The road to V2G
January 13, 2022

Kevin Cheung

The main focus of the energy transition for utilities is to harness renewable energy sources instead of using fossil fuels for electricity production. However, without a way to store energy on a large scale, the delicate balance of instantly meeting demand and consistently ensuring grid stability during this transformative time is a complex undertaking. But what if there was an existing electrical reserve utilities could draw from when needed?


That’s where vehicle-to-grid (V2G) comes in. V2G is an interactive technology system utilizing bi-directional communications between the grid and battery storage. In this case, EVs are not only a load on the grid but also a distributed energy resource in the form of storage systems.

V2G technology generally involves an inverter interface between the EV and the grid, allowing for a bidirectional energy flow. Since the average vehicle is used less than five percent of the time, the idea is that EVs’ high-capacity batteries can serve a dual purpose: to power EVs and act as backup storage cells for the electrical grid.

However, even as we know the ‘smart grid’ allows for two-way communication between the utility and its customers, we still have some steps to take until we reach that point for EVs. Until EVs are equipped with the capability to allow bidirectional flows of electricity and EV owners are assured they can still use their car when needed, V2G isn’t ready for prime time. When EV users are also compensated for allowing their utility to use their EV for grid services, and the utility can get enough benefit from V2G to offset the cost of it, V2G will be ready for the next step.

Smart charging and V1G

Although we have a way to go to reap all the benefits of V2G, smart charging – sometimes called V1G, although they aren’t exactly the same – is within our grasp today. Smart charging is one-way EV charging with the ability to set the time of the charge. Many EV owners are already doing this to take advantage of lower electricity prices by setting their cars to charge at night. V1G adds on the ability of the utility to regulate the charge rate dynamically. V1G is simply a type of demand-side management – like smart thermostats – that utilities can use to compensate their customers for participation. When an EV owner agrees to shift their charging to off-peak, when electricity is less in demand, they pay less. And, in theory, the utility can integrate EVs as controllable loads and potentially lower grid operational costs by reducing peak demand or shifting load to off-peak times. As EVs become more commonplace, their collective demand could present a greater ability to peak shift and shave to optimize electricity delivery.

V2G EV owner benefits

Full V2G technology can benefit EV owners when their cars are not in use. This may include EVs listed as PEV or Plugin Electric Vehicles, Plugin Hybrid Electric Vehicles or PHEV, BEV or Battery Electrical Vehicles, and some Fuel Cell Electric Vehicles requiring plugging into the grid for charging.

The integration of V2G technology can be used to control vehicle charging during off-peak hours. It can also increase the ability to return excess power to the grid during peak hours when needed. This provides additional benefits in the form of potential income for the EV owners. The idea is that EV owners could become actual electricity market participants with the ability to earn money by selling their stored energy back to the utility.

Of course, the ability of the EV owner to save and/or earn money depends on the local utility and regulations around interconnection requirements and demand response schemes. The amount of money will vary depending on the variations in the cost of electricity, generally based on Time of Use (ToU) structures.

V2G electric utility benefits

As mentioned, the main benefit of V1G for utilities is to absorb a peak in consumption through peak shaving or load shifting. For example, a study (PDF) that assessed the impact of introducing 2.5 million EVs in Turkey, reaching a penetration level of 10% in the total stock, concluded that this would increase the peak load by 12.5% with uncontrolled charging. However, the peak load would increase only by 3.5% with smart charging.

Where V2G really shines is by allowing utilities to aggregate energy from many EVs or fleets to create a potential VPP, or virtual power plant. Then, theoretically, utilities and EV owners could collaborate to charge EV batteries when electricity is readily available and cheaper.

Grid stability has become more challenging because of the fluctuating nature of renewable energy sources. Utilities could help balance the grid by using EVs for voltage support and arbitrage energy between periods of low demand (low prices) and high demand (high prices).  So V2G has the potential to smooth out fluctuations using energy storage, helping utilities reach their sustainability targets.

Current V2G efforts

The IEA projects that EVs registered around the world may increase from about 10 million today to 145 million in 2030, per their “Global EV Outlook 2021.” With the rapid increase in EVs across the globe, there is an increasing market for V2G technology. 

Automakers have also seen the writing on the wall and are gearing up to make it possible for their EV batteries to be used as flexible, mobile energy storage units. One example is Volkswagen’s ‘ID.’ branded cars which are headed toward bidirectional charging with a Home Energy Management System. This will be able to manage the power supplied to the charger to take advantage of the lowest electricity rates possible and make it easier for consumers to charge their vehicles using electricity generated by their own rooftop solar system.

According to a 2018 report (PDF) by Everoze and EVConsult there are an estimated fifty V2G projects currently underway. Commercialization is already happening in Denmark and the Netherlands, where cooperation across sectors has shown some success.

There are also undoubtedly other obstacles to a more widespread V2G rollout, such as the perception that V2G operation degrades EV battery life. And even though V2G may not be fully economically feasible everywhere today, prices will reduce accordingly as this technology becomes more common.

With pilot projects and the ongoing coordination between utilities, regulators, EV OEMs, charging suppliers, and others, V2G has the potential to become a reality creating benefits for EV owners and grid operators alike… Not to mention the upside for our environment.