Updated: Utilities are deathly afraid that too many electric vehicles could one day plug into their grids and cause rolling blackouts. Rapid Electric Vehicles (REV), a two-year-old, Vancouver-based startup that already has projects with a handful of utility, military and municipal customers, is here to help.
REV CEO Jay Giraud told me at the Techonomy event in Tahoe, California last week that REV is has deployinged what could be the largest vehicle-to-grid project in the world with an undisclosed Canadian utility. That utility (which is in a deregulated energy market) agreed to have REV convert part of its vehicle fleet from gas to all electric. REV then owns and manages the fleet’s batteries, and REV provides the software and hardware to manage the battery charging. Giraud says that this utility customer has a near-term target to incorporate 100 electric cars in its fleet, and one day could buy operate as many as 10,000 electric cars.
While the market for electric vehicle network management could one day be massive — estimated to pull in $297 million in the U.S. by 2015 according to Pike Research – the vast majority of utility-smart charging projects are research experiments, and involve only a couple cars. Even a project from the so-called father of vehicle-to-grid technology — Willett Kempton, professor and lead researcher of V2G research at the University of Delaware, who has been working with V2G since 1997 — only has six cars in it.
Giraud tells me that REV’s initial business model to do the conversions itself, and own and manage the batteries of the fleets, stems from the fact that there are so few electric vehicles on the market right now, and in particular, because no one else in the distribution chain wants to own all of the batteries, says Giraud. REV also is able to have several revenue streams: a fee for the vehicle conversion, a subscription for battery rental, and a subscription to its battery management service. Eventually, REV wants to do deals with OEMs to embed its technology in fleet vehicles, like the smaller fleet-focused Smith Vehicles of the world, said Giraud.
In contrast to the vision of consumer’s electric vehicles getting outfitted with these management systems, REV is just targeting fleets. Giraud says large auto makers like Nissan won’t allow V2G into its consumer cars because they think it will break their warranties. Consumers also might balk at V2G services in their cars, because of the notion of range anxiety.
Giraud thinks that one of the biggest applications of its vehicle management service could be as a frequency regulator. The power grid works by constantly balancing supply and demand and must be kept at a 60 Hz frequency, but that’s a complex and difficult task given today’s grid has little energy storage capacity. For example, PJM, a regional transmission organization serving a population of 51 million, commonly pings fossil fuel-burning generators to control regulation as often as hundreds of times per day.
In theory, REV’s networked EV fleet could act as that distributed energy storage layer to regulate frequency. Vehicles are commonly used less than 20 percent of the time, and the rest of the time sit parked at homes and offices. Kempton from the University of Delaware and his team calculate that in areas with deregulated electricity markets, that type of regulation service could have an average value of $30-$45 per MW per hour.
Money has been flowing into utility energy storage projects as of late. AES Energy Storage, a subsidiary of power giant AES, is proposing to use stationary lithium ion batteries (from A123Systems, which also makes batteries for EVs) for a 20 MW energy storage and frequency regulation project. Last month, the DOE says it offered AES its 14th loan guarantee — a $17.1 million conditional commitment — to build the project.
So far REV has been operating on boot-strapped funds, but Giraud tells me they’re in the process of raising their Series A first round of funding. Other V2G players include GridPoint (which is a partner of REVs), and IBM. Accenture and SAP are also interested in the data analytics piece of V2G.
According to John Gartner of Pike Research, V2G will kick off in earnest in 2015, after the automakers have been selling EVs on the market for a half decade. By then, the research firm predicts that 800,000 plug-in vehicles will be sold, and the software and networked communication layer will be ready to manage EVs in unison helping aid the grid — and keeping utility operators minds at ease.
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Image courtesy of REV.