The introduction of a market-wide half hourly settlement, the opening up of the Balancing Mechanism and a significant code review being implemented from 2023 represent new opportunities vehicle-to-grid (V2G).
This is despite short-term challenges around disincentives and some of the impacts of the Targeted Charging Review (TCR), according to Chris Russell, managing director of OVO Drive, who spoke in the latest Current± Briefings webinar.
“We do firmly believe V2G is feasible and technically viable at scale and it can provide valuable services to the grid,” Russell said.
During Project Sciurus – which was run by OVO Energy, Cenex, Nissan and Indra and saw over 300 V2G chargers installed and operated over 36 months as well as the creation of bespoke tariffs and hardware – customers saved on average £420 per year, although the maximum saving came in at around £800.
This came from a variety of value streams, including FFR, some balancing and some demand response.
However, while the findings of the trial were positive – including a reduction in consumer concerns surrounding the impact of V2G on warranties, battery degradation and technical feasibility – there is still more work that needs to be done surrounding challenges such as the hardware cost.
The trial saw the OVO/Indra V2G charge built in-house and at scale, which led to significant cost reductions, however Russell said that according to OVO’s research and calculations the hardware cost plus the installation still needs to approximately half before customers are willing to contribute, with OVO subsidising the cost as part of the trial.
Other challenges include finding a commercial model that works for all participants, the back-and-forth often required with the distribution network operator (DNO) during installations and user recruitment from a small pool of Nissan LEAF drivers, with the LEAF being capable of V2G charging.
Solutions to these include OVO’s proposition ensuring customers are fairly compensated for their V2G activity and DNOs now being more familiar with V2G.
While these are challenges that will need to be solved to achieve scale, Russell said that “the opportunity for scaling V2G does feel imminent” and it’s something OVO is to continue to work on, with the supplier currently looking at its next iteration of V2G.
“We also know from our own perspective as a supplier that V2G allows us to offer more engaging propositions for customers and customers value them – they appreciate the technical complexity but they also appreciate the cost and carbon reductions as a result of that,” Russell said.
However, engagement needs to be adjusted to bring V2G to the mass market, with it being important to simplify not only V2G but also smart charging and EVs in a wider sense as well as making propositions engageable and the commercials stack up “otherwise people just won’t invest”.
As to the debate around when government should intervene compared to when industry should lead the way in enabling V2G, Russell said: “If we wait for policy and regulation to lead the way, by the time we’ve had that implemented and then we start to try and build scale, we’ll have a catch-up job.
“Our approach is to keep progressing with it, while working through some of those issues around policy and regulation, working with the DNOs, Elexon and so on.”
Yesterday the government issued a call for evidence looking at vehicle-to-X, with this being an umbrella term for technologies that allow an electric vehicle to export the energy in its battery for another use, including V2G, vehicle-to-home (V2H) and vehicle-to-business.
Specifically, it is looking for information on barriers – including the hardware cost and impact on battery health – potential business models for V2X and what government intervention should look like, among other areas.
Russell confirmed OVO will be responding to the call for evidence and said it is important that V2G is looked at alongside more general smart charging and wider services.
“It doesn’t immediately need to be either one or the other, so we will be looking at that in a holistic sense and providing feedback.
“For me, the solution isn’t either V2G or V2H, it’s going to be a combination of those and it’s up to the marketplace to make it simple for customers,” he said.