Let's Talk About Vehicle-to-Everything (V2X)
Will turning EVs into revenue generating/cost savings assets save the day by reducing reliance on the grid?
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TL;DR
🚗 V2X is when you move energy from your EV to your home, a building, or the grid via a bidirectional charger.
💵 V2X creates opportunities for both revenue generation and cost savings depending on where you are sending your energy. Some savings have been to the tune of $2k per vehicle per year dependent on the state.
❌ Barriers to V2X adoption include bidirectional chargers price point, utilities upgrading their transmission lines to support V2G, and utilities willingness to buy back energy.
What is going on with the grid?
How does the grid work?
The utility grid is like a giant network of roads for electricity. Power plants generate electricity and send it through wires to homes, schools, and businesses. Imagine the power lines as highways, and electricity as cars traveling along them. When you turn on a light or charge your phone, you're tapping into this flow of electricity. The grid balances supply and demand in real-time, just like traffic lights manage cars at intersections. Sometimes, renewable energy sources like wind and solar contribute to the grid, acting like smaller roads merging into the main highways. The utility company, like the traffic department, manages and maintains the grid to ensure everyone gets the power they need reliably.
How will EVs impact the grid?
The US has committed to having 33M EVs on the road by 2030, but today we only have around 2.7M EVs. That means within 6 years there will be an ~11x increase in EVs in the US. Now let’s think about how this will impact the grid… on average, a household uses 30kWh of energy per day and EV owners use roughly 12kWh of energy per day to replenish their EV battery (a full charge would be closer to 60-80kWh). Adding one EV to a household is already equivalent to almost half the energy usage of a household, but still 12kWh per day doesn’t seem too extreme. If you think about 2030, that is 12kWh x 31.3M EVs that don’t exist today. The grid will need to support 375.6M kWh of energy per day — now that number seems a bit more extreme to me.
We need to be considering ways we can reduce the impact of EVs on the grid (hopefully with renewables). Keeping in mind that the average EV is driven 35 miles per day, V2X has the potential to step in and help.
An average EV battery has 40kWh of capacity, but some have as much as 100kWh. If you only use roughly 11kWh per day, then in theory, you have 29kWh of unused energy sitting in your vehicle. As I mentioned earlier, the average household uses 30kWh per day, so the leftover energy in your EV could power your home every single day. Now, if your vehicle isn’t plugged in all day, then you would need a back up battery system to store all of the energy. We can discuss that in another post, but I wanted to at least showcase the potential of the unused EV battery.
Note: most EVs drive roughly 35 miles per day, so the daily charge doesn’t have to be 0-100% for every charge.
What does V2X mean?
I have seen the term V2X represent two things: 1. energy moving from your vehicle to a different system that uses energy and 2. connected vehicles like leveraging telematics to connect your vehicle to other assets. For the purposes of this discussion, V2X is representative of the first use case: energy moving from your vehicle to something else. V2X can be broken down into three categories: smart charging, vehicle-to-house/building, and vehicle-to-grid.
Here is how I think about these three categories:
Smart Charging is software that strategically determines when to charge your EV — typically while energy is cheap during off-peak hours. V2X needs smart charging because that is vital on managing supply and demand peaks.
Vehicle-to-House (V2H) and Vehicle-to-Building (V2B) is the process in which you take energy from your EV battery and send it to your house or a building. In this scenario, houses and buildings are able to be powered without taking energy from the grid, which saves the home/building owner money and reduces reliance on grid uptimes.
Vehicle-to-Grid (V2G) is the process in which you take energy from your EV battery and send it back to the grid. V2G is a revenue generating process because you are selling your extra energy either directly to the utility or to the energy markets. This process has the most barriers, but I will get into those later.
What is bidirectional charging and how does it come into play?
Most EV chargers today are unidirectional, meaning the charger can only supply energy to the EV. Bidirectional chargers are mechanically different and are able to supply and receive energy.
A bidirectional EV charger is like a two-way street for electricity. It not only charges an electric car but also allows the car's battery to send electricity back to the charger and into the house, building, or power grid. Think of it as a traffic lane that can switch directions. When the car's battery is full or not being used, it can share its stored electricity with homes or the grid during peak demand or emergencies. This helps balance energy supply and demand and supports renewable energy integration.
Now, I am going to introduce two terms that are important to understand when it comes to bidirectional charging: AC and DC electricity. AC (alternating current) is the form in which energy moves from the utility to your house, but an EV only accepts DC (direct current).
You can transform AC to DC and DC to AC with an inverter. An inverter converts DC electricity, like that from solar panels or batteries, into AC electricity used in homes and businesses. It ensures compatibility between renewable energy sources and the electrical grid, enabling efficient and safe utilization of power from various sources. When you want to send energy from your EV back to your home or the grid, it needs to go through an inverter (or converter), which will be in-vehicle.
Making an EV bidirectional compatible involves integrating bidirectional charging technology into the vehicle's design and electrical system in the following ways:
Hardware Integration: Equip the EV with a bidirectional onboard charger that can handle power flow in both directions.
Communication Protocols: Implement communication protocols that allow the EV to interact with external systems, such as smart grid infrastructure or home energy management systems.
Safety Measures: Incorporate safety features to prevent damage to the EV’s battery and ensure safe operation during bidirectional charging and discharging.
Regulatory Compliance: Ensure that the bidirectional EV charger meets relevant safety and regulatory standards to ensure interoperability and compliance with electrical codes.
User Interface: Provide users with intuitive controls and feedback mechanisms to monitor and manage bidirectional charging operations, including energy flow direction and power levels.
Who are the key stakeholders?
Bidirectional charging requires buy-in from the following stakeholders: EV owners, vehicle OEMs, charger OEMs, and the utilities. There is a lot of complexity here, as well as bidirectional charging use cases that are easier to adopt without grid integrations like V2B and V2H. V2G requires buy-in from every single stakeholder including grid upgrades by the utility and the utilities willingness to pay a market competitive price for the unused energy.
Utility companies may be blockers to V2G adoption because it requires additional investment on their end to upgrade their systems. Utilities will have to upgrade transformers to support bidirectional energy flow from EVs which requires a comprehensive approach that considers capacity, efficiency, voltage regulation, grid integration, and safety considerations to ensure reliable and efficient operation within electrical distribution systems.
The government is generally supportive of grid modernization via bidirectional EV charging, but the adoption of this is going to be a state by state and utility by utility case.
What are the pros and cons to V2X?
Pros
Can generate revenue via energy arbitrage (sell to utility or energy markets)
Can save on your energy bill if V2H or V2B
Reduces reliance on the grid
Helps reduce capacity constraints for the grid
Cons
Reliant on utility participation
Requires upgrades to the grid
EV owner needs to invest in a bidirectional charger
The EV needs to be bidirectional compatible
May void EV battery warranties (TBD on this one)
V2X companies to watch (varying stages):
Fermata Energy (Post-Series A, Charlottesville) - developing bidirectional EV chargers and software for charge/discharge management.
Synop (Seed, New York City) - developing charging management software for commercial EV fleets.
Bidirectional Energy (Pre Seed, San Francisco) - marketplace to purchase a bidirectional charger, then Bidirectional Energy oversees installation + V2X management.
dcbel (Series B+, Montreal) - operates and manages a virtual power plant within the home.
Wallbox (Public, Barcelona) - smart electric vehicle charging and energy management company.
Nuuve (Public, San Diego) - accelerating the electrification of transportation through its proprietary V2G technology.
IoTecha (Series C+, New Jersey) - smart charging infrastructure platform that manages V2G.
Jedlix (Series A, Netherlands) - white labeled virtual power plant for energy asset management.
SwitchDin (Series A, Australia) - operates a micro-grid management platform.