How electric car batteries could help the grid (and win over drivers)

Electric cars are more expensive than petrol ones, mainly because the batteries cost a lot. But new technology could turn these expensive devices into an asset, offering owners benefits such as reduced utility bills, lower rents or free parking.

Ford Motor, General Motors, BMW and other automakers are exploring how electric car batteries could be used to store excess renewable energy to help utilities manage fluctuations in energy supply and demand. Automakers would earn money by acting as intermediaries between car owners and energy suppliers.

Millions of cars could be thought of as a huge energy system that, for the first time, will be connected to another huge energy system, the electric grid, said Matthias Preindl, associate professor of power electronic systems at Columbia University.

“We're just at the starting point,” Dr. Preindl said. “They will interact more in the future and can potentially support each other or stress each other out.”

A large flat screen on the wall of the Munich offices of Mobility House, a company whose investors include Mercedes-Benz and Renault, illustrates one way automakers could profit while helping to stabilize the grid.

The graphs and numbers on the screen provide a real-time picture of a European energy market where investors and utilities buy and sell electricity. The price changes minute by minute as supply and demand rises or falls.

Mobility House buys energy when solar and wind energy is abundant and cheap, storing it in electric vehicles that are part of its system and connected across Europe. When demand and prices rise, the company resells the electricity. It's a classic game: buy low, sell high.

The automotive and energy sectors have been talking about the use of car batteries for grid storage for years. As the number of electric cars on the roads increases, these ideas are becoming more and more tangible.

Renault, the French automaker, is offering Mobility House technology to buyers of its R5 electric compact car, for which the company started taking orders last month. The car, which Renault will begin delivering in December, starts at 29,490 euros (about $32,000) in France.

Buyers who sign up will receive a free home charger and sign a contract that allows Renault to draw energy from the vehicles when they are connected. R5 owners will be able to control how much energy they send back to the grid and when. In exchange, they will get a break on their electricity bill.

“The more they connect, the more they earn,” said Ziad Dagher, the Renault executive in charge of the program. Renault estimates that participants could cut 15% on household energy bills.

Renault, which will offer the technology in France before rolling it out to Germany, Britain and other countries, will share in the profits Mobility House generates from energy trading.

If such services prove effective, the financial case for electric vehicles, an important tool against climate change, will become stronger.

“It would really incentivize the adoption of electric vehicles,” said Adam Langton, a BMW executive who works on energy issues.

BMW already offers software that allows owners to charge their electric cars when renewable energy is more abundant. This allows the company to earn carbon credits and pay customers who take part in the program.

A new generation of electric vehicles that BMW will start selling next year, known as the Neue Klasse, will have so-called bi-directional capability, meaning the cars will be able to take electricity from the grid and release it back as well as using the energy to power their engines.

Ford pioneered bidirectional charging with the F-150 Lightning pickup, which can power a home during a blackout. General Motors, Hyundai and Volkswagen also offer or intend to offer cars with bidirectional charging. As such vehicles become more common, the storage potential could be enormous.

By the end of the decade, about 30 million electric vehicles could be on U.S. roads, up from about three million today. All those cars could store as much energy as the daily output of dozens of nuclear power plants.

But of course those millions of cars could also strain the grid, which is already receiving growing demand for electricity from heat pumps and data centers, said Aseem Kapur, chief revenue officer of GM Energy, a unit of General Motors which provides services to owners of electric vehicles. By helping to level demand, “electric vehicles can be a significant resource,” he said.

But before this vision can be realized, some problems need to be solved.

Owners may not be keen on their cars being connected to the grid because they worry that constant charging and discharging will wear out the batteries faster.

Some energy experts said the degradation would be insignificant, especially if utilities used only a small fraction of the battery's capacity. Renault is addressing this issue by offering participants in its energy storage program the same eight-year, 100,000-mile warranty that people who don't participate receive.

Another challenge is that some U.S. utilities and the state agencies that oversee them prefer to operate centralized grids in which energy flows almost entirely in one direction: from power plants to homes and businesses.

To overcome resistance from utilities, Maryland passed a law last month requiring them to embrace two-way pricing schemes and provide financial incentives.

It is increasingly recognized that electric vehicle batteries represent valuable investments that most owners will actively use for only a few hours a day.

“We want to fully exploit the value of electric vehicle batteries,” said Gregor Hintler, Mobility House managing director for North America.

If all of New York's electric cars were used for storage, said Dr. Preindl, the Columbia professor, “those vehicles would be by far the most valuable power plant in New York.”

Consolidated Edison, the utility that serves New York City and some of its suburbs, is exploring how managing charging times and using electric vehicles for storage could help it cope with the rapid growth of battery-powered cars.

Contrary to popular fears, “the grid will not collapse” because of electric cars, said Britt Reichborn-Kjennerud, director of electric mobility at Con Ed. “The bigger concern is that if we don't plan differently for this rapidly increasing load, the network will not be ready in time to support the transition.”

Con Ed provides power to a Bronx depot for New York City's electric school buses, where Mobility House software allows more vehicles to use the facility.

Fleets of electric vehicles owned by companies or governments represent a particularly promising form of back-up energy storage. Vans or trucks have large batteries and tend to have predictable routes and schedules.

Ford Pro, the commercial vehicle division of Ford Motor, has started offering free chargers to customers that allow them to be turned off during peak electricity demand. Owners also save on their electricity bills.

Ford provides software to manage chargers and meet customers' driving needs and manages the relationship with utilities. Ford is testing the service in Massachusetts before expanding it to other states. The next step will be a bidirectional system that allows vehicles to send energy to the grid.

“What smart charging can do is reduce costs,” said Jim Gawron, director of charging strategy at Ford's electric vehicle division. “This has been a key barrier for customers.”

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