investment in 50,000 charging stations; and the New York Power Authority announced a $250 million commitment to electric vehicle infrastructure through 2025. In 2017, 18 utilities or legislatures took action on charging infrastructure, a number that will need to grow in the coming years.

It is also critical to ensure EVs are not just available for the wealthy. Financing and business models must help make vehicles available to low-income communities, many of which live with the most serious air pollution. One model may be the Charging Ahead California Initiative, where the Greenlining Institute and California Air Resources Board have created a low-income EV financing assistance program that combines down payment assistance with low-interest loans to make reliable, clean cars more affordable than the alternatives. A vehicle-centric grid that serves everyone requires listening to the perspectives of low-income drivers and using innovative financing to create options that meet their needs.

We shouldn’t let a failure of imagination hold us back from a future that puts consumers—and maybe their vehicles—in the driver’s seat. A vision for a bottom-up approach to policy that merges digital technology and diverse stakeholder views can help us connect the dots—and create a map to a digital energy future.

Alisa Ferguson is a Senior Advisor with EC-MAP and writes regularly on ideas for accelerating energy innovation.


Further Reading:

Bloomberg New Energy Finance, Electric Vehicle Outlook 2018

National Renewable Energy Laboratory, Multi-Lab EV Smart Grid Integration Requirements Study

North Carolina Clean Energy Technology Center, The 50 States of Electric Vehicles

Greenlining Institute, “A Hybrid EV Helps A Mental Health Worker Help Others