Analysis of the potential value of vehicle-to-grid for fleet owners (UK)

Vehicle-to-Grid, or V2G, is a hot topic in the energy world and interest is only going to increase as more EVs drive our roads, and more EV manufacturers provide support for V2G. But what exactly is it and why are folks getting so excited about it? 

In this post we take a first pass at tackling those two questions, as always using Gridcog software to try and take an objective look at things. 

Background

V2G is the process of using the energy stored in an electric vehicle's battery for purposes other than moving that vehicle from A to B. 

More specifically, the energy can be used to provide power to the site to which the EV is connected, so reducing that site’s dependence on grid-supplied energy, and can extend through to exporting energy back to the grid to provide local support to the network or to capture value in the market, for example by selling that energy into the local wholesale market or providing frequency control services.

V2G is an emerging technology and not yet proven at scale, but the appeal is unquestionable. Batteries within EVs are capable of storing significant amounts of energy and one thing we’re going to need a lot more of in the energy system of the future is storage, or all shapes and sizes. 

Just like the vehicles of today (or yesterday), EVs sit idle for much of the time and so there’s potential to increase the utilisation of these expensive lumps of metal and plastic. If you put large storage capacity together with idle vehicles you get the potential to leverage that storage for other jobs. 

A subset of electric vehicles that are especially promising in this regard are fleets, particularly fleets of larger vehicles like buses, delivery trucks or rubbish trucks. Fleets are also interesting because they’re owned and controlled by the same operator, parked up in depots, will often have well-established usage patterns and will have decent sized grid connections meaning the potential to move more energy more quickly. 

So that’s the theory, but how might this play out in practice, and is it worth the bother? 

To explore what value V2G might be able to provide I’ve used the Gridcog software to cast back in time and simulate what a small fleet of EVs, in this case rubbish trucks, might have been able to deliver in terms of additional financial benefit to their owner over the last four years. 

To do this we have a baseline scenario with the fleet charging as normal, with charging optimised to reduce energy costs for the site operator, and then a second scenario this time with V2G enabled. 

The Model

• The project is modelled over four years from 2019 to 2022 inclusive.
• We have a small fleet of 8 rubbish trucks each with a battery capacity of 300kWh and a daily energy requirement of 250kWh on days the trucks are operating.
• Half the fleet is out at work from 5am to 12noon Monday to Friday. The other half of the fleet is out from 12noon to 8pm
• The depot has 5 x 100kW chargers
• The depot’s grid connection allows max import and export of 500kW
• The depot, located in Birmingham, is directly exposed to the historic balancing price and also incurs charges for using of the distribution network (National Grid West-Midlands LV Band 4) and transmission network (triads)
• Vehicle batteries are never allowed to discharge below 30% state of charge
• Capex costs are ignored, this is just focusing on potential value. In reality there will likely be additional costs associated with enabling V2G

The Results

• Under our baseline scenario where the fleet charging is optimised to minimise energy supply costs, but where V2G is not enabled, total EV charging costs over the period total £175,000
• Under our V2G scenario the EV charging costs turn positive, generating revenue of £24,000 – so our V2G strategy delivers £200,000 more value than our baseline, or £25,000 per vehicle. 

• Not surprisingly the bulk of the benefit is captured in 2022, and to a lesser extent 2021, as market turmoil has seen eye watering balancing costs, particularly over winter months. 

‍

• Network costs increase in the V2G scenario to £70,000 from £53,000 as a result of additional energy import.
• From an energy and battery workload perspective, total energy moved through the fleet of batteries doubles, from 2,245MWh in our baseline to 5,608MWh, with V2G. You can see this illustrated in the interval data below for a week in January 2019 and is particularly apparent over the weekend when the trucks are otherwise parked up
  

‍The Wrap

This is a deliberately stripped back look at the potential of V2G and there are plenty of additional considerations that would likely constrain the commercial upside to some extent, but I think it’s also a powerful illustration of the potential for the technology. 

The energy system of the future will inevitably require a lot of storage. It will also involve much more participation from the demand side of the market. In V2G you have both elements coming together by aggregating EV batteries into serious energy assets. Fleet owners will no longer just be fleet owners, in the future they’ll be key players in the energy system. 

This will be good for the market by providing storage where it’s arguably at its most useful, deep in the distribution network, at the same time providing a valuable new revenue stream for fleet operators when their vehicles are otherwise parked up in the depot. Win win.