Vehicle-to-Grid Will Accelerate European Grid Decarbonization with Less Investment

To successfully transition from fossil fuels to a greener grid, flexible storage capacity will be required to help balance out renewable generation’s spikier production. Vehicle-to-grid (V2G), a technology that allows EV batteries to provide power back to the grid, can contribute significantly to this flexible storage capacity.

Integrated Energy Model – Europe: V2G Forecast

To determine how much flexible storage capacity V2G could add in Europe, Guidehouse Insights used its proprietary Integrated Energy Model – Europe (IEM-E) to compare the base scenario with a scenario incorporating heavier V2G adoption. IEM-E is a discounted cash flow model that optimizes for total system cost based on end-use demand, considering planned constraints on maximum carbon emissions, minimum renewable electricity input requirements, caps on fuel supply, technologies installed, and other factors. Based on planned European Union targets and market trends, the base scenario has a minimum renewable electricity generation share of 42.5% by 2030 and 70% by 2035, with additional constraints to decrease annual carbon emissions. The V2G scenario includes additional capacity to determine an optimized solution.

How IEM-E Works

Source: Guidehouse Insights

Full V2G Adoption Would Increase Storage Capacity by 920 GW 

Expanded V2G adoption in Europe would have a dramatic impact on a number of different preferred outcomes. Compared with the base scenario, 100% adoption of V2G by 2035 (assuming an 18% capacity factor to account for vehicles being driven throughout the day) would reduce annual emissions by 53% and the cost of energy by 31%. Electricity costs could be as low as €0.079/kWh (real price) by 2035, compared with €0.114/kWh in the base scenario. Under the V2G scenario, fossil fuel use would be reduced by 48%, wind capacity boosted by 33%, and flexible storage capacity increased by approximately 900% by 2035. In aggregate, 920 GW of storage would be added to the grid.

V2G vs. Base Scenario by 2035

Source: Guidehouse Insights

V2G enables this additional capacity because most household vehicles are not being driven most of the day. Additionally, overnight idle time for fleets owned by delivery operators, bus companies, and airport transports can be employed to store excess electricity. Utilities can create V2G incentive programs to avoid needing to invest in additional grid storage capacity, rather than having their customers manage the excess need. One other innovative application could be long-term car parks in airports, where customers could get a discount or cash back if they sign up for the V2G scheme. In addition, charging and discharging could be optimized with the help of smart platforms, with set factors to achieve maximum application efficiency.

V2G Can Help Solve the Storage Problem If Changes Are Made Soon

V2G realization requires the adoption of various changes in business models, community/fuel station infrastructure, and utility tariff schemes.

These IEM-E scenarios assume that incentives are aligned, with the maximum forecast achievable when car owners and energy providers cooperate fully. The IEM-E is built to forecast scenarios that aid decision makers in identifying different methods that could be employed to solve for specific outcomes.

Interested in learning more about EVs, V2G, and grid optimization? Check out Guidehouse Insights’ Electric Vehicles and Vehicle Charging services for more information.