The InnovateUK V2G demo projects – 18 months on
Published October 2019
It is now 18 months since the UK Government announced £30 million of funding for 8 V2G projects and 13 feasibility studies, putting the UK at the forefront of V2G activity globally. Since then new hardware suppliers have entered the market, over 100 V2G-enabled chargers have been installed in the UK and the V2G-hub has been launched. In this blog Everoze partner Paul Reynolds reviews progress following a fascinating InnovateUK knowledge sharing day.
My five key takeaways from the day:
1. There is (some) value in V2G
The demonstration projects have crunched the numbers and the potential value for EV owners from V2G (over and above smart charging) is estimated to be £60-200/charger/year. This broadly aligns to our own estimates. This value is highly dependent on: i) the plug in time available ii) the revenue stack and price assumptions used, and iii) the technical dimensions of the car and charger. This value is clearly helpful but it remains an open question whether it will be enough to drive mass deployment.
2. Viability is driven by the cost differential of V2G chargers over smart chargers
Smart charging is a powerful tool. It will also soon be the status quo with the government proposing to make all private chargers smart. The question is then i) whether V2G can add additional value over smart charging, and; ii) at what cost, and crucially what all-in-cost (i.e. including additional grid connection cost and complexity).
On i) the evidence from the InnovateUK projects was that V2G can add some additional value, including carbon-reduction benefits. On ii) V2G chargers are currently at £5-10k per charger, much more expensive than standard smart, unidirectional chargers, which cost around £1k. Grid connection has also been a major challenge for the demo projects, both in terms of time and cost. The general feeling at the event was that this ‘all-in’ differential needs to be around £1k for V2G to be viable. Lots of work ahead for manufacturers and the DNOs!
3. Projects are mainly focused on wholesale market arbitrage.
Over the past 18 months, the commercial landscape for energy storage and flexible technologies – including V2G – has changed significantly. FFR prices have reduced from £20/MW/h to ~£5/MW/h, which along with metering complexities and costs has meant that FFR is no longer considered ‘viable’ (e4future project). At the same time, Ofgem’s minded-to-position on the TCR has significantly reduced the potential for reducing grid charges for commercial customers. DSO services may in time become an attractive option for V2G but the market is still at an early stage and, given current penetration levels, it is challenging to have enough cars concentrated in the right location. As a first step, the e4future project will trial this with UKPN at Nissan’s Technical Centre.
The result: projects are mainly focusing on wholesale market arbitrage, meaning a crucial role for energy traders.
4. Customer offer types are emerging.
At present the offers to owners of the vehicles are either i) time of day tariffs or ii) a fixed monthly discount with criteria. This means different levels of responsibility and control for the operators. Apps and convenience are watch words. Time will tell which is the best option.
5. Deployment is challenging but improving
These demonstration projects are breaking new ground, helping pave the way for the projects of the future. Key challenges have been: i) data management and standardisation issues; ii) long grid connection times and difficulties in interpreting G99 requirements; iii) limited number of chargers (although this is starting to change) and vehicles.
In short, V2G is not easy; but then it is not supposed to be. This is a world leading trial, trying to integrate a mobile energy resource whose primary purpose is to be driven by real people, into the centralised, highly regulated and dynamic energy sector. Well done to all the project teams for ploughing through the challenges and pushing this sector forward!
To keep track of V2G developments check out the new v2g-hub.com, launched by Everoze and our partners: EVConsult, UK Power Networks and InnovateUK.
Presentations from the event are here. Thanks to Marco and the InnovateUK team for organising.