Two-way V2G EV charging gains traction

Bidirectional, or vehicle-to-grid (V2G), charging is revolutionising the way electric vehicle (EV) owners interact with the energy grid. This innovative technology allows EV owners to charge their vehicles at lower off-peak rates overnight and then sell the electricity back to the grid at a profit during peak hours. This not only offers a potential revenue stream but also enhances grid stability during high-demand periods.

In speaking with Reuters, Nick Woolley, CEO of UK software firm ev.energy, highlighted the significant potential of V2G technology. In collaboration with industry giants such as Siemens, Nissan, and Volkswagen, ev.energy is one of the pioneers of the practical application of this technology. According to Woolley, for short periods, a million EVs could supply as much power as a large nuclear power station, illustrating the substantial impact V2G could have on national energy systems.

Historically, V2G technology was largely theoretical, with the Nissan Leaf being the only EV capable of such functionality for many years. However, this landscape is changing rapidly thanks to advancements in smart electricity meters and artificial intelligence, alongside innovative modelling by energy companies.

The automotive sector is responding enthusiastically, with major players like Tesla, BMW, and Toyota planning to introduce V2G-capable models in the coming years. Notably, Chinese manufacturers such as BYD are also advancing in this area, supported by significant governmental backing to integrate V2G technology into China's energy strategy by 2030.

In contrast, in the United States, bidirectional charging remains experimental, with regulatory challenges, particularly in Germany, where the pricing of energy sold back to the grid is still being debated.

Despite its benefits, bidirectional charging comes with higher costs than conventional chargers, primarily due to the lower production volumes. However, initiatives like Octopus Energy's V2G tariff in the UK, which offers free charging to customers who keep their EVs plugged in overnight, are making this technology more accessible. Octopus Energy is planning to expand similar offerings to other markets, including France, Japan, New Zealand, and Texas, further demonstrating the growing acceptance and implementation of V2G technology.

Who gets the revenue?

Several automotive manufacturers are advancing V2G technology by establishing dedicated energy divisions to join software platforms, energy providers, and other stakeholders in the emerging V2G market. The precise profit margins are still uncertain; however, most of the financial benefits are expected to be passed on to EV owners. The intermediaries facilitating the sale of power to the grids might earn minimal profits per kilowatt, but the cumulative effect across millions of EVs could be substantial.

In the near future, General Motors (GM) is set to introduce a new electric Chevrolet Silverado pickup truck with the capability to power homes, leveraging the same underlying technology as V2G. By 2026, all GM EVs will feature bidirectional charging capabilities. Similarly, Ford has introduced its F-150 Lightning electric pickup with V2G capabilities.

GM is not only planning to sell energy directly to utility companies but is also looking to collaborate with aggregators who manage large pools of EVs to optimise power sales. Additionally, GM is forging strategic partnerships with major U.S. utilities, including Duke Energy, to enhance the integration of EVs into the national grid.

What it means for the consumer and the future

In a case study of sorts, Reuters spoke with Shilpen Patel, 39, from the UK, who has been using his Nissan Leaf in an early pilot scheme offered by Octopus Energy since 2020. Since doing so, he has found his annual household energy bill drop by around £700 annually, almost one-third of the total cost. “These savings have been pretty remarkable,” comments Patel.

As a step towards scaling up V2G technology, companies like Octopus are already providing grid-balancing services. These services help grid operators avoid the need to activate costly additional power sources by briefly reducing the power supply to EV chargers.

In Denmark, Monta offers around €8 per month to users of its charging app for contributing to grid balancing in certain markets, while Driivz employs similar strategies to help manage demand spikes on the Dutch grid. Volkswagen's energy division, Elli, led by Ingo Mueller, Head of Energy Solutions, is developing a trading platform in Germany for grid balancing. This initiative serves as a foundation for V2G and is set to either expand or integrate with partners in various markets.

In the United States, Nuvve is delivering V2G services for approximately 500 electric buses across several states. This is a feasible venture since these buses are frequently plugged in throughout the day and during school holidays. However, for passenger EVs, the key to consumer adoption will be through applications that offer accurate and appealing pricing models.

Platforms that can provide reliable AI predictions on the number of EVs available for grid services will likely attract more business from major energy companies. For instance, Duke Energy is currently conducting bidirectional charging trials with automakers like GM and Ford, looking to harness this emerging technology effectively.

Automotive companies' energy divisions often do not have the capacity to aggregate a sufficient number of EVs locally to sell power directly to utilities. Therefore, emerging platforms such as Kaluza and The Mobility House are stepping in to fill this gap by acting as intermediaries, pooling EVs from multiple brands. These intermediaries play a critical role in managing the grid load to prevent overburdening during periods of high demand and low prices.

Renault has established a partnership with The Mobility House, while Volvo is developing its own platform and collaborating with others, including Kaluza. Kaluza, in particular, is broadening its reach by working with several automakers like Volkswagen, Stellantis, Nissan, GM, Mitsubishi, and Porsche, helping them interface with thousands of utilities as an intermediary. This collaboration is crucial for integrating EVs into the energy market effectively.