Steven Letendre, PhD
The nation’s energy systems are in the process of fundamental change driven largely by advances in technology and policy. Two of the closest watched trends in the energy industry today are electric vehicle sales and grid-connected battery storage deployments. While these two trends may seem unrelated, lithium-ion batteries are at the center of both.
According to Inside EVs, automakers sold over 361,000 electric vehicles and plug-in hybrid vehicles in 2018 in the US.* This represents an 80% increase in EV sales over 2017. EV sales inched higher in 2018 to slightly over 2% of new vehicle sales in the US. The top 10 plug-in vehicle models accounted for 85% of vehicles sold (see table below). Approximately 74% of EV sales in 2018 were all-electric models.
2018 saw a rapid increase in the deployment of energy storage systems. This includes behind the meter in homes and businesses and in front of the meter applications providing grid services. According to Wood Mackenzie Power & Renewables’ report US Energy Storage Monitor, energy storage systems totaling 423 MWh of energy storage and 167 MW of capacity were deployed through the third quarter of 2018. Earlier in the year, Wood Mackenzie forecasted total installed storage at 774 MWh / 393 MW. However, the 2018 Q4 figures are not yet available so we don’t know what the actual year-end values are.
EVs as Storage & Capacity Resources
Combined, EVs sold in 2018 represent a sizable grid resource. Assuming that all Tesla EVs sold had the lowest storage capacity available, the energy storage of the top 10 EV models sold in 2018 combined equals 13.5 GWh. This is equivalent to approximately 20 times the installed battery storage for all grid applications in the same year. Total cumulative installed grid batteries are estimated to be 1.2 GWh, which pales in comparison to the 13.5 GWh of battery storage in EVs sold in 2018.
Top 10 Electric Vehicle Models 2018
We can also consider the EV fleet as a capacity resource. As an example, if we assume that all EVs charge at a level 2 station with vehicle-to-grid (V2G) functionality allowing 7 kW of reverse power flows, 305,000 EVs represent a power resource of over 2 GW. This is equal to 11 times the installed power capacity for grid storage year to date at the end of Q3 in 2018.
Batteries: Coming to a Distribution Circuit Near You
Industry analysts expect the market for energy storage to grow exponentially in the coming years. Declining battery prices and favorable policies, driven by increased recognition of the value that distributed energy resources deliver to the grid, will drive the growth in energy storage markets.
The benefits of having distributed energy storage connected to the grid are numerous. Battery storage systems can respond quickly to changing conditions on the grid. Thus providing multiple ancillary services that have real value in wholesale energy markets.
Changes in net metering for solar are happening in many jurisdictions opening up a new market for solar-plus-storage applications. Anticipated price reduction could make solar-plus-storage cost-competitive with natural gas peaker plants. These are power plants that operate on a limited basis during periods of peak power demand. The curtailed output from solar and wind farms, due to oversupply and/or transmission constraints, can be stored in batteries for later use.
Behind-the-meter energy storage systems can help reduce demand charges for commercial and industrial customers. Battery storage systems in homes and businesses can provide emergency power during a power outage and provide demand response services.
Although EVs represent sizable energy and power resources today, it is not available for the taking. Vehicles generally don’t come with the ability to discharge power. In addition, most EV chargers on the market today do not allow reverse power flows. Questions remain about the impact on EV warranties if used in V2G applications potentially leading to accelerated battery degradation. Furthermore, there are no proven V2G business models. These and other reasons might explain the slow uptake of V2G technology.
The fact remains, however, that the aggregate battery storage in the nation’s fleet of EVs will far exceed the battery storage in all grid applications for many years to come.
Now that EV sales are starting to take off, the V2G opportunity will only grow in the coming years. This reality has not gone unnoticed. Numerous technology companies are working to develop the hardware and software solutions to enable V2G. The investment in a car is justified by the transportation services it provides to the owner. As a result, the
I have personally been involved in several V2G studies. I was a coauthor on one of the seminal articles on the topic titled “Electric Vehicles as a New Power Resource for Electric Utilities” published in Transportation Research D in 1997. As a clean energy advocate, I’m excited about the potential that V2G offers to solve two of our most pressing environmental challenges: addressing transportation carbon emissions and supporting the integration of variable sources of generation onto the electric grid.
*EVs is used to refer to all plug-in vehicles, both all-electric and hybrid electric cars.