EVs are a real game-changer at the intersection of transport and energy.
When I look around at the rapid changes taking place across the energy sector, it reminds me of what a privilege it is to be working in this space. The impact that can be delivered with decarbonisation extends beyond mitigating climate change to ensuring we have a sustainable source of energy and cleaner air to breathe. While the mass deployment of wind and solar power has been a major win over the last decade, integrating these energy sources does not come without challenges. Electric vehicles are a real game-changer, creating a new intersection between transport and energy. By charging vehicles to align with intermittent renewable generation, we can reverse the scales and begin optimising electricity demand to balance the increasingly variable supply. While smart one-directional charging will become a necessary source of flexibility, if just a quarter of drivers participate in bi-directional vehicle-to-grid V2G, EVs could put more power back into the grid at peak times than they consume. This enables EVs to become part of a truly flexible, zero-carbon grid solution, creating a 'win' for: consumers by reducing charging costs, utilities by reducing network costs and the environment by aligning charging with renewable generation. In the last 4 years, it's been thrilling to see this theory put into practice. With over 100,000 EV drivers now on our platform, we've shown it's possible to deliver a better charging experience for drivers, who in return, provide access to megawatts of controllable power that will soon be a gigawatt scale Virtual Power Plant (VPP). V2X presents a huge opportunity, however the complex value chain means that cross-sector collaboration and innovative business models will be key to unlocking its potential. I am delighted to say that my experience of collaboration in this industry has been one of people with different backgrounds, skills and expertise coming together around a common purpose and vision to solve remarkable problems. That is what this paper aims to support.
V2X is the next step forward in electric vehicle charging.
V2X technology builds on one-directional smart charging (V1G) by turning electric vehicles (EVs) into a flexible energy resource that can return power to your home (V2H) or the grid (V2G). At scale, this makes EVs a key component to creating a low-carbon, flexible energy system. Collectively, EVs hold immense amounts of battery storage which, if managed effectively, can meet driver's needs while creating a cheaper, cleaner and more resilient grid. Unlike other clean technologies, such as wind farms or large grid-scale batteries, V2X requires a greater level of consumer acceptance. For this reason, we must put the consumer first and frame challenges in terms of the consumer's V2X journey. V2X, as the name suggests, means the vehicle connecting to multiple forms: vehicle to home, to grid, to building, and so on. The technology uses a bi-directional charger that can both import power to and export power from the EV. Most chargers today only import power. Along with new hardware, software is needed to manage the charging and discharging, and monitor the car's battery level according to the driver's preferences. The ability to export has many benefits for the power system. Charging when cheap renewable generation output is high and discharging at peak times or when renewable output is low will reduce the need to fire up expensive and polluting fossil fuel power plants. National Grid ESO, the British system operator, predicts that if just 26% of EV drivers partake in V2G, net EV demand could become negative (exporting power to the grid) at peak times. For V2X, consumers hold the power, and we must view the industry challenges around their journey. There is much work to do and we provide several calls to action for all stakeholders: automakers, charger manufacturers, energy management platforms, utilities, regulators, government and others. Collaboration is the only way to overcome the hurdles along the customer's V2X journey.
Getting clear on the definitions.
Before we dive into the detail, let's clear up what V2X actually means.
Maintaining a simple customer experience, de-coupled from this complexity, is key to successful adoption.
The estimated percentages of EV drivers using each type of smart charging today, and the growth predictions by 2035.
Three main V2X use cases for light/medium duty vehicles.
For light/medium duty vehicles (domestic cars) there are three main V2X use cases or modes of operation.
Smart Charging and V2X address renewable intermittency.
Our energy use is changing with the electrification and decarbonisation of transport and heat. Households and businesses have already started this journey with the rapid rise of home solar, the shift to EVs, and a growing interest in heat pumps over conventional gas boilers and furnaces. Smart meters, a crucial part of this change, are found more often in homes around the world with over 22 million already installed across the UK alone. How we generate power is also changing. We know that more renewable generation, such as solar and wind will help us achieve a net-zero future, but their intermittent nature brings new challenges for the power system. Smart Charging and V2X can help address this intermittency by aligning when EVs charge with the availability of renewable generation, shifting flexible demand to balance supply. The progressive policy and regulatory landscape of the energy sector and a market based approach to energy flexibility has created the conditions for innovation to exploit the full potential of V2X technology as both an enabler for a net-zero future and an economic opportunity. Although parts of this report focus on the UK, the physics, benefits and challenges of bi-directional charging can be applied globally. Since 2018, over 100 V2X initiatives have been launched across 26 markets. The pressures for increased system flexibility mean that nations around the world are turning to V2X as a possible solution. This is particularly the case in countries where EV adoption is accelerating rapidly and energy supply is under pressure, especially in regions already prone to power outages.
Bi-directional EV charging is equally capable of helping to keep the lights on during a cold, windless winter evening in the UK as it is during a Californian heatwave.
Nick Woolley
·CEO, ev.energy
100+ V2X initiatives across 26 markets since 2018.
A few of the projects happening around the world, with high activity in North America and Europe.
26% to V2G unlocks £2.5bn in yearly system flexibility value by 2050.
If 26% of drivers upgrade their charging to bi-directional V2G, this would unlock an extra £2.5bn in yearly system flexibility value by 2050 and result in lower prices for everyone. National Grid ESO's Future Energy Scenarios predict that winter peak demand from EVs in the UK could be reduced by 30 gigawatt (GW) by 2040 with mass adoption of Smart Charging and V2G. This is equal to approximately 50% of today's total peak electricity demand. While smart V1G charging is a necessary source of flexibility, an additional 15GW of peak load reduction is possible if 26% of one-directional Smart Charging is upgraded to bi-directional V2G. This would result in the net EV demand over the winter peak becoming negative, significantly reducing the amount of new generation and network upgrades that need to be built. System balancing costs would also be lower by avoiding the need to run expensive and polluting fossil fuel power plants to meet peak demand. Source: National Grid ESO Future Energy Scenarios 2023, Consumer Transformation Scenario. BEIS Smart Systems & Flexibility Plan 2021, based on annual system cost savings from 15GW of additional flexibility.
Realising V2X involves the whole value chain, from driver to utility.
Realising the potential of V2X technology involves a broad spectrum of stakeholders, from the everyday driver through to utility companies. Each plays an important role in unlocking the benefits of V2X.
From driver app to utility DERMS. Four interoperability standards stitch it together.
The V2X ecosystem spans the Driver Interface (app), EV Comms Controller, Charger Comms Controller, Inverter Control, Local EMS, Charger Management, Vehicle Management, Energy Scheduler, Asset Aggregation & Operation, and the utility's Local Flexibility Markets / DERMS Platforms / Energy Market Trading. Four key interoperability standards stitch it together.
Cost, carbon, grid, convenience, security.
Energy Systems Catapult carried out 13 hour-long interviews with 6 EV drivers, 3 people awaiting EV delivery, 3 people who weren't against EVs but didn't have any plans to buy one in the near future (non-rejectors) and 1 person who was against EVs (rejector). Research participants expected and valued: Cost benefits · Carbon benefits · Grid benefits · Convenience · Personal energy security · Increased use of renewable energy · Reduced reliance on fossil fuels · Smoothing out energy demand. Source: Energy Systems Catapult user research, Dec 2022.
There are certainly many days where I don't use my car much, where I've got much more electricity essentially sitting in my car battery not being utilised.
User Research Participant
·Energy Systems Catapult, Dec 2022
The ideal V2X offering is a set-and-forget solution that requires minimal behavioural change.
Consumer acceptance is vital to the growth of V2X, more so than other clean energy technologies such as wind generation or grid-scale batteries. Delivering a convenient and compelling value proposition for users will be critical to the success of the technology. Drivers want reliable charging that ensures they can travel from A to B. So, the needs of the driver must be at the forefront, with grid flexibility and other benefits coming second. The ideal offering is a set-and-forget solution that requires minimal behavioural change from end users while reminding them of the value their unlocking. When asked how long it took to charge their car at home, one EV driver responded, '10 seconds, you just plug it in.' This highlights a driver's interaction with the charging process and the importance of automation to boost consumer uptake of smart charging and V2X. We must consider the barriers to V2X in terms of the consumer's journey and address them with: 1. Attractive compensation. 2. Affordable and available charging equipment. 3. Safe operation of battery and vehicle. 4. Seamless user experience. 5. Trust and transparency of automated control. Car batteries versus home batteries: a common 5 kilowatt-hour home battery costs ~£5,000. The typical EV battery has a 50kWh capacity and some models are over 100kWh. Our research has shown that V2H bi-directional chargers can compete with home battery storage, removing the need for an EV owner to buy an expensive battery add-on. If the EV can be plugged-in during the day and charged with solar (e.g. at home or work), then the EV battery can play much of the same role as a home battery.
Open market access plus service stacking unlock fair value.
The first step is to get consumers interested in V2X by offering them an attractive incentive for investing in the technology. The potential value that a bi-directional charger could provide the energy system cannot be fully unlocked today due to limited market access and incentives. To maximise the value to customers, EV flexibility must be able to access several markets at the one time, known as service stacking. To enable this, the system operator, networks, flexibility providers, and government must work together to develop clear rules along with a harmonised set of requirements for EVs to provide flexibility services across all levels of the energy system. Case Study, UK: UK utilities have made great strides in service stacking already, with initiatives such as National Grid ESO's (NGESO) Demand Flexibility Service (DFS) and local flexibility markets run by Distribution System Operators (DSOs). However, their reach is limited. EV flexibility could unlock greater value with open access to nationwide, day-to-day markets, such as the Balancing Mechanism, Ancillary Services and the Wholesale Power Market. These existing power markets were designed for large power plants. Some barriers have already been removed, such as reducing the minimum capacity threshold to 1 MW. Elexon, which manages the Balancing and Settlement Code, and Flexitricty, an aggregator, helped pioneer new code modifications P375 and P415. These changes enable asset metering and Virtual Power Plants to participate in the Balancing Mechanism. Metering is important for the operation of the grid and rewarding EV drivers for their flexibility. Unfortunately, the delays to the UK's smart meter rollout is holding back the bi-directional industry. Market-wide Half-Hourly Settlement (HHS) is a key enabler for energy suppliers to offer innovative EV and V2X tariffs that reward consumers for flexing their EV charging and exporting power back to the grid. Ofgem predicts that HHS will bring £1.6 billion to £4.5 billion of net benefits to consumers in Great Britain between 2021 and 2045. Over 80% of households with EVs remain on flat-rate tariffs. The government's 2025 target to implement HHS looks likely to be delayed, stagnating V2X and its benefits.
From £5,000 with seven-year payback to £1,000 with 17 months.
If a customer is compelled by V2X benefits, the next step is to buy a V2X charger and have it installed. The price of a bi-directional charger can be between £5,000 to £10,000 as they must incorporate costly inverters to convert power from batteries to the grid. It is worth emphasising that while investment might be off-putting, it's not necessarily a deal-breaker. Many people have already invested in other low-carbon technology, from solar to heat pumps, having considered payback periods. The average payback for EV drivers using bi-directional charging will vary depending on factors including the cost of electricity, the frequency and duration of charging, and the capacity of a vehicle's battery. Estimates suggest that bi-directional chargers could generate up to £725 per year. For a £5,000 charger, this equates to a payback period of seven years. If charger costs fell to £1,000 with mass production, the payback drops to 17 months. Another challenge is the lack of available domestic bi-directional charger models. Most existing V2X hardware is for larger commercial vehicles, which often operate as part of schedules and so can predictably provide export at certain times. Encouragingly, manufacturers such as Indra and Wallbox are offering bi-directional EV chargers targeted at end drivers, and building this into their core product offering. The installation process also tends to be more complicated and expensive than a typical charger, in excess of £1,000. Installing a bi-directional charger at home can also prove to be an administrative challenge. Connection requires permission from the local electricity network and proof that the installation complies with local grid/interconnection codes. New rules in the UK require the electricity network to process connection requests for domestic installations that can return power to the grid (e.g. of solar PV, home batteries and bi-directional chargers) within 10 working days or face paying fines. Compared to other countries, the latest version of UK grid code G99 is complex but strikes a good balance between concerns of the network, industry and end user, allowing a clear way for V2G. More work is needed to solve interconnection in the US, where utilities lack a standardised process and connections can take months. There is also a need to grow the workforce of qualified installers to meet the rising number of installations. Business model: Innovation Bundle Package. Research interviews conducted by Energy Systems Catapult found wide support for bundled offers and subscription models. These reduced concerns about the upfront cost of bi-directional charging, allowing consumers to focus on longer-term value. This type of business model could integrate with leasing companies offering financed products to help lower income households adopt V2X charging. Bundled offers that include an EV, charger, and a subscription to management software with an app were appealing. Adding a tariff onto this was seen as very appealing to some, however there was still a desire for individual choice and interoperability across the bundle.
Carefully managed V2G can improve battery health 8–10% over a year.
EV drivers know the importance of the battery in their vehicle and are aware of battery health. They recognise that bi-directional charging would use their battery more often and are understandably wary of overuse and accelerated degradation. Studies on V2X's effects on battery degradation are inconsistent. Some indicate negative impacts while others, such as the EV-elocity projects, showed that through careful management, V2G can improve the battery health of EVs by 8–10% over 1 year's operation (Cenex EV-elocity Project Final Report, June 2022). Vehicle manufacturers could ease consumers' concerns by including V2X use cases in the battery warranty. From discussions with automakers active in the V2X space, three actions will help to provide bi-directional charging cover within the battery warranty.
A slick UI plus back-end software that just works.
Besides a compelling financial case, V2X must be easy for consumers to use. This requires a slick user interface (typically via an app) and back-end software 'that just works'. Great UI/UX design is essential and is an essential part of how we present V2X to consumers. It is also important to have clear industry standards that enable interoperability behind the scenes. Interoperability standards are important so that any EV or bi-directional charger can work with any aggregator or utility to offer consumer choice and market competition. Different standards apply along the EV charging value chain. Car > Charger: Nissan pioneered CHAdeMO DC, the first V2G charging standard, but the Combined Charging System (CCS) is now the most widely adopted internationally. The communications protocol is still being finalised for CCS, limiting its V2X use today. ISO 15118-20:2022 Edition 1 plans to address this. Charger > Service Provider: The Open Charge Point Protocol (OCPP) is an open-source communication standard for EV charging stations and software companies providing managed charging services. OCPP 1.6j has become the global benchmark for bi-directional chargers and can also facilitate V2X. OCPP 2.0, which supports additional functionality including Plug-and-Charge, is currently being developed. Service Provider > Utility: Several V2X-relevant standards exist, including OpenADR 2.0 and IEEE 2030.5. Many bespoke protocols also exist for integrating with regional flexibility markets and utility Distributed Energy Resource Management Systems (DERMS). While a single global standard has advantages, it is unlikely to be achieved due the regional nature of utilities and their different energy flexibility needs. Attempts to harmonise regional or continental standards would help enable broader interoperability.
Test standards in real-world operation before converting them into regulations.
Once the consumer has installed a bi-directional charger, they must be confident that their property and privacy is safe. GDPR provides a strong grounding for privacy and when combined with best industry practices, consumers can sign up to V2X operations safely and easily. V2X also needs to build trust with system operators and networks, who are rightfully cautious about new technologies connecting to the grid. V2X must prove that it does not threaten grid-stability or reliability. Bi-directional chargers pose limited risk today, but this will increase as volumes scale and they become classed as critical infrastructure. Cyber-security is vital along the value chain, from consumers to the energy management software to the utility. When applying security standards to resources, the sophistication should be proportional to the resource's potential impact on the grid. Overly burdensome security standards could hinder the development of V2X technology. It's key to test standards thoroughly in a real-world operation before converting them into regulations. Certification schemes such as 'HomeFlex', being developed by the Association of Decentralised Energy (ADE), can provide assurance to both consumers and energy utilities with end-to-end testing. This certification ensures that V2X charging products and service providers are compliant with all the necessary standards and regulations. Industry communications: industry collaborators should prioritise engaging with a wider audience about V2X so that it enters the social and political debate. To help with this, the industry should align on terminology so that the public message is consistent and accessible. Steps to achieve this include framing topics from the customer's viewpoint, using simple language and removing industry jargon. As seen with EVs or smart meters, it is easy to generate public concerns and misunderstandings when introducing new technology.
Eight actions for automakers, utilities, regulators, government and aggregators.
Realising the potential of bi-directional technology will take collaboration between automotive companies, technology providers, utilities, governments and regulators. Stakeholders can work together to improve the value proposition, create a seamless user experience and overcome technical barriers, with a focus on progressing consumers along their V2X journey.
A consortium delivering V2X with Energy Systems Catapult, VW, Wallbox, Stellantis, Indra, Nissan.
Cross-industry collaboration is essential to delivering successful innovation. We work with charger manufacturers, vehicle manufacturers, and energy utilities to integrate electric vehicles with the grid. V2X-Flex Partners: Energy Systems Catapult, Volkswagen, Wallbox, Stellantis, Indra, Nissan. Funded by UKRI Innovate UK and the Department for Energy Security & Net Zero. The V2X-Flex project, part of the V2X Innovation Programme, is funded by the Department for Energy Security and Net Zero (DESNZ), delivered by Innovate-UK. V2X is part of the up to £65m Flexibility Innovation Programme, part of the £1 billion DESNZ Net Zero Innovation Portfolio. In partnership with Energy Systems Catapult, V2X-Flex aims to unlock and expand the flexibility potential of EVs using interoperable, bi-directional charging solutions. The project is developing prototype software and a new business model intent on reducing the entry barriers for domestic use of V2X bi-directional chargers. Using intelligent software, our goal is to connect electric vehicles with the energy system, creating a win for drivers, a win for utilities and the planet. This will offer increased convenience, energy security and carbon savings on top of direct financial benefits.
The V2X-Flex project builds on ev.energy's world-leading smart charging platform, incorporating bi-directional charging technologies to unlock an exciting new range of EV charging products and services. As a global EV charging platform, ev.energy works with charger manufacturers, vehicle OEMs, and energy utilities to connect electric vehicles with the smart grid. Collaboration and alignment are key to delivering successful innovation and we are thrilled to be delivering this project with such a great range of partners.
Nick Woolley
·CEO, ev.energy
Smart charging is already helping us to better align EV charging with intermittent renewable energy generation. Adding two-way charging, charge and discharge, establishes greater energy flexibility. Most importantly, two-way charging could help consumers to use energy in ways that give them what they need, when they need it, in their homes, cars, and on the grid. This adds value to the EV proposition. The more we can establish value in services for consumers, the greater their uptake and the greater the opportunity for EV energy flexibility becomes.
Danica Caiger-Smith
·Consumer Research Lead, Energy Systems Catapult
100,000+ EVs under management. 40+ programs across the globe.
ev.energy is a proven and experienced specialist in managed EV charging with activity across Europe, North America and Australia. We work with utilities, manufacturers and others to design and deliver customer-facing EV charging management that delights users, while delivering grid and network benefits. With over 100,000 EVs under management on our platform worldwide, ev.energy has the depth of knowledge and experience to deliver EV charging management for a clean energy future. This paper has been created with support from our fantastic team at ev.energy including: Aleksandr Passina, Alice Woolliscroft, Andrius Silinskas, Giulia Escher, James Pratley, Kathleen Maclean, Michael Kenefick, Rachel Jessup.
Join the program. Help unlock V2X for drivers and the grid.
We are always looking for like minded partners, including energy utilities, vehicle manufacturers and charger manufacturers to discuss and contribute to the project. Please get in touch via innovation@ev.energy to see how you can join the program.