The V2G Opportunity
If we had built our grid based on renewable power generation we would have made battery storage a part of grid design. Now as we transition away from centralised to distributed power generation V2G solutions offer a useful alternatives that India, given its recent policy changes, is ideally suited to implement.
This article was first published in The Mint. You can read the original at this link.
A general purpose technology (GPT) is a breakthrough so significant that it opens the doors for a number of other technological innovations. Fire was our earliest GPT. Once we learned how to harness it, we were able to cook food, keep ourselves warm in the winter and see in the dark. But by far the most transformative use of fire was as the source of energy that ended up powering all of modern civilisation. Once we learned to harness the energy released by fire in steam-powered machines, we were able to operate the ships, locomotives and factories that gave us the Industrial Revolution. This method of harnessing the power contained in fossil fuel was subsequently used to generate electricity - which become a GPT all of its own.
The Origins of the Grid
Today, electricity powers everything we do. It has become such an essential piece of the fabric of modern life that we cannot imagine functioning without it. The electricity we use today is, for the most part, generated by power plants connected to our homes and offices through a network of transmission and distribution lines. In order to ensure that the lights always come on when we turn the switch, well functioning power grids have to be designed so that, regardless of fluctuations in supply and demand, we always have electricity when we need it. One way to do this would have been to build energy storage facilities that operate as a buffer, storing excess energy so that it could be released when supply is unable to meet demand. However, instead of creating these buffers, our modern grid was designed to simply ensure that the electricity generated always exceeds the total demand for power.
In an earlier article I discussed the role that the Niagara Falls hydroelectric station played in establishing the model of centralised power generation that has been adopted the world over:
The town of Buffalo transformed itself to accept the power being transmitted by the Niagara Falls station, conforming all electricity outlets to the new standards. It was immediately transformed into a hub for manufacturing, becoming the first place in the US to profitably manufacture aluminium and as a result was instrumental in ushering in the automobile age. Thanks to the success of Buffalo, the centralised power generation model was adopted widely and eventually became the basis for electricity supply and distribution the world over.
But this model is struggling to keep pace with rapid urbanisation. Apart from its obvious inefficiency (evidenced by the load shedding and blackouts we still have to endure every summer), this lack of storage is also proving to be a serious impediment to our plans to transition away from fossil fuels.
The Challenge of Renewables
While renewable energy is practically infinite, it is also notoriously fickle. When the sky is overcast, it is next to impossible to be able to generate sufficient solar energy, just as it is impossible to get wind turbines to move on a still day. If we are ever going to get to the point when we can rely on renewable energy in the same way as we do conventional energy, we need to find a way to store energy when we can get it so that we can use it during those times when we can’t.
I have previously explored the idea of building decentralised storage solutions to capture renewable energy when it was available:
… we will need to give some thought to where this storage should ideally be located, in our homes, at the nearest substation, or elsewhere. We will also need to develop innovative policies to incentivise the reorganisation of priorities that this will entail. Finally, though we’ve begun to see battery costs come down, we will need to ramp up production so that economies of scale allow the fall in cost of batteries to mirror the trend we’ve seen with the cost of solar panels so that we can achieve the level of cost efficiency that this sort of a solution demands.
Doing this in a time frame that will prove useful is, however, easier said than done. Thankfully, a solution has presented itself from a somewhat unexpected direction.
The EV Answer
In 2015, Mobility House used an electric vehicle (EV) as an additional energy source to power coffee-makers in their office. While this might, on the face of it, seem like a frivolous experiment, it proved that the battery of an EV could be used to power conventional electrical appliances. Dare we imagine it can be used as a buffer against the inconsistency of renewable energy?
Most EVs have batteries so large they can store much more energy than they need for a normal commute. Not only can these vehicles ferry you to and from work, they will have more than enough energy to spare to support the 15-20kwh that an average household uses in a day. In order to deploy this solution at home, all you need to do to is install bidirectional charging infrastructure so that your EV can charge itself when electricity is available and serve as a source of power to keep your household appliances running when it is not.
As interesting as all this is in the context of an individual home, where it really starts to get exciting is when we try and imagine how EV batteries might be used as a decentralised power storage system for the entire country. In 2018, Mobility House obtained regulatory approval for a technology solution that integrated an EV directly with Germany’s electricity grid as a control power plant. Once connected, the infrastructure could take excess energy from the grid and store it in the battery bank of the EV or, as required, extract it from the EV and supply it back to the grid to stabilise against fluctuations.
This is what is known as a vehicle-to-grid (V2G) solution and is exactly what we need to operationalise a decentralised power system in India. And, thanks to three recent policy announcements, we appear to be perfectly positioned to rapidly implement it.
Perfectly Poised
Let’s start with EVs. India has set itself an ambitious target of achieving 30% EV sales by 2030 and if the government is able to deliver on this promise, there will soon be an EV in every home.
We can’t manufacture EVs at this scale without batteries, which is where the government’s vision of building Tesla- style gigafactories comes in. Once these giant manufacturing plants are up and running, EV manufacturers will have all the batteries they need to achieve the 2030 target.
We might not have thought of it while coming up with these policies, but these two initiatives will enable the creation of a massive distributed energy storage system that we can deploy to achieve the third and final policy objective in the trifecta—the augmentation of our renewable energy capacity by 100 gigawatts within the next decade.
The V2G Opportunity
For all this to work, we need technical and regulatory frameworks that allow EVs, producers of renewable energy and the electricity grid to seamlessly interact with one another, so that the decentralised storage capacity of our soon-to-be-realised EV future can be dynamically utilised by the grid.
If done well, EV owners would be able to offer the excess capacity of their batteries as buffer storage to the grid, allowing their cars to earn them income while sitting idle. It will reduce capital costs because, by using distributed storage, we will no longer need to invest in building physical infrastructure for buffer storage. It will also make renewable energy projects more attractive, as the ability to buffer energy will allow them to more closely approximate our experience with conventional energy.
V2G solutions could be the future of decentralised power in India. Since they facilitate energy storage in a radically decentralised fashion (in the homes of individual consumers) they can serve as natural hedges against catastrophic grid failure. They could also make EVs more cost effective by allowing owners to rent batteries (which still account for around 30% of the vehicle’s cost) from energy companies that could, in exchange, use them to stabilise the power grid.
Our cars have always been mobility assets, but, with vehicle-to-grid technology, they could also double up as energy assets.
