V2G Technology Is Getting New Interest In China & Europe

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There are now millions of battery electric cars in the world. If utility companies were able to tap all the stored energy in all those batteries, there would be less need to build new generating stations or battery storage facilities, potentially saving them billions of dollars. The technology is called vehicle to grid — V2G for short — and it involves a little more than simply plugging into an electric car and sucking electrons back out.

The electricity that flows though the wires on the electrical grid has to meet some very strict parameters having to do with voltage, frequency, and other parameters. Before the energy stored in a battery can be sent to the grid, it has to be converted from DC to AC and then smoothed, massaged, and conditioned so that it matches up exactly with the rest of the electricity on the grid.

V2G technology could be financially rewarding for electric car owners. Many utility companies don’t want the solar energy produced by rooftop solar systems because they already have too much electricity sloshing around on the grid during daylight hours. That is the primary reason why net metering rates — the amount of money utilities have to pay owners of rooftop solar systems — have been slashed lately, sometimes to near zero.

The state of California last year ripped up its net metering rules to encourage people to add residential storage batteries as part of any new rooftop solar systems. That way, the utilities can tap those batteries when they need to — typically between the hours of 4:00 and 8:00 PM when the sun starts to set and people arrive home to begin cooking dinner and watching TV.

But that requires people to spend extra money for a home battery when in fact millions of people already have a much bigger battery sitting outside in their electric car. In fact, according to the Google gods, today at this very minute there are about 750 GWh of batteries in all those cars. To put that in some sort of perspective, those same Google gods say there is a measly 200 GWh of grid scale battery storage installed today. That gives us a pretty good idea of the size of the opportunity EV batteries represent, if we can just figure out how to tap it.

China Takes The Lead On V2G

China is busy doing exactly that. While the US is putting boulders in the path of EV adoption, the Chinese government has embarked on a pilot program to see if it can connect millions of electric vehicles to its national electricity grid. According to Bloomberg Hyperdrive, the program, which is backed by China’s top economic planning agency and energy regulator, is key to the world’s largest auto market, alleviating worries around energy security as the EV revolution in that country accelerates.

China’s fleet of electric cars, buses, and trucks used about as much electricity as the entire nation of Sweden last year, Bloomberg said. More than 11 million EVs were sold last year — about 45 percent of the new car market in China. If the pilot program is successful, it could have major global implications for V2G technology.

Offering financial incentives to people sending power back to the grid also could further boost EV adoption, while helping renewable energy ease the reliance on oil and gas.

The initial batch of 30 electric bi-directional EV charging projects was announced by the National Development and Reform Commission in early April. The trials will also harness smart charging technology that will limit charging times for the vehicles in the tests to off-peak hours when demand for electricity is low. Until now, V2G programs have been managed by local companies with limited financial backing. The extra emphasis provided by support at the national level is intended to accelerate development of the technology.

China Is Ahead Of The Curve

In fact, Chinese automakers have been exploring V2G applications for at least five years. As early as 2020, Dongfeng Motor and State Grid, the world’s largest utility company, partnered to integrate EV infrastructure into green power trading and to advance V2G adoption. In 2021, BYD and Levo Mobility announced a collaboration in which Levo promised to acquire up to 5,000 V2G-enabled BYD commercial vehicles over the next five years.

Kai Li Lim, a professor at the University of Queensland in Australia who specializes in EV charging, told Bloomberg the potential to harness battery power is “so important because when you have one car, it doesn’t really matter with a battery of 60 kilowatt hours, but if you were to spread that out — in China’s case, to hundreds of millions of cars — then that’s going to be a very big deal. If China is able to push toward a national standard and incentivize consumers, that’s going to be the catalyst for the world. That’s going to be quite exciting.”

There are challenges, however. Many people in China live in highrise apartment buildings and do not have access to dedicated EV chargers. People who use curbside public chargers are not good candidates for V2G technology. Modeling by BNEF found that if 25 percent of EVs were able to send electricity back to the grid, their owners could earn more than $1,100 a year. However, getting that many drivers to participate in V2G will be difficult. A more likely scenario is that around 10 percent of drivers will agree to send energy back to the grid.

Unknown Unknowns

V2G offers great promise, but questions remain. Tesla has always shunned the idea, largely because of a fear that it will decrease the life expectancy of batteries. If that were to happen, it could have a negative impact on the brand (although, far less of an impact than the toxicity of its leader). There are some studies that suggest using batteries more actually enhances their durability, just as exercise strengthens muscles.

The truth is that we simply don’t have all the answers yet and the only way to get definitive answers is to put these systems in place and gather data from the real world. The allure of potentially earning up to $1000 a year for participating in a V2G scenario may be enough to offset the fears people may have about the technology.

V2G trials are taking place in many countries around the world. In Utrecht, Renault has partnered with several carsharing services in a V2G project that involves 500 Renault 5 cars. Transport & Environment claims the technology could save European utility customers $23 billion a year if implemented widely. In Oakland, California, a large V2G program is in place that takes advantage of the batteries in a fleet of electric school buses.

The dream is that one day, all the electric cars in the world will be part of an enormous V2G system that will take in electrons when there is an abundance of them on the grid and send them back to the grid when they are scarce. Like a giant set of lungs, they will stabilize power grids as they breathe energy in and exhale it back out. There are plenty of questions that need to be answered before that happens, and as usual today, China is taking the lead while the US is hiding under the bed. There may be larger lessons to be learned here other than whether V2G technology is feasible.