In the future, utilities will pay you to plug in your vehicle. Millions will plug in their electric vehicles (EVs), plug-in hybrids (PHEVs), and fuel cell vehicles (FCVs) at night when electricity is cheap, then during the day when energy is expensive, sell those extra electrons at a profit. Vehicle-to-Grid (V2G) technology is a bi-directional electric grid interface that allows a plug-in to take energy from the grid or put it back on the grid. V2G helps solve the major problem that demand for electricity is high during the day when everything from industrial plants to air conditioning is running full blast and then excess electricity is wasted at night.
Several early models of passenger vehicles have enough energy stored in advanced batteries to power several homes for hours. Hybrid electric buses and heavy trucks could power many homes or a school or hospital in an emergency. Recent announcements demonstrate that electric utilities and some automakers want to make V2G a reality.
The Smart Grid Consortium, established in December 2007 by Xcel Energy, will select a community of approximately 100,000 residents to become a Smart Grid City using V2G. Potential benefits include lower utility bills for residents, smarter energy management, better grid reliability, improved energy efficiency, and support for EVs and PHEVs.
Current consortium members include Accenture, Current Group, Schweitzer Engineering Laboratories, and Ventyx. Smart Grid City will use real-time, high-speed two-way communication throughout the distribution grid. Smart meters and substations will be integral. Installation will be made of thousands of in-home control devices and the necessary systems to fully automate home energy use.
The current electrical grid is poorly designed for distributed generation of power. Individuals and businesses lose months and connect fees when they add solar and other forms of renewable energy to the grid. Smart Grid City will easily support up to 1,000 easily dispatched distributed generation technologies including PHEVs, distributed batteries, solar, and wind.
In addition to Smart Grid City, another major EV/V2G initiative is unfolding.
The Renault-Nissan Alliance and Project Better Place have signed a memorandum of understanding to create a mass market for electric vehicles in Israel, which is an excellent target market: it has a sales tax exceeding 60 percent for gasoline vehicles, gasoline costs over $6 per gallon, most driving fits the range of electric vehicles, and the government strongly supports energy independence.
Project Better Place plans to deploy a massive network of battery-charging spots. Driving range will no longer be an obstacle, because customers will be able to plug their cars into charging units in any of the 500,000 charging spots in Israel. An onboard computer system will indicate to the driver the remaining power supply and the nearest charging spot. Nissan, through its joint venture with NEC, has created a battery pack that meets the requirements of the electric vehicle and will produce it in mass volume. The entire framework will go through a series of tests starting this year.
The Israeli model is different than the rapid battery swap model that Better Place has promoted as better than "dangerous" fast charging. For the future, Renault is working on developing exchangeable batteries for continuous mobility.
As part of the solution framework, the Israeli government will provide tax incentives to customers, Renault will supply the electric vehicles, and Project Better Place will construct and operate an electric recharge grid across the entire country. Electric vehicles will be available for customers in 2011.
Just as wireless service providers offer smartphones at discounted prices, Project Better Place will offer discounted electric vehicles with usage pricing plans. Prepaid 600 kilometer cards are one approach that is suggested. A free car on a four-year plan in France is another idea mentioned by Shai Agassi, CEO of Project Better Place. Annual use of an EV should be less than the average cost of $8,000 per year for using a gasoline vehicle in many countries including the U.S.
Shai Agassi predicts that Israel will have more than 100,000 electric vehicles in use by 2010. This will be 5 percent of the nation's vehicle population. The number represents a significant step toward energy independence.
Project Better Place has already received more than $200 million of venture capital investment. Shai Agassi presented its new business model at Davos. Agassi was an executive at SAP who led the software company to being the enterprise software leader ahead of Oracle, IBM, and all others. (Read Agassi's Davos insights here.)
Success with V2G would be a double win for electric utilities. Millions of EVs and PHEVs would expand the sale of electricity as an alternative to oil. Utilities could avoid building more dirty-peaking power plants. Instead they could buy back electricity at peak hours from vehicle drivers. It would be a financial win-win for all.