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V2G Shuffle

Smart charging is just the start of the electric vehicle revolution.

Fortnightly Magazine - June 2010

about 10 cents per mile, for a 29 mpg economy car. The exact fuel price rises and falls depending on multiple factors, including OPEC cartel actions. Consumers have no way of knowing how much fuel will cost this summer, and they have almost no control over their transportation costs. Their only options are to drive less, or to buy more fuel-efficient cars.

A decade from now, assuming battery technology matures as expected, EV drivers will almost never feel like a pawn in a game of global cartels. When they’re not driving down the road, cars will be plugged into the virtual service station—the smart grid—which will keep them charged in a way that maximizes the value of system resources and the battery’s storage capacity. Fuel prices will be highly predictable and even controllable. In some cases, the driver won’t own the battery, but instead will pay a third party to manage the battery as part of an ongoing service agreement.

And the cost? Already today’s EVs run much cheaper than gas-powered cars do, in the range of 2 to 3 cents per mile. In some possible future scenarios, EVs actually might run for free.

Free Fuel

Of course there’s no such thing as a free lunch. However, in some cases the battery might prove to be more valuable to the smart grid than the cost of electricity to keep that battery charged. With a vehicle-to-grid (V2G) system, combined with time-of-use pricing, some users might get their batteries charged for free. Conceivably, some might even make money on the deal.

Last September, Delaware Governor Jack A. Markell signed Senate Bill 153 into law, requiring utilities to provide net metering for EV owners. And perhaps more than any other state, Delaware is getting ready to take advantage of that law. For the past few years, a pilot project at the University of Delaware has been testing the prospect of a V2G system, with a handful of electric cars and a large battery that simulates the behavior of a parking lot full of them. More than just testing the technical feasibility of V2G, the project is paving the way to integrate EVs into the wholesale electricity market.

As PJM CEO Terry Boston told Fortnightly ( see “ Dealing with Disruption – Electric Vehicles ), the system operator is compensating each EV driver $10 a day for the ability to tap into battery capacity for ancillary services—a handsome sum for a vehicle that on average will use less than $1 a day in electricity. The $10 figure is based on University of Delaware economic estimates of the value of the vehicle’s reactive power capacity for spinning reserve and frequency regulation. But eventually, as larger numbers of EVs roll onto highways, PJM expects the arrangement will evolve into a market approach, in which the ISO will call upon EV reactive power capacity based on market clearing prices. In other words, the PJM market will provide economic dispatch of EV storage resources in a liquid market to satisfy the grid’s reliability requirements—just as it does today for