• Virtual Power Plant
  • Electric Vehicle Charging Infrastructure
  • Electric Vehicle Supply Equipment
  • Vehicle to Grid

Busting the Myth of EV Battery Degradation in Supporting Grid Services

Dec 15, 2020

Guidehouse Insights

EV fleet managers stand to gain substantial value from optimizing their plug-in EV (PEV) battery charging through virtual power plants (VPPs), as discussed in a new white paper commissioned by AutoGrid. Optimization is one of the defining features of VPPs, which aim to maximize the profit for distributed energy resources asset owners while maintaining proper balance on the electricity grid at the lowest cost for grid operators. Where PEV batteries charge in accordance with grid needs and energy price signals, vehicle grid integration (VGI) solutions can provide frictionless support to both fleet managers and the grid. 

According to a new Guidehouse Insights report, VGI-based VPP capacity is expected to scale tenfold over the coming decade to achieve nearly 30 GW of capacity by 2029. Most VGI-based capacity will likely come from unidirectional optimized charging (V1G) capacity; optimized discharge from vehicle batteries back to the grid (V2G) are also anticipated to scale rapidly, providing substantial support to the grid. However, a significant customer perception is challenging the success of V2G grid support: fear of EV battery health degradation due to frequent and repeated grid discharge. 

VGI-Based VPP Capacity by Technology, World Markets: 2020-2029

VGI-Based VPP Capacity by Technology, World Markets: 2020-2029

(Source: Guidehouse Insights)

No Battery Lasts Forever, Few Last a Decade

An ongoing challenge in relying on EV batteries to provide grid services is the rate of degradation of PEV batteries due to a short life cycle or extreme environments that affect battery performance. An average EV battery has a life cycle of about 8-10 years, but this measurement varies depending on how drivers and fleet managers treat the battery and factors surrounding its routine use. For example, an EV battery is more likely to last longer if it is not continuously depleted to 0% charge or always charged to 100% capacity. A battery kept at around 65%-75% and at a moderate temperature can perform for longer than one constantly recharging from 0% to 100% every day. 

VGI implementers also note that the battery capacity cost might be less if batteries are kept at a mid-range of charge and moderate temperature. A low temperature environment slows the reaction of the battery. Similarly, high temperatures force the thermal management system to do more work, further depleting a battery’s charge capacity.

In contrast, customers and fleet operators might prefer their vehicles to achieve full charge, particularly as full battery capacity can combat persistent range anxiety. Grid operators and OEMs might need to educate customers about the intricacies of both EV batteries and managed charging programs before customers will grant access to their EV supply equipment or EV battery. 

Theoretical Physics Are in V2G’s Favor

In the case of V2G-based applications, many R&D pilots are exploring the effects of routine charge and discharge of an EV battery. The V2G market shows promise, and theoretical physics and early studies confirm that shallow cycling use cases (i.e., for frequency regulation) have less effect than do deep cycling use cases (i.e., for emergency backup power and demand charge avoidance found in vehicle-to-home and vehicle-to-building scenarios). However, a chasm between this knowledge and customer perceptions persists. 

Players along the supply chain have yet to find ways to continually reinforce these findings in a clear and confidence-boosting manner. Although R&D will continue to play a crucial role in supporting VGI-based VPPs and other grid services, V2G providers and their partners must invest heavily in communicating clear and concise language to quell customer concerns related to EV battery degradation.