What Is Vehicle-to-Grid (V2G) and Why Does It Matter?
Vehicle-to-Grid, or V2G, is an innovative technology that allows electric vehicles (EVs) to serve as more than just modes of transportation. Through bidirectional charging, V2G allows EVs to send power directly back to the grid, helping to stabilize power supplies and reduce peak demand. There are other applications for bidirectional chargers, including connecting vehicle to home and vehicle to buildings.
The EPA highlights that the transportation sector contributes 29% of U.S. greenhouse gas emissions, with diesel-powered vehicles creating serious environmental, socio-economic, and health challenges. EVs present a powerful solution, capable of slashing greenhouse gas emissions by up to 70% under optimal scenarios, according to a study by NRDC.
As EV adoption accelerates and electricity demand rises nationwide, the capabilities of V2G offer transformative opportunities.
Why Use EVs as Power Sources?
EVs, particularly those with large batteries like electric school buses, have substantial storage capacity. They can act as backup power sources during emergencies, supply power during peak demand times, support load flexibility, support renewable and decentralized energy resources,. All of these benefits will help defer costly upgrades to grid infrastructure and contribute to rate affordability.
For example, the U.S. has around 2.1 million battery electric vehicles, which could provide up to 126 gigawatt-hours of storage capacity—an untapped resource that could be pivotal in meeting future energy needs.
Challenges Utilities Face with V2G Adoption
Despite the potential, widespread adoption of V2G technology faces some challenges:
1. Low Uptake of EVs & Bidirectional Chargers
Utilities note that EV adoption is still low in some areas and expect a gradual shift from diesel to electric vehicles, arguing that current market demand and financial incentives don’t yet support widespread V2G implementation.
Furthermore, the vehicles themselves have to enable bidirectional capability, and currently not all OEMS provide them with it. Most EVs on the road use unidirectional chargers, which can only pull energy from the grid, not send it back. While some automakers are beginning to produce bidirectional chargers, they’re still costly, and adoption remains low.
2. Difficulty in Quantifying Benefits
Utilities struggle to quantify the exact benefits of V2G because most V2G projects are still in the pilot phase. Without data on large-scale implementations, it’s tough to predict the economic and operational advantages V2G could offer, such as savings from reduced peak demand or increased resilience against grid outages.
3. Infrastructure and Technical Limitations
The U.S. grid, particularly in older regions, isn’t fully prepared to support the bidirectional energy flows required by V2G technology, making infrastructure upgrades essential yet costly. Further complicating matters, a lack of standardization and interoperability among bidirectional chargers from different automakers adds challenges to grid management. Many customers also worry that frequent discharging to the grid could shorten battery life; however, studies suggest that most batteries outlast the vehicles they power, and users can control discharge levels to help maintain battery health.
4. Lack of Education and Buy-In From Regulators
V2G technology is still emerging, and currently lacks clear tariffs or regulations. Regulators face challenges in establishing effective guidelines, certifications, and rules for tariffs and interconnectivity.
5. Lack of Incentives
There is currently no established compensation structure for bidirectional charging systems, making it unclear how to classify the electricity they provide. These systems don’t operate like solar (and thus don’t qualify for net energy metering rates) nor like stationary storage, which complicates their integration into existing demand response and battery storage rate structures.
6. Data Limitations
Utilities rely on third-party aggregators to enable interconnected and interoperable systems (including vehicles, grids, and DERs). However, stringent data privacy standards in several U.S. regions present challenges for utilities in sharing information with third-party providers, such as software companies.
What Can Be Done to Tackle These Barriers?
There are a few ways to help V2G reach its potential:
1. Education and Outreach
Original Equipment Manufacturers (OEMs) play a crucial role in educating customers about the long-term benefits of bidirectional chargers and enable vehicles to use them, including cost savings, lower total ownership costs, and improved grid resilience and stability. They can also showcase successful pilot programs and case studies to boost customer confidence and gradually increase demand for bidirectional-capable chargers.
2. Research and Development
Federal and state agencies should invest in R&D to lower bidirectional charger costs. Public-private partnerships can also help make chargers more affordable and accessible. As production increases and costs drop, V2G technology will become more feasible, encouraging OEMs to add bidirectional capabilities to more EVs.
3. Establishing New Tariff Regulations for V2G
Regulators can start tariff proceedings tailored to bidirectional charging, setting clear guidelines for certifying and regulating V2G technology. This should include updating billing systems, establishing customer protections, and developing new compensation models to reflect V2G’s unique benefits.
4. Establishing Data Privacy Guidelines
Data sharing between utilities and third-party aggregators is key for V2G interoperability. Regulators should create guidelines that balance privacy with accessibility, setting protocols for data sharing that comply with regional privacy standards and support V2G functionality.
5. Standardization Efforts
Automakers, charger manufacturers, and regulatory bodies should develop universal standards for bidirectional charging. This will make it easier for different EV models and chargers to interact seamlessly, simplifying V2G integration.
6. Address Battery Degradation Concerns
Battery wear is a key concern for customers in V2G programs. Utilities can address this by offering customizable options, allowing customers to set limits on how much power they discharge. This gives customers control over battery usage, easing worries about wear and extending battery life.
7. Incentives for Early Adoption
Offering financial incentives to encourage customers to participate in V2G programs can offset the higher cost of bidirectional chargers and provide users with a tangible return on their investment.
The Road Ahead for V2G Technology
Utilities across the country such as National Grid, SDG&E, BGE, PG&E, and Dominion Energy are already running V2G pilot programs, allowing electric school buses and other EVs to discharge energy back into the grid. These projects are beginning to provide data and insights that could support larger-scale V2G adoption.
Expanding beyond the grid, Vehicle-to-Everything (V2X) offers additional possibilities, allowing EVs to power homes, buildings, and other systems, enhancing energy resilience and providing flexible solutions for managing community energy needs. To realize these broader applications and unlock the full potential of V2G and V2X technologies, a collaborative effort is required.
For V2G to become widely accessible, industry, government, and utility companies must work together to overcome barriers and drive adoption. Automakers can advance this effort by increasing the production of bidirectional-capable vehicles, while regulators play a crucial role in establishing supportive policies and incentives to drive V2G integration.
As these partnerships and innovations take shape, V2G has the potential to revolutionize how we think about energy and transportation. By enabling EVs to serve as more than just vehicles, V2G can help create a cleaner, more resilient energy future, benefiting communities, utilities, and the environment alike.
