Electric vehicles are more expensive than gasoline-powered vehicles because of the higher cost of batteries, but new technology has the potential to turn expensive equipment into an asset, providing owners with benefits like lower utility bills, lower lease payments and free parking.
Automakers including Ford Motor Co., General Motors Co. and BMW AG are exploring how electric-car batteries could be used to store excess renewable energy and help utilities cope with fluctuations in supply and demand. Automakers stand to profit by acting as middlemen between car owners and energy suppliers.
Matthias Preindl, an associate professor of power and electronic systems at Columbia University, said millions of cars can be thought of as a giant energy system that, for the first time, is connected to another giant energy system: the electric grid.
“We're just at the beginning,” says Dr. Plaindle, “so they may interact more in the future and support each other or cause each other stress.”
A large flat screen on the wall of the Munich offices of Mobility House, an investment company owned by Mercedes-Benz, Renault and others, shows one way carmakers can help stabilize the power grid while still making a profit.
The graphs and numbers on the screen show the real-time situation on Europe's energy markets, where investors and utilities buy and sell electricity. Prices change by the minute as supply and demand rise and fall.
Mobility House buys electricity from solar and wind when it's plentiful and cheap, then stores it in electric vehicles that are part of its system, which charge them across Europe. When demand and prices rise, the company resells the electricity — a classic buy low, sell high strategy.
People in the automotive and energy industries have been talking about using car batteries to store energy on the grid for years, and the idea is becoming more concrete as more electric vehicles hit the roads.
French automaker Renault is offering its Mobility House technology to buyers of its R5 electric compact car, which began accepting orders last month. The car, which Renault will start delivering in December, will be available in France with a starting price of 29,490 euros (about $32,000).
Buyers who want to participate will receive a free home charger and sign a contract allowing Renault to draw power from their vehicle when it's plugged in. R5 owners will have control over how much power they put back into the grid, and when. In return, they'll enjoy lower electricity bills.
“The more you plug in, the more you earn,” said Ziad Dagher, the Renault executive in charge of the program, which estimates participants can cut their home energy bills by 15 percent.
Renault will offer the technology in France before rolling it out to Germany, the UK and other countries, and will share in any profits the mobility house makes from energy trading.
If these services are successful, they will further strengthen the economic case for electric vehicles as a key tool in tackling climate change.
“This will really accelerate the uptake of EVs,” said Adam Langton, a BMW executive who works on energy issues.
BMW already offers software that allows electric vehicles to charge when renewable energy is most abundant, allowing the company to earn carbon credits and pay out to customers who participate in the program.
A new generation of electric cars called the Neue Klasse, which BMW will begin selling next year, will have what is known as a bidirectional function, meaning it can take in electricity from the power grid and release it, as well as use it to run its motor.
Ford pioneered bidirectional charging with its F-150 Lightning pickup truck, which can power homes during a blackout. General Motors, Hyundai and Volkswagen also sell or plan to sell cars with bidirectional charging capabilities. As these vehicles become more common, the potential for energy storage could be enormous.
In 10 years' time, it's estimated that there will be 30 million electric vehicles on U.S. roads, up from about 3 million today. All of those cars could store enough electricity to power a few dozen nuclear power plants for a day.
But of course, millions of cars could also strain an electric grid already facing increased demand for electricity from heat pumps and data centers, said Aseem Kapoor, chief revenue officer at GM Energy, a General Motors unit that serves electric-vehicle owners. By helping to smooth out demand, “EVs can be a critical resource,” he said.
But to realize that vision, several issues need to be resolved.
Owners may be reluctant to connect their vehicles to the power grid, concerned that frequent charging and discharging will wear out the battery faster.
Some energy experts say the degradation isn't a big deal, especially if utilities use only a fraction of the battery's capacity. Renault has addressed the issue by offering participants in its energy-storage program the same eight-year, 160,000-km warranty as non-participants.
Another challenge is that some U.S. power companies, and the state regulators who oversee them, prefer to operate centralized grids in which energy flows almost entirely in one direction, from power plants to homes and businesses.
Maryland passed a law last month mandating a two-way pricing system and offering financial incentives to overcome resistance from power companies.
There is growing recognition that electric vehicle batteries are a valuable investment that most owners will only actively use for a few hours a day.
“We want to get the most value out of electric vehicle batteries,” said Gregor Hintler, CEO of Mobility House's North American operations.
Dr. Plaindle, the Columbia University professor, said that if all of New York City's electric vehicles were used as battery storage, “they would arguably become New York's most valuable power plant.”
Consolidated Edison, the utility that supplies electricity to New York City and some of its suburbs, is exploring how it can handle the rapid growth of battery-powered vehicles by managing charging times and using electric vehicles to store energy.
Contrary to popular fears, electric vehicles “are not going to cause the grid to collapse,” said Britt Reichborn-Kenneld, Con Ed's director of e-mobility. “The bigger concern is that if we don't come up with a different plan for this exponentially increasing load, the grid won't be ready in time to support the transition.”
Con Ed is working with the Metropolitan Transportation Authority to use Mobility House software to manage charging times for electric school buses in the Bronx, allowing more vehicles to use the facilities.
Corporate and government-owned fleets of electric vehicles are a particularly promising form of backup energy storage: the vans and trucks are equipped with large batteries and tend to have more predictable routes and schedules.
Ford Pro, the commercial vehicle division of Ford Motor Co., has begun offering free chargers to customers who allow them to turn off their chargers during periods of peak demand, helping owners save money on their electricity bills.
Ford manages the chargers, provides the software to serve customers' driving needs and manages the relationships with utilities. Ford is testing the service in Massachusetts before expanding to other states. The next step will be a two-way system that allows vehicles to send power back to the grid.
“What smart charging does is reduce costs,” said Jim Gawron, director of charging strategy for Ford's electric vehicle division. “That's been a big barrier for customers.”