Vehicle-to-grid: Where’s the smart money?


Last year Nuvve and EDF launched a joint venture called Dreev in a bid to scale flexibility from EVs.

Operating across UK, France, Germany, Belgium and Italy, its aim is to roll out vehicle-to-grid (V2G) commercially while enhancing smart charging, or V1G services.

Like any emerging technology, UK trials to date have shown V2G is hard work to get started. It requires multiple technical and commercial strands to come together.

Hardware availability and cost for bi- directional chargers has been a blocker in the industry, says Paige Mullen, from Dreev’s London office. To address it, Dreev recently tendered to procure thousands of units.

Another big challenge is around vehicles. While EDF has partnerships with PSA
Group and Nissan, EVs from a range of manufacturers must become V2G compatible to achieve a truly mass market. A shift from DC-only to both AC- and DC-charging vehicles, will necessitate onboard V2G chargers, providing more options for customers to participate in V2G.

However, European OEMs seem to be coming around to the idea, with the likes of BMW conducting trials and VW chief strategist Michael Jost stating earlier this year that the world’s biggest carmaker wants 350GWh of storage at its disposal by 2025.

Revenues: broader than FFR

A 2019 study by Cenex suggested £400 per vehicle may be the upper annual revenue limit for providing V2G services, with the bulk coming from delivering firm frequency response (FFR), which National Grid ESO procures to help keep the grid stable at 50Hz.

For EVs, “there are still some barriers to entry into FFR,” says Mullen. One is metering requirements. “They are quite expensive for aggregated assets,” says Mullen. “It’s not always feasible to install these industrial grade meters at every single charging unit, particularly when looking at V1G.”

Meanwhile, many chargepoint operators cannot yet provide the required granularity to enable a 2 second response time, the minimum required for FFR in the UK.

Mullen thinks these could preclude V1G smart charging from frequency response
if regulations do not evolve. She believes dedicated V2G chargers and operators could ultimately bid for those contracts, but says it’s not the only game in town. That contrasts with the 86 per cent stated by Cenex’s 2019 study (though Cenex more recently published research to show V2G provided far wider non- cash benefits).

For now, before regulatory changes come into effect, much of the potential value is from behind-the-meter optimisation, says Mullen. For example, using vehicle batteries deliver energy back into buildings to avoid peak charges and charging cars when energy surplus is available or at cheaper tariff times.

The aim is to combine those revenues with wholesale power market arbitrage, though energy markets and regulations will need to adapt to aggregators with new technologies to maximise the value of V2G, says Mullen.

Balancing local grids

Mullen thinks the emergence of DSO flexibility markets – where distribution network operators pay third party distributed asset owners to keep their grids running smoothly instead of adding copper – are starting to become feasible opportunities and will reduce grid infrastructure investments.

DNO requirements are highly location- specific, making them advantageous for some customers, says Mullen, and some are already starting to signpost flexibility requirements across their networks.

“DSO flex wouldn’t necessarily be a standalone business case [for V2G],” says Mullen. “But it is a complementary revenue stream, and the market is starting to develop in the UK.”

Most importantly, she says, the DNOs “have designed their markets with smaller-scale assets, such as EVs in mind; the metering and data requirements do not necessarily exclude them”.

Get paid to charge

Another potential V1/V2G revenue stream is ‘demand turn up’; charging cars when there is too much power on the transmission or distribution system. National Grid ESO has faced challenges in recent years from low summer demand and high solar output, but this year’s Covid-19 lockdowns presented exceptional circumstances.

Demand was 15-20 per cent lower than normal, and Grid had to work much harder to keep the system stable. It is paying distributed generators to stop exporting renewables on to the system as well as paying batteries and businesses to use more power – a service EVs could readily deliver.

National Grid ESO plans to run the system on zero carbon sources whenever possible by 2025. To do that, National Grid says it will need much more flexibility.

Who should consider V2G?

“Any business that has vehicles parked for long periods at a time might benefit from V2G,” says Mullen. “It’s important to consider V2G technology and benefits at an early stage. Even if businesses do not do it now, they should set up charging infrastructure and car parks to be V2G ready,” she says.

“Usually there is a significant economic benefit to adding at least some proportion of V2G [to the mix],” she adds.

“Having that flexibility allows you to better optimise connection capacity and means you can avoid reinforcements. Larger business usually have variable tariffs that reflect peak prices, and vehicles can help to save them a lot of money.”

eFlex: London fleet V2G trial

Nuvve is involved in E-Flex, an InnovateUK-funded V2G trial that includes the GLA, TfL, Cisco, Cenex, Imperial College London and E-Car Club.

Gnewt Cargo is the largest fleet involved. The Menzies Distribution-owned firm operates 70 modified electric vehicles and has deployed 10 bi-directional chargers alongside smart chargers at its East London depot.

It’s still early days. “We’re doing level one stuff, basic profiles, balancing with the other units,” says Nuvve’s Paige Mullen. But the Gnewt deployment is starting to provide real life data and insight about the balance between energy and fleet needs.

“Gnewt is a very good use case, because they have a long dwell time, so we can test the periods where we can make the most from V2G,” says Mullen. “On the flip side, Gnewt relies on these vehicles every day, so the batteries have to be up to the required level.”

Meanwhile, E-Flex is providing further insight into the co-ordination required between building, energy and fleet managers to find the optimal mix, which is bespoke to each site. “That is a good thing to start working on early, and not in silos,” says Mullen.

Early engagement with DNOs is also key, she says, given V2G chargers will require signoff by an onsite witness. At Gnewt’s site, that took five months.

“The grid connection and capacity issue needs to be streamlined – and I think DNOs are realising that,” says Mullen. “Right now, it’s not scaleable.”

V2G: Why only Nissan?

The V2G market is largely restricted to Nissan vehicles at present. Nissan uses the CHAdeMO charging protocol, whereas most European carmakers use the Combined Charging System (CCS), which does not currently enable V2G, though the body promoting CCS, CharIN, said last year that the standard will support V2G by 2025. Industry, however, may move faster. Meanwhile, Mitsubishi PHEVs also use CHAdeMO, but their smaller battery capacity limits their value.

Tesla preparing for V2G?

Tesla Motors was granted a UK power generation licence in June. It plans to build a virtual power plant using its ‘autobidder’ platform. More in hope than expectation of a response, The Energyst asked Tesla if it planned to bring EVs into the platform, alongside its stationary battery storage units. But the carmaker has not ruled it out, and there are reports that the Model 3’s onboard charger is V2G compatible.

V2G benefits ‘bigger than cash’

A government-funded report published in June suggested non-cash benefits from V2G would exceed revenues from grid balancing and power trading.

Cenex said its report, ‘A Fresh Look at V2G Value Propositions’, is the biggest survey to date of V2G experience across Europe. It looked at UK trials involving Nissan, Ovo, Octopus and Eon, as well as international projects.

While there is money to be made from flex, analysts identified four main areas of wider benefit:

  • Extended battery management – lowering the lifetime cost of home and EV power equipment, through added intelligence and control
  • Adding network resilience, as a back-up power source and a shield against brown-outs (a main motivator in Japan, the study found)
  • Personal Net Zero – linking with household renewable generation and energy efficiency
  • Green engagement – V2G as a motivational step for drivers as part of broader environmental engagement.Chris Cox, Cenex’s head of energy infrastructure, said those touting V2G should push the broader benefits.“V2G shows huge promise, but recently has been reduced to a tool for making money from trading,” he says. “This study does a great job of re-considering its true potential”.

Free V2G kit: Nissan drivers needed

Western Power Distribution is attempting to drum up participants in a vehicle-to-grid trial by offering free bi-directional charging systems to participants.

The trial is part of its Electric Nation innovation project. WPD aims to recruit 100 drivers to commence trials by March 2021.

Applicants need to have a Nissan EV with at least 30kWh battery capacity and off road parking. They can expect to earn at least £120/year from providing grid services, and get to keep the £5,000 charging system.

Details at

Free download: The 2020 EV report

This article is one of a number of in-depth interviews conducted for The Energyst’s new 2020 EV report. It contains expert insight across a range of sectors, plus a survey of more than 300 firms around EV charging infrastructure plans.

Sponsored by Arup, EDF, Good Energy, New Motion and Total Gas & Power, the report also includes views from: Arval, Cenex, DPD, Dreev, Engenie, ev.energyHitachi Capital Vehicle Solutions, Mitie, National Grid, Nottingham City Council, the John Lewis Partnership, TLT, UPS and Western Power Distribution. Download the report here.


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