Vehicle-to-grid (V2G) technology or bidirectional charging is a two-way power system between the car and the grid. The idea behind Vehicle to Grid (V2G) technology is that we use the vehicle’s batteries as a storage unit. This stored energy will then be used for energy exchange between the electric vehicle’s battery and the power grid.
The extension of V2G technology is V2X, which stands for vehicle-to-everything. V2X uses the same principle as V2G but instead provides power to any electrical device or network, not just the power grid.
Table of contents
- How does Vehicle-to-Grid work?
- The benefits of Vehicle-to-Grid technology
- V2G business model
- Vehicle-to-Grid technical requirements
- Will V2G affect car battery life?
How does Vehicle-to-Grid work?
V2G technology is like reverse Smart EV Charging. It sends energy to the grid at peak demand and then recharges from the power grid during periods of reduced demand. Therefore the name – bidirectional EV charging.
In other words, EV users would buy the energy from the power grid when the costs are low and return sell it back when prices are high. In most cases today, this means charging overnight and sending it back during the day. Vehicle to grid technology can save money for EV users and, at the same time, helps in EV grid balancing.
Behind V2G, is a smart EV Charging software that controls the whole process. The smart software ensures the EV returns only the amount of power it doesn’t need.
The first priority is that the user always has enough power to do all his daily driving.
Let’s look at some simplified hypothetical real-life V2G scenarios!
V2G real-life examples
- A company has 100 electric vehicles in its fleet. They are all plugged in and fully charged in the morning. The fleet manager dispatches 80 vehicles on their daily routes. 20 vehicles are free that day. For these 20 EVs, he enables Vehicle-to-Grid mode while setting the minimum battery charge level to 70% to keep them operational if needed. With V2G, the company is making a profit on these 20 vehicles even if parked.
- A private user charges his EV overnight when electricity is cheaper. His car has a 400 km range on a full battery. He daily drives 100 km in total. So he enables V2G, and the vehicle returns the power to the grid when electricity is more expensive while still maintaining enough energy for him to make his daily driving.
- A homeowner uses solar panels. The electricity produced is stored in the battery of the car. This power can be used to power his house, and if there is still any left, he returns it to the grid for a profit. All while maintaining his car at a battery charge level he needs for his driving.
- An EV driver charges his car overnight and drives to work. There he plugs into the V2G charger and enables V2G. While at work, the vehicle returns the energy for profit, leaving him still enough charge to drive home.
The benefits of Vehicle-to-Grid technology
If Vehicle to Grid (V2G) technology becomes widespread, it will significantly benefit the power grid, EV customer experience (UX), and EV adoption.
Some of the essential benefits of Vehicle to Grid (V2G) technology are:
- V2G technology will decrease stress on the power grid and enhance the potential to accomplish grid balance. This balance could be achieved without expanding power generation infrastructure and could present an answer to EV charging infrastructure challenges. V2G technology can benefit the whole power grid and help local grids found in companies or residential complexes.
- Vehicle-to-Grid technology can provide cheap and fast decentralized energy storage in times of overproduction of electricity. It is an environmental obligation not to let electricity go to waste with such storage potential in electric vehicles.
- V2G can also be an ideal technology for easier management and identification of user behavior and actual energy usage.
- Vehicle to grid technology could also serve as an additional marketing tool to make EVs more attractive to the general public and companies’ fleets to speed up EV adoption.
New business models emerging around V2G technology can help users monetize on owning an EV.
V2G business model
We already mentioned the basic business model around Vehicle-to-grid technology. It’s buying (charging) cheap and selling (returning) with profit.
Let’s be honest. The general public doesn’t worry too much about grid stability.
The attractiveness of V2G technology lies in the fact that your EV could also serve as a source of income or at least lower its operational cost.
We are used to a car representing only a cost, but with V2G, we could actually start making money with it. That opens a whole new spectrum of business models and marketing tactics.
For the Vehicle to Grid (V2G) business model to be applicable, it should be based on replicability and scalability.
If V2G technology becomes widespread, anyone can participate, from private EV drivers to large companies operating huge EV fleets.
There is a catch, though. For this to work, utility companies, Electro Mobility Service Providers (EMSP), and Charge Point Operators (CPO) will need to create attractive business models and offers for V2G.
V2G business model for company fleets
Companies operating big fleets will first “jump aboard” the Vehicle-to-Grid train. Since the adoption of electric vehicles in fleets is already happening, it’s only logical that companies will take this opportunity to lower their fleet operational costs with V2G business models.
In fact, if we look at where V2G technology is already starting to be actually used, it’s in EV fleets.
Fleets require EV fleet management software, and with that in place, the step to implementing V2G technology is much simpler.
With many vehicles in the fleet, V2G could present a serious extra source of revenue if done right.
In a doctoral dissertation on the Vehicle-to-Grid business model in the Swiss market, A. Kaufmann calculated that with V2G running for 12 hours a day, a vehicle could earn about 100 euros (105 USD) per month in revenue.
That is about 1200 euros (1270 USD) yearly per vehicle with no extra effort. Multiply that with all the electric vehicles in a fleet, and we can come to a substantial amount that can quickly repay all the investment in V2G equipment and Smart EV charging software needed.
Keep in mind that this calculation was done in 2017 for a 10kW bidirectional EV charger and is based on electricity prices at that time.
Another study done in Norway in 2019 calculated the total yearly earned revenue of around 1900 euros (2000 USD).
V2G business model for private EV users
The V2G business model for private EV users is the same as for fleets. The only difference is that it’s done on a smaller scale.
That means that the total revenue a private user can generate is lower.
Because V2G technology needs more expensive equipment and software than regular home EV charging, it will take longer for the investment to return a profit.
But we have to look at the greater picture.
Many homeowners also have solar panels that generate electricity and return it to the power grid. With V2G, homeowners could store this electricity and use it later.
The optimal situation would be when a household could combine solar power, V2G or V2H (Vehicle-to-Home), and the in-house power grid.
That would create an environment where electricity is taken from the grid when it’s cheap and returned or used when it’s expensive.
If utility companies, EMSPs, and governments would step in and help with the investment in Vehicle-to-Grid technology, it would benefit the whole of society.
Vehicle-to-Grid technical requirements
For Vehicle-to-Grid technology to function, several technical requirements must be met.
V2G charging station
The first one is a dedicated Vehicle-to-Grid EV charger. As the name suggests, it’s not a regular EV charger but a bidirectional charger that supports the V2G function. There are not common on the market, but they exist, and more will be available when the technology moves from projects to commercial adoption.
For V2G to work, communication between the EV, the EV charging station, and the backend Smart EV charging management software is crucial. The software must control how much electricity an EV draws from a charging station and how much it returns.
This communication is enabled by ISO 15118, which allows the EV to report its battery’s state of charge to the charging station and OCPP 2.0 protocol for communication between the charging station and the backend software.
If this sounds familiar, you are right. It’s the same requirement as for Plug and Charge EV Charging.
V2G compatible electric vehicles (EV)
For now, it looks like the electric car manufacturers, with few exceptions, are not too keen on adopting Vehicle-to-Grid technology.
There are not many V2G compatible cars on the market, with only Nissan Leaf, Mitsubishi Outlander, and Ford F-150 Lightning officially confirmed to be V2G compatible when writing this article.
Hyundai, Kia, MG, and Porche are the next most likely candidates, but there is no official confirmation.
There are rumors that Tesla can support V2G, but the company advises against V2G use, and you could void the warranty by doing so.
It’s safe to say that for V2G to succeed, automakers must do their part too.
V2G compatible EV Charging software
The last part is the simplest!
Any Smart EV Charging software solution can be relatively easily upgraded to support Vehicle-to-grid (v2G), Vehicle-to-home (V2H), Vehicle-to-Load (V2L), or Vehicle-to-everything (V2X).
It doesn’t need any special upgrade as long it is indeed “smart” (not only marketed as such). That means it must support functions like Plug and Charge, dynamic EV charging load management, EV charging load balancing, etc.
Perhaps the trickiest part is that it needs to support advanced EV billing to be able to process Vehicle-to-Grid business models.
Will V2G affect car battery life?
With V2G charging and discharging the battery, car owners’ most common question is if this will affect the battery life. With the battery being the most expensive part of an EV, the question is well in place.
Studies on this topic exist but sometimes have opposite conclusions. For a great technical insight into this studies read here.
At least for now, the latest studies show that Vehicle-to-Grid technology must include proper battery management software to prevent damaging discharge cycles.
Experts say V2G will not affect (or minimally) battery life if all is done right. Some scientists even claim that V2G can actually improve it.
The question remains whether users will trust these claims and if the reward is tempting enough for them to try it.
Vehicle-to-Grid technology has come a long way since the theory was first published more than 20 years ago. If it becomes widespread and when we will see. At least, in theory, it’s a great concept.
Want to get more information about our solutions? Leave a comment below or Schedule a Demo!