Hidden Behind-the-Meter Batteries May Lurk in Your Garage

Global sales of light duty plug-in EVs (PEVs) reached over 1.5 million in 2019, and despite COVID-19-related impacts, Guidehouse Insights anticipated that PEV sales would just clear 2.5 million by the close of 2020. PEVs represent a significant energy system decarbonization opportunity through their ability to provide vehicle grid integration (VGI)-based grid support. While VGI-based virtual power plants (VPPs) can improve grid reliability by supporting peak demand management and retail or wholesale market capacity, these vehicles can also support resiliency efforts in the home or workplace.

VGI is often segmented into unidirectional and bidirectional smart charging:

• Unidirectional smart charging (V1G) modulates a PEV charging rate in response to operator signals.
  
• Bidirectional smart charging (V2G) occurs when the PEV not only modulates its charging in accordance with operator signals but also supplies power back to the grid when called upon.
  

V1G will remain the prominent facet of VGI-based VPP capacity over the coming decade; the technology proves out in physics and economics. However, regardless of whether charging signals are passing through the PEV charging point or communicated directly with the vehicle itself, the electrical connection in most home, multifamily, and workplace settings must move through the respective building.

Enter V2X

If a PEV can supply the grid through a building connection, what prevents it from serving as a behind-the-meter battery? Vehicle-to-home (V2H) and vehicle-to-building (V2B) advocates stress that these applications (collectively, V2X) may gain more near-term traction than V2G due to the absence of open market options for EVs today.

These applications could support populated buildings during grid outages, providing near-immediate resilience. Batteries could be tethered to essential appliances (such as refrigerators or critical light fixtures) to support comfort. During peak demand events, customers without an immediate trip planned might be able to discharge power from their battery to their house to reduce the risk of demand charges or peak prices where applicable. A component of a miniature home or building-wide microgrid, vehicle batteries could support efforts to island from the grid (particularly when acting as a fleet).

V1G, V2G, and V2X Schematic

(Source: Guidehouse Insights)

Is V2-Anything Worth the Cost?

Customer perceptions still challenge the fundamental components of all V2X solutions. Concerns of battery degradation are slowing market pickup of such applications. Other hindrances include lack of strategically placed charging infrastructure, traditional utility business models, proprietary technology, and additional interconnection costs and requirements.

Theoretical physics supports the deployment of V2G, sometimes over V2X depending on discharge parameters. While global pilots are testing the energy market economics with some success, others argue that the economics won’t play out:

• Some analysts and industry experts argue that V1G alone can suffice, capturing grid excess with vehicle charges and managing constraints by halting the PEV charging process. Adding capacity back to the grid might not provide significant grid support to merit implementation costs.
  
• Other stakeholders, including Guidehouse Insights, believe that V2X applications won’t overtake V2G as the future market opportunities for V2G are simply too great. For example, with the opening balancing market opportunities across Europe and parts of Asia Pacific and FERC Order No. 2222 in the US, the economics may favor V2G over V2X, offering customers greater revenue earning potential.
  

V2X applications won’t hinder the evermore popular deployments of behind-the-meter batteries for building-level resilience. However, as we look to strong global decarbonization mandates and push for EVs to eclipse fossil-fueled vehicles, creative V2X solutions should remain a tool in the energy industry’s toolbox to aid in the already unrestrained energy systems transformation.