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Opinion: Introducing the “Cash-Back Plug-In” Concept

by Felix Kramer,

Jon Wellinghoff of FERC is promoting the “Cash-Back Plug-In”

Think you’ve heard all there is about the benefits of plug-in hybrids? Sure, substituting “cleaner/cheaper/domestic” electricity for gasoline that has none of those characteristics is good enough reason to evolve cars. It turns out there’s much more.

Plug-In Partners, the national PHEV support campaign led by utilities, including local governments, companies and individuals, launched with a splash a year ago. On its first anniversary, Plug-In Partners’ Congressional and press briefing in Washington, co-sponsored by the Environmental and Energy Study Institute (EESI), served as the platform for a new way of thinking about electrifying transportation.

You’ll find it in four slides by Jon Wellinghoff of the Federal Energy Regulatory Commission, about aspects of what’s often described as “Vehicle-to-Grid” (V2G). Much becomes possible when millions of PHEVs and electric vehicles, parked more than 20 hours a day, are available as distributed energy storage for the electric power grid. A quick description and old links are found at the FAQ.

CalCars has soft-pedalled the potential of all the variants of V2G. It’s seemed too futuristic to talk about without sounding like a snake-oil salesman. And it’s not one thing: it’s about perhaps a dozen different services or relationships. But experts are starting to get excited about these opportunities. Remember when we used “personal” computers? Wasn’t it a surprise when the home and business computers of the ’80s in the mid ’90s evolved into a global network that has profoundly changed the world?

V2G and variants like V2H (emergency home backup) could some day overshadow the initial PHEV benefits on which we now focus. It’s still far away. But that doesn’t mean it shouldn’t motivate our decisions now—both to begin real-world demonstration programs and to provide more reasons for car-makers to move rapidly from “interest” in PHEVs to demonstration fleets.

In October we highlighted two reports about V2G and its reverse, G2V, showing parked PHEVs’ potential to store wind power in Sacramento and to offer Bay Area Rapid Transit commuters free parking and charging. And this month the Pacific National Lab’s eye-opening report dispelled capacity concerns by showing that if overnight all our cars became PHEVs, we could fuel 84% of them off-peak on today’s grid without adding more generators.

Now a member of the Federal Energy Regulatory Commission weighs in. Wikipedia explains FERC as “the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. FERC also reviews and authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines and non-federal hydropower projects.” FERC has clout.

When Jon Wellinghoff, a former Nevada utility lawyer who is one of five FERC Commissioners, looks at the future potential for PHEVs, everyone starts to take notice. Wellinghoff’s opening graphic of a green dollar sign on a road is powerful. Even more compelling is what he calls PHEVs: “The Cash-Back Plug-In Car.” He shows annual fuel costs: $1,200 for a conventional car, $720 for a hybrid, $495 for a PHEV. Next come the important new numbers. After paying for fuel, CAR OWNERS GET $425 NET ANNUAL PAYMENTS for a Cash-Back Plug-In Car that provides “spinning reserves” to utilities (relieving them of having to maintain plants ready to kick in for unexpected demand). And CAR OWNERS NET $2,790 by providing both spinning reserves and “regulation services” (helping utilities maintain the system voltage within narrow ranges. (Not calculated are revenues for providing peak power!)

Wellinghoff also projects how rapidly a PHEV could pay back its additional costs. Calculations are based on additional costs of $19,000 for a PHEV or $20,000 cost for a V2G-capable PHEV—probably several times higher than mass-production costs. But even saddled by such conservative assumptions, the $2,790 number gives a five-year payback (see slide two for Wellinghoff’s sources).

FINE PRINT: Lest we sound overly enthusiastic, some of these applications may require relatively small fleets. For instance, regulation services for the entire State of California might require only 20,000 cars. Some may be most appropriate at big parking lots with heavy-duty electrical connections. Some, like peak power, may affect battery life because they deeply discharge batteries, while others, like spinning reserves, may take minimally stress the batteries (spinning reserves). None have yet been tested in real-world applications.

All present fertile immediate opportunities for groups like the US Department of Energy, the California Energy Commission and power companies to begin demonstration projects. And with state and federal government, utilities and industry all now saying, “wake up,” we hope auto-makers start paying attention to interconnection opportunities—on top of the urgent greenhouse gas and independence benefits—already driving the electrification of transportation.

If they don’t, someday the strategy of holding out for years for somewhat better batteries for PHEVs could go down in history as the least practical idea and the worst mistake the auto industry ever made.

Felix Kramer is Founder of The California Cars Initiative, a Palo Alto-based nonprofit startup of entrepreneurs, engineers, environmentalists and consumers promoting plug-in hybrids through advocacy and technology development.



I like the basic idea and think that some day it will be implemented. As the owner of some very expensive BEV batteries with a very limited life span (300-500 cycles), I would have to see the lifespan of my batteries be an order of magnitude higher before this concept would begin to pay off for me. Some possibilities are the altair battery, the as yet unseen EEstor ultracap and the MIT carbon nanotubule possibility.

Go Felix Go


It would be better to just get electric vehicles on the road than to fiddle around with what else they can do someday if the electric grid is also revised. I'm not saying the grid idea can't work, but it is a distraction until large numbers of EVs exist.

Do the primary job first. And well.

Besides, feeding EV power back into the grid is needed most in the afternoon. But that is when commerical vehicles and cars are often being driven. And at about 3 pm when power demand peaks the schools let out and drivers begin to hit the road for home.

Late at night when the EV are parked the utilities don't need more capacity - indeed they would like to sell more power then.

To really boost EV progress and sales just exempt EVs from sales, license, and property taxes for the first decade. Legislatures can do that in a minute but won't - it doesn't increase government employment, revenue, or complexity.

John Baldwin

I think the key issue is the amount of fossil fuels - coal and gas - needed to make the night time electricity. If you assume that nuclear and renewables are 'always on' anyway then the energy to make the electricity comes from coal and natural gas. It does not matter whether it is in the day or at night, this is irrelevent.

The "Well to Wheel" CO2 performance of electric vehicles is not good. It is far better to transport natural gas (very low energy losses) and burn this in vehicle engines.

Sooner or later we will have to account for the CO2 used to make fuels - in London the hydrogen fuel cell bus is the cleanest in terms of local air quality but by far the worst in terms of CO2.


An EV "running" on coal is still a bit cleaner than a gasoline car running gas made from on the national avg energy mix. It takes a lot of energy to make gasoline. The EV basically takes that energy and then goes a LONG way on it. For FCVs this is less true because they aren't as efficient as EVs. Furthermore the "well to wheel" varies widely. It depends on the regional mix for one. I'd bet that it's better than the "well to wheel" of a CNG vehicle. EVs can be powered by any source of electricity and they use that energy very efficiently. There's way less waste then anything else we've got right now.

I agree though, V2G is a nice idea but there are many, many more compelling reasons to go PHEV/BEV than what Mr Kramer is proposing here.


I wish we could edit these posts. The first sentence there is terrible. Sorry about that.

richard schumacher

"Late at night when the EV are parked the utilities don't need more capacity - indeed they would like to sell more power then." Well, yes: that's when the utilities will be busy selling electricity to recharge the EVs. Utilities like EVs whether or not the EVs can be used as a distributed storage system.

"The "Well to Wheel" CO2 performance of electric vehicles is not good." Unless the primary energy source is not fossil, in which case the CO2 performance of an EV is ideal, that is, zero CO2 emitted. This is a further argument in favor of nuclear, Solar, and wind.

John Baldwin

Clearly, hybrids are a great idea, I'm just not convinced about the use of electricity because - in practice - all the extra electricity is made from burning more coal and natural gas.

If we go to a surplus of nuclear and renewables or carbon sequestration takes off so much that there is no longer any gas/coal (that emits CO2) used to generate electricity, then using electricity as a fuel will be OK. That seems a long way off.

In the UK I do not believe that we can ever get to that position so the 'plug-in' part of plug in hybrids is not really sensible. Could work in France perhaps as they have so much nuclear.


John: If you are going to claim that the well to wheels CO2 for EVs is poor then you had better crunch some numbers. Personally my EV uses hydro power (no CO2). Even if you are burning coal to create your electricity you at least have the opportunity to sequester the CO2 (or use it for algae production). Unless the efficiency of a NG ICE engine is twice that of a gasoline engine your still better with electrical for wells to wheels.

Here are some numbers for energy efficiecy.

Gasoline in ICE wells to wheels:
Oil in ground to pump 81.7% (GM, Exxon, Argonne labs et al.)
Tank to wheels ICE 23% (I may be generous here)
Well to Wheels 81.7X23=18.6%

Natural Gas to electric wheels:
Natural Gas recovery 97.5% (GM, Exxon, Argonne labs et al.)
Natural Gas processing 97.5% (same)
GE H-system generator 60.0% (from installed base GE data)
Electric transmition 92.0% (GE, Argonne Nation labs)
Tesla wall to wheels 86.0% (charge cycle and motive, Tesla Numbers)
Well to Wheels 97.5X97.5X60X92X86=45.1%

Even a lousy coal fired plant at 40% efficiency gives you a wells to wheels of 31.6%

In large part because of these energy efficiency numbers, an electric car produces 1/2 to 1/3 the amount of carbon as an ICE vehicle (50-100 g/km EV vs. 130 and up g/km ICE)


I should have run the numbers for NG efficiency but I don't have any numbers for NG vehicles.

richard schumacher

Liquid hydrocarbons are ideal vehicle fuels. We need to start making them without using fossil carbon. This can be done using atmospheric CO2, water, and any non-fossil energy source (nuclear, Solar, wind, etc.)


If we ever get substantially into V2G then its capabilities move into stabilizing intermittent renewables. Hence there would be much less need for coal in any case. See this paper:


Richard: I don't know if I would exactly label liquid hydrocarbons as "ideal". Primarily because they are used in ICE engines they are inefficient, noisy and locally polluting. I do agree that bio-fuels are much preferred to fossil fuels.


The only problem I see with plug-in vehicles is that it requires a static parking space within reach of a power outlet. I live in the city and I'm lucky to find a parking space near my house, let alone the same parking spot twice, so I wouldn't have the advantages of an electric vehicle.

country mouse

have folks looked into H2G (house 2 grid) systems. Instead of moving a heap of batteries around on 4 wheels, stick them in the basement and peak shave from there. it would be easier to implement and faster to deploy than V2G. (i.e. no need to wait for car makers, buyers, and infrastructure all over the place.

h2g would not replace v2g, only precede and then co-exist with it.


Even a lousy coal fired plant at 40% efficiency gives you a wells to wheels of 31.6%

First of all your gasser 23% TTW is a bit generous (more like 17-20%, 23% might be best case) but so is this number: 40% might be a best case for a single cycle plant. Anyway that comparison is incomplete: gasoline has an energy density of about 46 MJ/kg, coal ranges from 15-25 MJ/kg -- 2-3 times worse. So yes, the thermal efficiency is higher, but so is the carbon footprint. And that doesn't even include Hg and other heavy metals. PHEV is excellent technology, and we should expand its use, but it's not necessarily always the best technology.

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