With so many promised benefits to the adoption of smart grid solutions, I have been conducting a lot of research lately on why it has taken so long to get the smart grid on track in North America. It is clear there is still a lot of misconception about smart grids and their benefits, as evidenced by the heated debate regarding a rate hike in Illinois so that Commonwealth Edison (ComEd) can roll out smart meters and grid enhancements. After identifying and writing about four of the biggest barriers to smart grid adoption, I decided to turn my attention to where I think we may be able to accelerate smart grid adoption.
Obviously, one of the areas we have seen the most traction to date has been with smart-meter installation. More than 20 million smart meters have already been installed in the U.S. However, consumers have received little engagement or training on why they need smart meters and most lack the ability to leverage smart meters for controlling smart appliance usage or modifying their actual energy cost because most utilities don’t actually vary their fees to consumers based on when they used their energy. Naturally, as homes get smarter and energy prices climb the value proposition for smart meters will continue to rise as well.
So where else should we look for near-term wins in the smart grid rollout? I am convinced that we should be paying more attention to two converging trends: 1.) increasing interest in plug-in hybrid vehicles (PHEVs) and electric vehicles (EVs); and 2.) the emergence of vehicle to grid (V2G) technology.
Let’s start with PHEVs and EVs. Of course we all know that the current percentage of PHEVs and EVs on the road is absolutely miniscule. But we have
to look at the trends. Of particular interest to me is the number of manufacturers and models that are available or in production. Alan Baum is an auto-industry analyst who noted that in 2010 there were 22 hybrid and EV models in production while he projects that there will be 108 electric drive vehicles by 2015. The plug-in vehicle is going more mainstream. Obviously it will start with early adopters and fleet managers who can demonstrate a strong ROI based on fuel savings. New York City, for example recently, purchased 50 Nissan leafs bringing their EV total to 430.
There is another important point about EVs and PHEVs. Americans have had a love affair with their cars for decades. And we all have a choice in the matter (compared with other aspects of smart grid rollout where choice is at most associated with referendums). To many, either because of the financial savings, the cool technology, amazing acceleration or their green
benefits, EVs and PHEVs are now in. A special thanks to Tesla for helping to make EVs sexy! As early adopters and fleet managers embrace EV technology, the word is spreading, and combined with so many new models on the way, EVs are poised for growth.
And as more EVs are on the road the enabling technologies, faster, more accessible charging stations are on there way too. Coulomb Technologies and Car Charging Group recently announced the rollout of 1,000 charging stations through its ChargePoint Network. And many more EV buyers are having charging stations installed in their garages. For example, the eVgo network in Houston is installing charging stations in EV owners’ homes for free in return for a service contract starting at $49 per month.
This takes me to my second point. As we begin to scale up the number of EVs and PHEVs on the road (and parked at home) and we grow the number of accessible charging stations, we are creating the enabling technologies necessary to advance V2G technology adoption. Just a few weeks ago, Ben Schiller wrote an excellent post on this site about the introduction of vehicle to grid (V2G) technology and the recent demonstration project being developed through a partnership with NRG Energy and the University of Delaware.
In a nutshell, V2G can be leveraged to convert plugged in vehicles into a massive storage function for energy, including renewables and to actually sell energy back to a local utility when the car is not in use and when peak demand is high. One of the most publicized challenges to wide scale integration of renewables into the grid is the current lack of adequate storage technology. Given the intermittent nature of renewables, when peak energy generation doesn’t correspond with peak demand, clean energy gets wasted. I recently spoke with a utility representative who informed me that last year they had to essentially burn-off the equivalent energy required to power 1 million homes due to the fact that their wind energy capacity is highest at night when demand is the lowest. Night time of course is when most EV owners and fleet managers are plugging in their vehicles.
Last week I met with Jay Giraud, CEO of REV Technologies based in Vancouver, Canada, which is at the forefront of V2G technology. They have a production ready device that can be installed (for free to the vehicle or fleet owners) which enables Rev to become a "virtual power plant" through the aggregation of a small percent of battery capacity for plugged-in vehicles. Better still, he estimates the average consumer will receive between $500 and $1,000 per year, enabled by the intelligence of REVs network to manage multiple ways that vehicle owners can participate. REV hopes to become the "AT&T of V2G".
I am so bullish on the role for plug-ins and V2G for numerous reasons: consumers have choices and are increasingly interested in EVs for a multitude of reasons; enabling technologies are being implemented throughout the U.S.; V2G addresses a big burden for smart grids and renewables by creating aggregate storage capacity; and consumers can opt-in to have their cars also generate money for them. And of course this is just the start. Once V2G is in place, the smart home can be powered by the EV during peak energy time, enhancing the value of smart meters and growing interest in more distributed energy like solar-powered homes-to power the vehicles, the home, heat water or send back to the grid during peak demand.