How vehicle-to-grid technology could get past pilot stage

Vehicle-to-grid (V2G) technology — using parked electric vehicles (EVs) as grid batteries — is a no-brainer. Many cars are parked most of the day, which means their expensive batteries sit without payback. Using those batteries to stabilize up-and-down inputs of wind turbines and solar panels offers EV owners a revenue stream to cover plug-in cars’ extra costs. But tapping batteries also presents a host of technical, regulatory and financial challenges that have kept the V2G idea strictly one for pilot projects — until now.

U.S. startup Nuvve says it’s picked Denmark for the world’s first commercial V2G service. The company plans to start with a 30-car collection of EVs with batteries programmed and ready to feed power back to the grid for a few minutes per day. In return, car owners can earn as much as $10,000 over the life of their batteries. Potential partners include 1 million-customer cooperative utility NRGi and Danish transmission operator

Why are these developments worth keeping an eye on? Let’s examine a few reasons, as well as a few challenges that Nuvve and every other player in the V2G space faces.

Why Nuvve’s plan could work

Nuvve is choosing a low-stress way to tap batteries. The company isn’t asking its collected EV batteries for a lot of power. Instead, it’s targeting frequency regulation — that is, adding or absorbing small increments of power to keep grid frequencies steady and preserve power quality. In this case, batteries are usually tapped for 2 to 4 minutes at a time, promising vehicle and battery makers that deep and repeated discharges from V2G activity won’t shorten battery life and threaten warranties.

The technology has a track record. Nuvve’s technology comes from the University of Delaware, where lead researcher Willett Kempton and his team have tested it with EV drivetrain systems maker AC Propulsion, grid operator PJM, utility Pepco and demand response company Comverge. That seven-car test showed the technology worked to tap car batteries based on real-world utility commands, a nice proving point for a startup.

Nuvve is targeting the right market. Wind power provides much of Denmark’s power supply, but its wild swings from high to low power output gives the grid major intermittency and stability problem. At the same time, Denmark’s competitive power markets allow small-scale operators to play into frequency regulation markets. Globally, frequency regulation pays out about $6 billion a year, which could grow to $12 billion by 2020.

Why Nuvve’s plan might not take off

Nuvve needs more electric cars to work with. Its technology works better when electric vehicle and drivetrain manufacturers install hardware and software based on its licenses, though it could work with other vehicle batteries. Whether OEMs will build Nuvve’s technology into their vehicles remains to be seen, however. Nuvve’s current plans for 30 cars just barely meet’s minimum of 300KW to participate in frequency regulation markets. For U.S. grid operators like PJM, the minimum is about 500KW — about 50 to 100 cars, depending on utility regulations.

Nuvve hasn’t landed big partners yet. While Nuvve and other startups have set their sights on V2G commercialization in the shorter term, the big boys in the field — Ford and Microsoft and General Electric and Nissan, to name a few — are playing a long game. Plug-in cars are still on the horizon, meaning  that even “commercial” projects of today will be working with fleets not much larger than the test vehicles pumped out for big corporate and national EV projects, such as the big V2G pilot by IBM, Siemens and utility Dong Energy, to name one Denmark-specific example.

Still, Pike Research projects that electric vehicle sales will reach 1.7 million worldwide by 2015, with 640,000 in the U.S., 500,000 in China and much of the rest destined for European shores.Consider the collective power of just 1,000 cars — about 10 megawatts — as a grid resource, and ask yourself, would you pass up that market?

Question of the week

Can vehicle-to-grid technology succeed at a commercial scale?