Plug-in electric vehicles available today can help grid operators manage the grid—though few in use do. This is not too much of a problem now, but as more plug-in electric vehicles populate roads, utilities are likely to become increasingly concerned with managing and making use of these mobile assets.
Today’s plug-in electric vehicles represent a significant increase in electricity demand that, if unmanaged, could cause problems with distribution-level transformers and could drastically increase demand during peak hours when EV owners return from work and plug in their vehicles. The effect would force utilities to make upgrades to distribution networks that would likely be passed on in the form of higher rates to consumers.
Conversely, plug-in electric vehicles also represent an increase in load that could be used to capture renewable electricity generation and help balance generation with demand, theoretically making electricity marginally cheaper and cleaner.
Vehicle grid integration (VGI) technologies, which have been in development since before the Volt and LEAF were first sold in the Unites States, are designed to accomplish this purpose.
Now that the market for plug-in electric vehicles has begun to firm with global sales surpassing 320,000 in 2014, pilots testing VGI technologies are emerging with greater frequency.
Plug-in electric vehicles participating in VGI services are expected to provide nearly 4.2 GW of power to grids globally by 2024 under an aggressive scenario.
According to a recent report from Navigant Research, worldwide VGI services revenue is expected to total $68 million from 2015 to 2024.
“Now that the market for plug-in electric vehicles has begun to solidify, with global sales surpassing 320,000 in 2014, pilots testing VGI technologies are emerging with greater frequency,” says Scott Shepard, research analyst with Navigant Research. “This is a key development for the VGI market because plug-in electric vehicles represent an increase in load that could be used to capture renewable electricity generation and help balance generation with demand, theoretically making electricity marginally cheaper and cleaner.”
The initial entrants to near-term markets for VGI are expected to be energy aggregators and major fleets, according to the report. Aggregators will include VGI-enabled fleets within energy generation portfolios to access markets with the highest returns, leveraging the capital necessary to place significant power capacities into local grid service areas.