V2X: how ‘storage on wheels’ can reshape our energy system

EV smart charging

Dagoberto Cedillos, Strategy & Innovation Lead at Open Energi

As Electric Vehicle (EV) uptake accelerates we’re starting to see a radical transformation in the way transportation influences the power system. Vehicle-to-X (V2X) technology, which can be used to discharge an EV battery back to the grid, or to power our homes and businesses, has a pivotal role to play.

By unlocking ‘storage on wheels’ V2X can bring down the cost of EV ownership; reducing the need for infrastructure upgrades and cost effectively integrating more renewable generation. Open Energi’s analysis suggests that by using vehicle batteries to optimise electricity demand against prices, EV owners could benefit from a new income stream in the region of £1,500 a year.

EV momentum

The UK currently has over 130,000 EVs on the road, and National Grid expects this to rise to over 10 million by 2030. Globally, BNEF forecasts 130 million EVs in the same timeframe.  As 2019 gets underway, all the indicators suggest EV growth is well on its way to hitting these targets, breaking records month-on-month. The graph below shows how EV forecasts have increased year on year. It’s possible we will see a very visible step change in the mid-2020s, as EVs hit up-front cost parity with Internal Combustion Engines (ICEs).

 

BNEF rising consensus on EV adoptionRising Consensus on EV adoption, source BNEF

Quantifying EV flexibility from smart charging

Last year Open Energi analysed the potential to manage EV electricity demand (one way) using smart charging.  Taking National Grid’s 10 million by 2030 forecast, we identified some 12GW of flexibility which could turn EVs from a threat to grid stability to an asset that can benefit the grid, drivers and the environment alike.

Smart charging flexibility comes from the energy that can be shifted (e.g. moving a period of charge, or part of it, from one time to another) and is determined by the amount of energy a vehicle will require at a given charge.

An average vehicle in the UK drives 21 miles per day, which translates to 6-7kWh. It is also limited by the speed of charging, typically 3, 7 or 11kW for an EV charging at home or in the workplace.  These scenarios offer the most smart charging potential because vehicles are parked and charging for longer periods, which makes their charging more interruptible.

There is no need for an expensive rapid charger outside your office or home if you are parked there for several hours. You will have ample time to charge your vehicle with a cheaper, slower charger.

Flexibility from EV charging with higher charging speeds is less interruptible, as it will tend to take place in situations where people want to charge quickly and continue with their journey, e.g. forecourt environments. These rapid charging scenarios will likely be complemented by stationary energy storage, which will help to reduce consumption during peak periods, manage local network constraints and provide grid services, as in the case of Open Energi’s project at South Mimms Motorway Services.

V2X capabilities

V2X tableOpen Energi’s 2017 analysis explored the potential to enable flexibility via smart charging. Turning our attention from smart charging to V2X provides food for thought. Instead of being limited by the amount of demand that can be shifted, V2X flexibility is defined by the amount of energy storage capacity in the vehicle battery (e.g. 40kWh for a Nissan Leaf) and its charge/discharge speed (3kW or 10kW based on current technology). This energy storage capacity could be used multiple times in a day, depending on its charging and discharging.

Conservatively assuming 5 million vehicles on the roads by 2030 – half of National Grid’s forecast – this translates to 200GWh of storage. Assuming they could charge/discharge at a low speed of 3kW, this equates to 15GW of capacity, enough to power 30 million homes! For comparison, National Grid’s most optimistic 2030 forecast of total (stationary) electricity storage capacity is 9GW.

Household demand

Given the battery accounts for some 50% of the car’s cost it is important to consider battery lifecycle and how using it could impact the vehicle’s warranty. However, keep in mind that a vehicle driving the average 21 miles a day will use less than a fifth of its capacity each day (7kWh/40kWh). The graph below illustrates a typical UK home’s daily consumption, which is in the region of 2kWh over the evening peak (4-7pm).

Daily Household Electricity ConsumptionResidential demand profile, source UKERC

Using V2X technology, an EV battery could discharge to the home during this time and already create substantial value by simply taking the household ‘off-grid’ when prices are at their highest. Adding this 2kWh to the 7kWh needed for driving gives a total daily throughput of 9kWh, or 22.5% of battery capacity.

EV storage on wheels

The batteries Open Energi operates in our portfolio of distributed energy assets usually perform a full charge/discharge cycle per day and comply with warranty conditions, so there is potential to extract further value by increasing the utilisation of the vehicle battery. However, in the example of a household we need to evaluate if the spread between the export price during the peak and the import price when energy is recovered is positive to justify exporting to the grid. This is not necessarily the case for larger demand sites such as an Industrial or Commercial user.

Opportunity for large energy users

Sites with greater demand could shift even more energy, and discharge more vehicles at once, without having to export. Essentially, a fleet of commercial vehicles becomes a behind-the-meter energy storage asset for a site when drivers have finished their shifts, displacing site consumption during the peak and recharging the vehicle battery when prices fall. Open Energi’s analysis suggests that this kind of demand optimisation could be worth up to £1,500 per vehicle per year.

The main obstacle today is the price and availability of V2G chargers but this should quickly change. While V2G chargers are relatively difficult to procure at present, V2G compatible vehicles are already being sold at a similar price to comparable EV models. For example, Nissan’s electric van, the e-NV200, does not seem to have a premium for the feature – it comes already equipped with V2G compatible charging technology. As charging technology catches up, V2G will be a standard bundled feature of these vehicles.

Storage on wheels

Projects such as Powerloop, the first large-scale domestic V2G trial in the UK, aim to demonstrate the benefits of V2X in action. Backed by Innovate UK and bringing together a consortium including Open Energi, Octopus Energy, Octopus Electric Vehicles, UK Power Networks and ChargePoint Services, the 3-year, £7 million project will see 135 V2G chargers rolled out on the UK’s electricity grid. EV drivers will be able to access a special V2G bundle when leasing a V2G compatible car.

A two-way charger will enable the driver to charge their vehicle intelligently, using their vehicle battery to power their home during peak times or sell spare power back to the grid. The project will also focus on the role of EVs in delivering flexibility services to the local network. Open Energi’s Dynamic Demand 2.0 technology will aggregate the cars’ battery power to integrate domestic V2G into UK Power Networks’ flexibility services.  Together, we aim to demonstrate the benefits of using EVs to support the grid and reduce costs for drivers.

It’s clear that V2X unlocks a huge opportunity for energy systems globally – with the potential to create a volume of ‘storage on wheels’ that will ultimately eclipse grid-scale and behind-the-meter batter storage many times over. Depending on how we shape regulation, develop technology and create new business models, this huge amount of flexible storage potential could be captured to lower the cost of car ownership, power our homes, and operate our electricity network more efficiently, whilst accelerating our transition to a net zero carbon future.

How EVs can help drive a more sustainable energy future

Tesla South Mimms Supercharger and PowerPack

Electric Vehicles (EVs) have taken off in 2017 with governments, manufacturers and industry queuing up to announce bold commitments, product launches and sales figures. Suddenly, EVs have shifted from being a future technology, to a technology of the here and now.

The next decade will be critical for EVs, and their accelerating deployment will have a significant impact on infrastructure systems and markets. A lot of attention has been given to ‘worst-case’ scenarios but smart charging technology means EVs can be managed to the benefit of the system, accelerating our transition to a sustainable energy future and supporting low carbon growth. New analysis by Open Energi suggests that EVs could provide over 11GW of flexible capacity to the UK’s energy system by 2030.

Rise of EVs

The next decade will be incredibly important for EVs, and their deployment has been strengthened by manufacturer commitment, government influence and price curves. Manufacturers including Volvo, Jaguar, and Volkswagen to name a few have made bold statements, claiming the electrification of their product lines and assigning large budgets for R&D. Global EV line-up will almost double by 2020, as the release of Chevy’s Bolt, Tesla’s Model 3 and Nissan’s new Leaf lead EVs into the mainstream.

Governments such as France and the UK have agreed to ban sales of diesel vehicles by 2040. Other countries have set aggressive sales targets, for example China, who has set a 7m target in its 2025 Auto Plan. And all want to become world leaders in EV technology. Here in the UK, BEIS has announced funding for battery and V2G technology development with further funding announced in the Autumn Budget.

Technology development and manufacturing scale-up continues to drive prices down. Battery prices, which account for around 50% of the cost of an EV, have fallen more than 75% since 2010 and are expected to continue to do so at about 7% year on year to 2030. Analysis from both UBS and BNEF claims price parity will be achieved in Europe, US and China sometime in the 2020s, repeatedly accelerating the next million of sales.

The first million takes the longest: length of time, in months, to reach electric vehicle sales milestones
The first million takes the longest: length of time, in months, to reach electric vehicle sales milestones

EVs and electricity demand

According to BNEF, in 2040 54% of global new car sales and 33% of the global fleet will be electric, with a demand of up to 1,800 TWh (5% of projected global power consumption). In the UK, National Grid suggests around 9 million EVs will be on the road by 2030[1]. This uptake in EVs will have a significant effect on our electricity system.

Source: National Grid Future Energy Scenarios 2017 (Two Degrees)
Source: National Grid Future Energy Scenarios 2017 (Two Degrees)

 

Source: Bloomberg New Energy Finance
Source: Bloomberg New Energy Finance

Although EV charging will cause an increase in overall electrical energy demand, the greater challenge lies in where, when and how this charging takes place. The overall electricity demand change will be a single-digit percentage increase but if all this energy is consumed at the same time of day, it could result in double digit percentage increases in peak power demand. This creates challenges for generation capacity and for local networks, who could be put under strain to meet these surges in power demand.

There has been a lot of attention given to the worst-case impact EVs could have on the system – but less analysis of the benefit they could bring as a flexible grid resource controlled by smart charging. At Open Energi, we have used a bottom up approach to quantify the flexibility EVs could offer the UK’s energy system, and the opportunities it could create.

Flexibility scenarios

Different charging scenarios were designed based on the charging speeds currently available and their granular flexibility was quantified (see below for a full description of the methodology). Then, the time at which each of these scenarios is likely to occur was evaluated. Finally, using EV fleet forecasts, volume was attributed to each scenario and a set of future flexibility profiles produced.

EV speed table

EV charging scenarios table

By 2020, with around 1.6 million EVs on the road, Open Energi’s analysis suggests there could exist between 200 – 550 MW of turn-up and between 400 and 1.3GW of turn-down flexibility to be unlocked from smart-charging. The available flexibility would change throughout the day depending on charging patterns and scenarios. In 2030, with 9 million EVs on the road, this rises to up to 3GW of turn-up and 8GW of turn-down flexibility respectively.

EV flex profile 2020 down

EV flex profile 2020 up EV flex profile table

Opportunities: smart charging for flexibility

Smart charging technology turns EVs from a threat to grid stability into an asset that can work for the benefit of the system. Optimal night-dispatch for example, can ensure all vehicles are charged by the time they’ll be used the next day without compromising their local network infrastructure. Cars could help to absorb energy during periods of oversupply, and to ease down demand during periods of undersupply. On an aggregate basis, they can help the system operator, National Grid, with its real-time balancing challenge, and provide much needed flexibility to support growing levels of renewable generation. Suppliers could work with charge point operators to balance their trading portfolios and manage imbalance risk, helping to lower costs for consumers.

Of course, smart charging can only happen with the consent of the driver, and drivers will only consent if their car is charged and ready to go when they need it. This means deploying artificial intelligence and data insight to automate charging without affecting user experience, so that the technology can learn and respond to changing patterns of consumer behaviour and deliver an uninterrupted driver experience. Getting this right is key to aligning the future of sustainable energy and transport.

Dago Cedillos is Strategy and Innovation Lead at Open Energi

Methodology

Open Energi’s methodology consists of a bottom up approach, looking at the different charging scenarios and quantifying the flexibility from each of them. The time at which each of these scenarios is likely to occur has been analysed. Finally, using EV fleet forecasts, based on National Grid Future Energy Scenario forecasts (2017, Two Degrees), we’ve attributed volume to each scenario and generated a flexibility profile.

Charging speeds

We formulated our charging scenarios based on the different charging speeds and the capabilities of each. Charging speeds are currently referred to as Slow, Fast and Rapid as set out below.

EV speed tableScenarios

Based on these speeds, we built some scenarios considering the use-cases. Slow charging is likely to be used at home, Fast charging in public spaces and Rapid in public spaces and forecourts. We assumed typical plug-in durations for these charging scenarios.

EV charging scenarios table

Main assumptions

Considering the charging scenarios, calculations were performed on the turn-up and turn-down capabilities of each. An important element of this analysis, the average daily energy requirement per vehicle, was based on the following assumptions:

  • Average daily miles travelled per vehicle: 20.54 (based on UK National Transport Survey’s VMT)
  • A conservative assumption of 20kWh/100km (the Chevy bolt can travel 238 miles on a 60kWh battery)

EV electricity demand table
This leads to the figures in table (above), which align closely with National Grid’s Future Energy Scenarios 2017 when using their fleet forecasts.

Extracting flexibility

Different likely situations were built for each scenario, using 7kWh as a simple rule of thumb of what an EV would require as charge per day. For example, for the ‘Long’ scenario: using a 3kW (B) slow charger, energy to be charged (A) was evaluated for the different likely situations (J). Potential turn-up (F) and turn-down (H) was defined and saturation/underperformance parameters (G & I) were introduced for this flexibility. That is, to charge (A) using speed (B), there would only be (I) hours of turn-down flexibility (H) in an optimal case before underperformance (i.e. not fully charging the vehicle). This was repeated across all scenarios using the range of charging speeds, plug-in durations and rates of charge eligible for each to quantify flexibility.

Energy to charge table
The average flexibility potential for each possibility was calculated as a kW value, as the product of (F) & (G) and (H) & (I) divided by plug-in time (D). This was the estimated average kW value of flexibility for a vehicle under the option in the scenario. Max, mid and min flexibility values were defined for each scenario based on the options calculated per scenario.

Flexibility profiles

Having the average flexibility per vehicle for each scenario, this was then converted into a flexibility profile considering the following assumptions:

  • Long scenario (home charging) likely to take place during the night.
  • Medium scenario (workplace charging) likely to take place during office hours.
  • Short scenario (shopping/dining) likely to take place during early morning, lunch and after office hours.
  • Ultra-short scenario (forecourts) likely to take place during early morning, lunch and after office hours.

Time of day tableAttributing vehicle volume to each scenario was then performed as follows. Data from the Department of Transport[2] indicates that approximately 50-55% of households owning a vehicle have access to off-street parking. Open Energi assumed the following share of vehicles per scenario[3]. Further work needs to be carried out to define how this share will evolve over time with the development of charging technology.

Share 2020 table
The aggregate flexibility for each hour which defines the profile was then calculated using the flexibility per vehicle and scenario, the scenario schedules, and the number of vehicles in each scenario and for each time period (2017, 2020, 2030 and 2040).

[1] National Grid Future Energy Scenarios 2017 (Two Degrees)

[2] Department of Transport survey: http://webarchive.nationalarchives.gov.uk/20111006052633/http:/dft.gov.uk/pgr/statistics/datatablespublications/trsnstatsatt/parking.html

[3] Open Energi identified a gap in data available to define these shares with accuracy, these will have to be reviewed over time.

How demand flexibility can boost the benefit of a Corporate PPA

solar panels

More and more companies are turning to corporate PPAs as a way to power their business sustainably and manage their long-term energy costs. Using demand flexibility to help align patterns of supply and demand can boost the benefits all round, as Open Energi’s Commercial Analyst, Dago Cedillos, explains.

The rise of corporate PPAs

The increasing cost competitiveness of renewables and the desire from many businesses to strengthen their sustainability credentials has led to the rise in popularity of the corporate PPA. Through a corporate Power Purchase Agreement (PPA), a company agrees to purchase the energy produced by a renewable project(s). This helps businesses to meet their sustainability goals whilst enabling them to hedge against future energy prices and even bring down the cost of their current energy bill.

Renewable developers have turned to corporate PPAs as a means to enable the delivery of their pipelines. With the removal of subsidies such as the Feed-in Tariffs (FiTs) here in the UK, PPAs can help developers  finance and develop projects by securing long-term energy sale contracts which guarantee revenue for a substantial part of the project lifetime.

How does a corporate PPA work?

A corporate PPA is a contract between a renewable power producer and a corporate, agreeing to supply a specified volume of electricity at an agreed price. It is usually structured to last for 10 years or more, considerably longer than an energy supply tariff which tend to be for one to three years.

There’s no need for the corporate and the renewable project to be located near one another – they could be next door to each other or located on opposite sides of the country.

Of course a company’s demand will not always match a project’s generation. To manage this disparity companies have to go through a licensed supplier who will trade and settle in the market the surplus energy they do not use and/or the additional energy they may require, guaranteeing power delivery and assuming responsibility for issuing the corporate’s electricity. Suppliers take a fee or a premium for administration and taking the risk of balancing the residual of the renewable generation and the company’s electricity demand.

Aligning supply and demand

For example: let’s say a factory with demand profile X (blue line) agrees a PPA with a small solar farm with generation profile Y (grey line). The factory effectively consumes energy generated by the solar farm represented by shaded area A. The area B represents the additional energy that must be bought by the supplier to meet the factory’s demand, whilst the area C represents the surplus renewable energy that is sold to another party as the site’s demand has already been met.

Matching factory demand and renewable generation

The cost of this residual balancing will be affected by market dynamics and the premium charged by the supplier for managing this process.

The overall business benefit of a PPA will be determined by a number of factors, including the demand profile of the site, generation profile of the asset, market prices and the structure of the agreement with the supplier. But the more responsive a corporate’s demand can be to these factors, the better positioned they will be to maximise the benefits of a PPA.

Cutting costs with demand flexibility

This is where demand side response (DSR) and energy storage come in; shifting demand to more closely match the project’s renewable generation profile could maximise the effective consumption of this energy real-time and result in lower residual balancing. This would mean having to buy less energy during the shortage periods, which might be more expensive than that offered by the PPA, and selling back less energy during the surplus periods. Additionally, it could help decrease the imbalance risk of the supplier and make the case for a lower fee or premium.

Demand flexibility and corporate PPAsIt could also present arbitrage opportunities for the business. By shifting consumption away from peak times to cheaper periods, surplus energy from the PPA can be sold on at a high rate, while avoiding punishing network and capacity market charges which occur at the same time. Flexibility could even be used to respond to instantaneous market opportunities, such as high system prices occurring with mismatch in supply and demand, much in the way the trading team of a supplier would do today with large generators.

Optimising a PPA with demand flexibilityThe value of this balancing achieved through flexibility with storage and DSR will vary across hours, days and seasons according to changing market conditions and patterns of supply and demand. What’s needed is technology that can evaluate these parameters in real-time, and optimise a business’ demand accordingly. This is where Open Energi comes in. We’re using our advanced technology, data-driven insight and experience of invisibly managing demand flexibility to help corporates make the most of their PPA.

Our solutions not only help to balance the grid, but can also balance demand real-time against PPA generation. This means businesses can make better use of cheap, renewable energy when it’s there, lower costs for suppliers, and ultimately bring their own energy bills down.

Dago Cedillos is a Commercial Analyst at Open Energi, where he focuses on innovative methods and business models to enable a more flexible energy system. Prior to Open Energi, Dago was part of a clean-tech startup working on a novel carbon-negative electricity generation technology. Dago has an MSc in Sustainable Energy Futures from Imperial College London, and has published a paper on investment strategies for decarbonisation and decentralized energy systems.