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to 30 minutes dramatically improves the revenue potential of vehicles providing this service. When regulation resources are used appropriately, as we assume a maximum of 15-minute dispatch duration, as the capacity of the plug circuit always will serve as a binding constraint and thus dictate the potential annual revenue from providing this service. Larger circuits could be installed to address this constraint at a cost.
An issue that is not yet fully understood for storage resources providing regulation relates to the random nature of providing regulation services. As mentioned above, the storage resource would need to release energy on to the grid when a regulation up signal is received and absorb energy (charge) when a regulation down cycle is received. A prolonged period of regulation down, for example, could result in the battery pack becoming fully charged. In this case, the vehicle would be unable to provide regulation down if the need persisted. Related to this issue is what has been labeled the “dispatch-to-contract” ratio, which indicates on average what portion of the regulation reserves being held by the grid operator actually are deployed. 13 This has implications for the amount of energy throughput for an energy storage system providing this service.
Fig. 4 presents data from ERCOT comparing the amount of regulation being held in reserve versus what was actually deployed to correct the mismatch between supply and demand on a particular day. The AGC signals are given in 15-minute intervals, whereas in practice these signals are sent every few seconds. We assume that this 15-minute data is the average AGC signal during that interval. We are unaware of ISOs or RTOs that make actual AGC signal datasets available to the public. This data would be valuable to clearly understand AGC signal patterns, and their impact on a storage resource providing this service.
While Table 3 provides only revenue, the key question has to do with costs. Calculating the cost of providing these services includes both fixed and variable costs. The fixed costs include the additional cost to provide V2G functionality to a PHEV and the communication and control equipment necessary to allow remote dispatching of an aggregated fleet of PHEVs. The additional cost to allow V2G on the vehicle side should be minimal given that PHEVs will have most of the necessary power electronics onboard. The cost of a system to allow communication and control between the grid operator and a fleet of V2G PHEVs is yet unknown, but given the rapid development and reduced costs of these technologies we expect that this—when amortized over a fleet of tens of thousands of vehicles—would be minimal.
The variable costs resulting from PHEVs providing these services is a function of the energy throughput and the associated cost of battery degradation. We are confident that the variable cost of providing spinning reserves would be minimal, as these services rarely are used and when they are dispatched, it typically occurs for just several minutes. Using the experience of PJM given above, spinning reserves were deployed for only 21 hours during the entire year in