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Ricardo, National Grid study explores market potential for grid-balancing services for plug-in vehicles

A new study by Ricardo and National Grid examining the market potential for grid balancing services provided by a future fleet of plug-in vehicles (PIVs) found that demand-side management services provide only a modest financial benefit but at zero cost, while more robust vehicle-to-grid (V2G) services offer potentially attractive returns, but with likelihood of high investment and limited market.

The report, Bucks for balancing: can plug-in vehicles of the future extract cash—and carbon—from the power grid?, is based on a research collaboration between a team of engineers from Ricardo and National Grid, the operator of the high voltage electricity transmission system within Great Britain (GB).

Balancing. Matching electricity supply precisely to consumer demand on a second-by-second basis is the overriding principle of operation of any large-scale electricity network, the report notes. Failure to do so within tight limits will result in shutdown of the network. To achieve this, grid operators look to balancing services.

There are three main types of balancing services for the grid, covering both demand and generation: frequency response, fast reserve, and short term operating reserve (STOR). Balancing services are essentially divided into two main types: those that can be applied quickly and automatically, termed “response” services; and those that can be dispatched and sustained for longer periods, termed “reserve” services.

Reserve services deal with variations in electricity demand and actual out-turn of variable generation output against forecasts, as well as to cover unplanned events such as generating plant failures.

Of the reserve services, Fast Reserve acts as a conduit between Frequency Response and STOR. This can be required in order to aid system recovery or to cover predictable but dramatic changes in demand. Balancing services must be made available and delivered in specified minimum quantities and timescales.

Supply and demand balancing. Source: Bucks for Balancing. Click to enlarge.

Plug-in vehicles for grid balancing. With appropriate control of a large pool of plug-in vehicles, the report says, the net power flow within the grid can be influenced with a similar effect to that of conventional balancing measures. For plug-in vehicles, there are two possible modes of operation:

  • Demand-Side Management (DSM). Demand-Side Management (DSM) in the context of plug-in vehicles is simply the interruption or reduction of recharging when required to ease grid imbalances, and the resumption and completion of recharging at a later time.

    Once fully charged each vehicle can no longer participate in the balancing service as it has no further load available for disconnection from the grid. Similarly, once a vehicle with a depleted battery comes within the time period required for recharging prior to its next road use, it too can no longer provide a demand management balancing service as it needs to remain connected to fulfil its primary purpose as a road going vehicle.

    This mode of balancing provision requires no extra investment from the vehicle owner, but is clearly limited in the extent of service that can be provided to the grid.

    An alternative DSM approach (not explored in the report) is for vehicle charging to take place at a power level below the charger’s maximum, allowing some headroom to increase as well as decrease power in response to dynamic high and low system frequency grid balancing needs.

  • Vehicle-To-Grid (V2G). V2G enables a transfer of energy from the vehicle battery to the grid. Subject to the availability of the hardware required to allow bi-directional power flows, and appropriate control mechanisms, the vehicle’s battery could be made available while connected to the grid as an energy buffer for balancing services, rather in the same manner as pumped storage hydro.

National Grid provided detailed technical and economic data for the research, including a potential generating mix scenario for the year 2020 that would enable the UK to meet its climate change targets based on, for example, a large shift towards renewable power provided in the main from wind farms. In addition to this the company also provided data on the expected daily and seasonal patterns of demand for the various types of grid balancing services it expects to require at this time, together with their commercial value.

Using these data and a range of the potential market penetrations of electric plug-in vehicles in the UK market by 2020 together with typical vehicle usage and driver behaviour patterns, Ricardo created a grid simulation model which was designed to model the impact of electric vehicle charging based on a five-minute time step throughout the day.

Modelling assessed the two possible modes of balancing interaction with the grid in Great Britain in the year 2020: DSM and V2G. Ricardo performed two distinct modelling activities in order to analyse the opportunity for grid balancing from two different viewpoints:

  • That of a grid operator or service provider, covering the macro-level effects of a large number of vehicles in use with an assumed variation in recharging patterns across the entire plug-in vehicle parc: the grid-level model.

  • That of an individual vehicle user or owner, covering specific recharging patterns in order to investigate how revenue could be maximized: the individual vehicle model.

Key findings of the research include:

  • Using demand side management alone, the projected fleet of plug-in electric vehicles in 2020 would be able to provide an average of 6% of daily GB network balancing service requirements. This rises to a maximum of 10% in the evening and overnight.

  • Demand side management would provide a modest annual financial return to the individual vehicle owner of approximately £50 (US$82) for zero investment (effectively the equivalent of an 18% saving on recharging costs).

  • Vehicle-To-Grid (V2G) based grid balancing was shown to provide significantly greater revenue on an individual vehicle basis—ranging from approximately £600 (US$980) per year for a 3 kW system to in the region of £8,000 (US$13,000) per year for a 50 kW three phase installation. However, the very significant capital cost of a vehicle based bi-directional power interface and the balancing market size limitations that would restrict the value of the service if implemented fleet wide, would serve to render the fleet scale roll-out of the V2G balancing service uneconomic.

  • V2G operation may however be attractive for owners of captive vehicle fleets such as industrial or local delivery vehicles, battery exchange depots or aggregated batches of life expired vehicle batteries, where interface costs might be shared across multiple vehicles or battery packs.

  • With the increased requirement for grid balancing services arising from the changing dynamics of the generation mix, plug-in vehicles could be made to work in synergy with the electricity market to help balance supply and demand, so reducing the reliance on conventional generation for the provision of these services; hence this has the potential to reduce CO2 emissions.

It is clear from this study that there may be an opportunity for the plug-in vehicle parc to provide a new source of balancing services. PIVs may be able to work in synergy with the electricity market to smooth the daily demand profile by providing services in a manner that is not currently available to the system operator, and thereby reducing the need to meet additional balancing requirements by simply running more ‘conventional’ generation and potentially incurring additional CO2 emissions.

...The realization of the opportunities presented by wide-scale use of vehicle charging demand management would require the implementation of smart metering technology as well as mechanisms for the effective fleet level aggregation of plug-in vehicles...A key enabler for the success of V2G-based grid balancing is the development of an efficient charging infrastructure, appropriate to the needs of individual or fleet-based vehicles in order to maximize vehicles’ availability for grid balancing throughout the day. Also worthy of further investigation are opportunities for lower cost inverter systems for bi-directional power flow, which could considerably improve the economic case for V2G-based grid balancing.

Finally, while the limited size of the grid balancing market may make development of mainstream V2G-capable battery management systems difficult for OEMs to justify, the very significant potential revenue streams available from this mode of operation are likely to offer incentives for implementation on a smaller scale in collaboration with captive fleets or vehicle aggregators.

—Bucks for balancing




"Demand side management would provide a modest annual financial return ... for zero investment"

The extra cycling of the car battery has the cost of a shortened battery life. I doubt it is worth the projected $82/year return.


here is my excuse for work
hey boss there was a suprise heat wave last night
my battery is drained cant make it into work


Some folk haven't read the article properly! ;-)
The $82/year cost saving relates to demand side management, which simply delays or interrupts charging, and involves no extra cycling at all.


"However, the very significant capital cost of a vehicle based bi-directional power interface and the balancing market size limitations that would restrict the value of the service if implemented fleet wide, would serve to render the fleet scale roll-out of the V2G balancing service uneconomic."

V2G will not fly. And energy companies have to begin accepting the inevitable growth of distributed energy systems. Their biggest challenge is to grok this change in power management - and to die opposing it or get in on the action. There is LOTS of money to be made in building, marketing and maintaining, the residential and light industry CCHP systems that are coming.

Load balancing, reserve, and DSM will play a diminishing role as individual residents and communities adopt distributed energy appliances. More than likely the first application of this technology will be V2Home - a Vehicle connected to the residence CCHP/PV electrical system functioning as balance and UPS.

The macro-change is conversion from energy storage thinking to energy on demand thinking. Energy is abundant throughout the universe and we have the means to utilize it.


I do not think that many will buy $30,000 EVs to make maybe $1 per day and wear out their batteries sooner.

Thomas Lankester

Davemart's right, some commenters are not reading the article. In brief it concludes that DSM is worthwhile for the masses but V2G would be more appropriate for fleet operators (e.g. supermarket delivery vans).


How much good will a few delivery vans bring about? When you are talking 1 million EVs versus 1,000 delivery vans it is the magnitude that makes the difference and that is what has any importance at all.

This talks about utilities and society in other countries. In the U.S. people care about themselves, when you talk about society, their eyes glaze over and they mumble "what's in it for me" then they mention less government and lower taxes. We have to have a lot more belief that all of us are in this together to make the changes needed in the U.S.


i have always thought that v2g is a bunch of hot air. maybe someone can talk the government into spending tax payer dollars on a few studies, but that is about as much value as i think it will have. and it doesn't take much for utilities to educate their customers as to the best time of the day to charge cars.


V2G has its merits and is a clever idea, but I do not think that it will provide much peak shaving nor distributed energy.

It is a community based idea and people in the U.S. are too individual. While they are capitalists willing to make a buck, this is a bit of a hassle for too little. Remember to buy low and sell high rather than do anything productive.


Frustum, SJC,

The extra cycling for V2G are supposed to be shallow cycles that do not induce any measurable wear on the battery. It is the deep cycles that hurt battery life.


Important to remember is that the vehicle will always be in control of the battery and decide whether it can respond to a *request* of the grid operator to deliver any power back to the grid. The grid operator is not in control of your car and can not discharge your battery at will. If you program your car to be fully charged at 6:00 for your ride to work, it will be full by that time. Don't worry.


How exactly is V2G a community based idea? Each car is individually measured and the owner compensated for the services. That seems like an individual service, for which each car owner has a choice whether to participate and how. Can you explain what you mean?


It is easy to think that a car can not have any significant impact. If you think 1 car that can deliver perhaps 5 or 10 kW of balancing power. But multiplied by, say, 10 million cars, you are talking 50 to 100 GW. If a future scenario of fully electric road transport comes true, it is not unrealistic to estimate a 100 million cars will be plugged in at anyone time in the US (a car spends 95% of its life parked). That could be more than a TW of balancing power. The strength lies in the big numbers.

However, the very significant capital cost of a vehicle based bi-directional power interface

As we all know, mass production can make almost anything cheap, especially electronics. Future bidirectional power interfaces may cost only marginally more than a unidirectional interface. I do not worry about these costs. If there is merit in the V2G idea, the technology will be developed.


I have tried to post a response but the site will not post it.


It is community based in the sense that it goes on the community grid, much like the struggle to get Net Metering laws for solar panels. It was good for the grid and the community, but the utilities fought it for decades. If that fight had not been won, we would not have reasonable rates for putting power on the grid and V2G would not be a realistic option.

In Germany, they have feed in tariffs that are set for 20 years. Do farmers put in panels for the good of the community? No, they do it to make money because their laws allow them to produce more power than they use. Our laws vary from state to state and most do not allow that. It is a big political football that has more to do with lobbying that the public good.


I agree with Anne. Bidirectional, variable rate, controllable, power/metering interfaces are not much of a challenge and should not cost a fortune when mass produced. The going installed price is as low as $400 per household for very large quantities (over one million units).

Slow chargers will be incorporated with on-board equipment. However, a mass produced (over one million) slow charger should not cost more the the above mentioned interface. If/when both are combined, the mass produced cost could come down further yet.


It will be cost effective, but I am not sure it will be widely used. Present laws require major permits and paperwork to get a net metered system online.

Let's say EVERY EV can now do V2G, it will take a literal act of Congress to make this happen and we know how long anything takes to get through there, if it ever does.



The fundamental difference between solar panels and V2G technology, is that the latter produces on-demand power, available to the power companies as they see fit. For them it is a very valuable spinning reserve. PV is not at all like that since they have no control over it. It simply pushes the power onto the grid and the power companies have to deal with it.

From a purely economic perspective, I can imagine they resist PV but welcome V2G with open arms.


Perhaps, the programs to use older battery packs were being promoted by some utilities. The smart grid will make a difference. I see the battery banks in the garage as more popular than V2G. Unless the car is in the garage during the day, then the V2G does the utility little good.

HarveyD would be surprised to know how many cars are in the owners garage for many daylight hours most every day. In our place, over 50% of the 140 internal garages are occupied in day time. The other 50% are parked somewhere else. Most cars are used less than 2 hours a day and parked for 22 hours. V2G possibility is therefore 22+ hours a day.


The great thing about garage net metered UPS is the batteries are there 24/7. We could say that there will be charge stations at work, but probably not.

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