Last month (February), Octopus Energy launched the “first” mass-market vehicle-to-grid (V2G) tariff in the UK, guaranteeing free charging for electric vehicle (EV) owners who sell the power from their cars’ batteries back to the grid during peak hours.
The tariff, called Octopus Power Pack, estimates annual savings of more than £850 in charging costs for an average EV driver travelling 10,000 miles per year.
The technology remains in beta and uses the energy supplier’s seasoned platform, Kraken, to balance charging and discharging back to the grid during periods of peak demand.
Alex Schoch, head of flexibility at Octopus Energy, sits down with Current± to discuss the development of this technology, how it can be applied to the UK’s current EV landscape and what the implications will be once it is widely adopted.
The technical side
One of the more notable aspects of Octopus’ V2G tariff is that it seems substantially ahead of the curve, with most other energy suppliers yet to offer the same product.
Schoch explains how the foundation for the technology lies with its software platform Kraken, which the company has been working on “for many years now”. From Kraken, Octopus has garnered significant amounts of data, helping to develop the V2G tariff.
“From Kraken, we have obtained a ton of learning and data about our customers’ car driving behaviour and how their batteries perform,” Schoch says. “I believe we capture approximately 2.9 billion rows of data in a day.”
Considering grid flexibility is an increasingly valuable asset for the UK’s grid system, Schoch saw this collected data as a “huge opportunity for consumers switching to EVs to save even more money whilst also balancing the grid”.
Considering this particular technology is new to the market amongst British energy suppliers, partially because it is a relatively advanced technology but also because there are not as many V2G-enabled EVs or chargers in the UK.
Speaking to this, Schoch said: “It’s not an academic discussion. It’s not a case of, ‘If we have all of these things, then we could enable this’. With our Kraken platform and the huge amount of insights we have, we can say this is real. We can make this happen.”
He also noted that “Ford’s upcoming EVs are V2G-enabled”, as well as “the whole Volkswagen ID range” and the fact that “Jaguar Land Rover’s (JLR) new range has V2G planned into it”.
Is the UK V2G-ready?
Despite Schoch’s accurate depiction of the EVs that will soon be available, the current EV landscape in the UK has yet to be filled with V2G-enabled vehicles, especially amongst private buyers.
“It is a chicken and egg situation,” says Schoch. “As with all things, the tech can be as great as possible, but if the tech is not tangible to consumers, then you will never have a pull effect, which is vital to introducing any new technology.”
Clearly, there is a ‘pull effect’ at some level in the UK for switching to electric, evident from the monthly EV adoption rate which is consistently increasing, having just marked its 19th consecutive month of growth.
Moreover, with the zero-emission vehicle (ZEV) mandate passed into law earlier this year, automakers are working against a deadline of 2035 for the ban of petrol or diesel vehicle sales.
However, neither factor directs customers to V2G-enabled cars or chargers specifically. To combat this, Schoch says Octopus spends a “huge amount of time” focusing on the ease of using the technology for customers.
“It should be as easy as you fall on your phone, and you’ve got the right car being delivered to your driveway and the right charger being installed,” explains Schoch. “It is not just a tariff; it is about the whole customer experience and ecosystem.”
AC vs. DC
There is an ongoing discussion in the V2G sphere regarding whether alternating current (AC) or direct current (DC) is best suited for charging an EV and discharging it back to the grid.
“It would be difficult to argue that DC-enabled V2G is not the most efficient because there are fewer conversion losses,” says Schoch.
“However, practically speaking, there is already an onboard charger on every vehicle because every vehicle has an AC to DC converter,” he argues. “The cost of adding the minimal amount of incremental hardware needed to make that inverter bi-directional on the car will pale in comparison, especially across the millions of EVs produced.”
“Also, that is a more complicated installation, which means more labour and challenges around interconnection.”
DC and AC can provide slightly different services, so they are best suited to differing environments.
“When it comes to V2G in the home setting, our view is that AC is the way to go,” finalises Schoch. “This is because the material costs for an AC bi-directional charging station are lower, the installation time is less, and the interconnection demand is lower.”
He adds: “In a fleet depot setting, for example, with buses, heavy-duty trucks, and even utility vehicles, DC would be preferable because there are shorter dwell times.”
This could be the route taken by UK waste collection vehicle company Veolia, which completed its first V2G trial in January 2024. The trial was able to charge and discharge 110kW of energy from two specially designed bi-directional vehicles.
Veolia plans to electrify all of its 1,800 Refuse Collection Vehicles (RCV) by 2040, which together will provide 200MW of daily flexible power capacity to the grid.
Power in potential
Undoubtedly, the most exciting element of this tariff’s introduction is the potential impact it could have nationwide once fully operational.
Touching on the matter, Schoch said: “It is forecasted that approximately 15 million cars will be on the roads; of those, about five to seven per cent will be V2G-enabled in less than five or six years. That equates to 4.5GW of resource.”
“When you think about it, the scale of this is jaw-dropping.”
Schoch also predicts that the popularity of alternative ways to export electricity from an EV will differ depending on geographical location.
“There are some markets where we will probably see a big growth of vehicle-to-home (V2H),” he explains. “For example, in the US, there are certain areas where the likelihood of blackouts is much greater. In the Northeast, there are winter storms causing power blackouts; in the South, hurricanes often occur; and California sees frequent wildfires.”
Compared with the UK’s relatively tepid weather, there is less demand for V2H technology specifically. In a blackout, British EV drivers will rely less on vehicles to support their homes.
Locational V2G charging has also been broached by distribution network operator UK Power Networks (UKPN), which released a study in September 2023 into the potential of airport car parks.
UKPN described these car parks as the “sleeping giant” of the energy transition, with its study estimating that a total 4.3GW of flexible electricity demand would be made available.
The study suggests that £1.3 billion in flexible energy savings could be made by 2050 if V2G charging is rolled out across the 140,000 long-stay parking spaces in the areas served by UKPN in the south and east of England.
Ultimately, aside from enticing charging cost savings and ease for customers, what will be most appealing with V2G is having direct involvement with the grid to the point of contributing energy and benefitting financially.
“A significant element of being able to export from the boundary meter of wherever the car is plugged in is that a customer can sell power on a wholesale market,” Schoch says. “Customers will be able to participate fully in flexibility services and markets.”
