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| Fig. 1: Illustration of two-way connection between grid and EV. The EV can discharge and sell power back to grid during high energy demand. (Source: Wikimedia Commons) |
As electric vehicles (EVs) become increasingly more common, vehicle-to-grid (V2G) applications, where EVs sell energy back to the grid during high demand, become more appealing as a way to stabilize the grid and generate profits for EV owners. A diagram of how this type of two way connection works is shown in Fig. 1. [1] From the consumer perspective, they can take advantage of varying electricity prices to make a profit. Additionally, V2G technologies can improve grid resiliency by providing backup power during outages and reduce CO2 emissions by reducing the need for natural gas peaker plant usage during high energy demand.
But just how much money could consumers make? Would they be willing to do this knowing they are sacrificing range and the ability to drive somewhere if needed? What impact would this have on the electric grid in terms of CO2 emissions? And would utilities be flexible enough to accommodate such programs given the uncertainty in participation and load planning? We will examine all of these questions below, focusing specifically on the state of California.
The cost of owning an electric vehicle is rightfully considered a major barrier to their widespread adoption. In a 2021 study, while costs vary dramatically based on usage and location, the median total cost of ownership for an EV compared with a similar internal combustion engine (ICE) vehicle in California was consistently around 10% higher for EVs. [2] V2G integration technologies would offer a pathway to recouping value for EVs and reducing that gap. To demonstrate this, we will examine how V2G integration would impact the total ownership cost for the Chevy Bolt.
The Chevy Bolt has a battery size of 65 kWh and a reported range of 259 miles. This results in a range of 3.98 mi/kWh. No EV owner is going to consistently charge and discharge their vehicle between 0% and 100% just to buy and sell energy from the grid — otherwise they could just buy a battery. Furthermore, each consumer is going to have different comfort levels on how full their battery is at any given time in case they need to drive and how often their car will be available and able to sell energy to the grid. For this reason, we will treat these conditions as variables and examine potential profits given rate of participation. Specifically, we will examine 3 levels of depth of discharge corresponding to minimum allowable vehicle ranges of 100 miles, 150 miles, and 200 miles. To get the kWh available (Eavail) for each of these ranges, we use the equation
where Etotal is the kWh of the EV, rmax is the maximum range of the EV, and rmin is the owner's minimum needed range. For a Chevy Bolt where rmin=100:
Note that while these minimum vehicle ranges depend on comfort level of the EV owner, they also have physical limitations because at a safe level-2 charger, the charge/discharge rate is 10 kW. So 39.9 kWh corresponds to roughly 4 hours of charging and discharging time, which is roughly the maximum amount of time a utility would need energy during peak demand hours in the late evening. Thus, while an EV owner may not need their car and would love to sell more energy to the grid, this represents the maximum possible amount of energy they could sell in a day due to physical limitations of battery discharging. Additionally, we will define another variable, r, which represents the percentage of time where EV owners are able to participate in the program. Specifically, we will examine cases where EV owners are able to sell energy r=(20%, 40%, 60%) of the times in which utilities are looking to buy during peak demand. The r=20% scenario may represent workers who's vehicle can only participate during weekends. Furthermore, since V2G technologies are only needed for warm days during the summer, we assume only 100 days in the year are available for this program in CA. This number is in agreement with other studies on this topic. [3]
Using the same model as the study done by Lee et. al which uses pricing data from Southern California Edison, we assume that utilities in CA will pay EV owners the average summer retail rate of electricity at $0.267/kWh. [4] During off hours, EV owners can charge their car at $0.056/kWh. [4] This results in a profit for $0.211/kWh. However, due to the efficiency of charging/discharging a Li-ion battery being around 90% and an assumed tax rate of 20%, the effective profit for the EV owner is reduced to 0.9 × $0.211/kWh × (1 - 0.2) = $0.152/kWh.
Finally, to get the total yearly profit for an EV owner to sell energy back to the grid, we use the following equation:
For example, in the case above where the EV owner sets a minimum allowable range of 100 mi and participates 20% of the time:
See Table. 1 for the V2G profits in each of the other scenarios examined.
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| Table 1: V2G yearly profits for various participation levels. |
Note that in the aforementioned study by Parker et. al, the total cost of ownership over a 5 year period for the Chevy Bolt was $39,000, compared with $37,000 for a Chevy Trax (ICE). [2] While profits from V2G is not likely to fully make up the difference in price for an EV, it certainly helps get closer.
During peak electricity demand, utilities often use natural gas plants to supply energy because they are easily dispatchable compared with baseline generation technologies such as coal, nuclear, hydro or geothermal and more reliable than solar or wind due to intermittency issues. Thus, by integrating V2G where the electric grid can draw energy from EVs during this time, we can assume the technology being replaced is natural gas. Assuming an average thermal efficiency of 35% and knowing that the molar mass ratio of CO2 to CH4 is 44/16, we calculate the carbon intensity of natural gas as:
| Natural Gas Emissions | = | 44 16 |
× | 3.6 × 106 J/kWh 0.35 × 5.5 × 107 J/kg |
= | 0.514 kg CO2/kWh |
A analysis of the California grid, when taking into account all forms electricity generation, found its carbon footprint to be 0.191 kg CO2/kWh. [4] Since EVs are charged from the grid, this results in a savings of 0.323 kg CO2/kWh compared with natural gas. But just how much could we offset? California has an ambitious target of 5 million EV fleet by 2030. If they were to meet this target and assume the median scenario in Table 1 of r=40% participation and 150 mile minimum range for all EVs:
With the assumptions above, EVs could offset 6.589 × 109 kWh of natural gas generation by 2030. This would correspond to an annual emissions reduction of 6.589 × 109 kWh × 0.323 kg CO2/kWh = 2.13×109 kg CO2. But is this number even possible? How much peaker plant use could we possible offset? As it turns out, PSE Healthy Energy performed a study of all natural gas peaker plants in CA in 2020 and listed their reported MW output and capacity factor (what % of time they operate). [6] For each i of the 78 peaker plants in the study, we can multiply their power output, Pi, by their capacity factor, CFi, and the number of hours in a year to get the total energy output of the plant. Then, we sum all the plants together to get the total energy output for the year:
Since this number is of very similar size to that above, this suggests that a fleet of 5 million EVs at the assumed participation rate could almost completely replace the use of natural gas peaker plants in CA.
Finally, we consider the impact on existing batter storage programs, which would compete directly with V2G. The California Energy Commission projects that we will need 9.5 × 109 kW of battery storage by 2030 to meet the demands of the SB 100 climate bill. [7] Assuming each EV can provide 10 kW of power, this number can be completely met by 950k EVs, which represents less than 20% of the projected 5 million EVs by 2030. Obviously, the utilities planning out generation could not consistently rely on energy from EVs they do not own, but these numbers demonstrate how EVs could potentially reduce the need for building out more energy storage.
There is clearly interest and potential economic and climate benefits of V2G given an electric grid that is becoming increasingly more carbon neutral. However, there are also many business model challenges. While we demonstrated that V2G could in theory replace natural gas to meet peak energy demand, there will likely be resistance from utilities. This is because they like to have generation lined up and planned out, and relying on consumers to have EVs plugged in when they need energy is likely not very reliable. As the numbers of EVs increase though, and if pilot programs demonstrate success, this could be used as a potential avenue for emissions reduction.
© Ross Weber. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] K. M. Tan et al., "Integration of Electric Vehicles in Smart Grid: A Review on vehicle to Grid Technologies and Optimization Techniques," Renew. Sustain. Energy Rev. 53, 720 (2016).
[2] N. Parker et al., "Who Saves Money Buying Electric Vehicles? Heterogeneity in Total Cost of Ownership," Transp. Res. D Transp. Environ. 96, 102893, (2021).
[3] M. Wang and M. T. Craig, "The Value of Vehicle-to-Grid in a Decarbonizing California Grid," J. Power Sources 513, 230472 (2021).
[4] Z. J. Lee, J. Z. F. Pang, and S. H. Low, "Pricing EV Charging Service With Demand Charge," Elecr. Power Syst. Res. 189, 106694 (2020).
[5] L. Chen and A. P. Wemhoff, "Predicting Embodied Carbon Emissions From Purchased Electricity for United States Counties," Appl. Energy 292, 116898 (2021).
[6] "California Peaker Power Plants," PSE Healthy Energy, May 2020.
[7] L. Gillet al., "2021 SB 100 Joint Agency Report - Achieving 100 Percent Clean Electricity in California: An Initial Assessment," California Energy Commission, CEC-200-2021-001, March 2021.
