A Viable Integration Option for Electric Vehicles
In recent years, efforts to decarbonise the transport sector through incentivising the adoption of Electric Vehicles (EVs) have gained significant momentum. However, similar to renewables, at some point policy must extend beyond the provision of incentives for EV adoption, and focus also on their integration with existing power systems. This is because EV penetration imposes technical (for example stability of low voltage distribution networks) and economic challenges (for example, fixed cost recovery problem for networks) on the power system. Thus, the issue of EV integration plays a key role in the success of policies to decarbonise the transport sector through electrification. To date, much of the debate around options for the integration of EVs has tended to focus on Vehicle-to-Grid (V2G) based business models as the optimal approach, however, the literature reveals many limitations around the current economic case for V2G for EV owners. These limitations stem from existing electricity market price signals, battery degradation, low energy density of batteries and the risk of voiding guarantees on batteries, etc.
This paper defines and proposes an alternative option for EV integration based on Vehicle Grid Integration (VGI). Under VGI, an EV owner can offer a range of services to the grid through an aggregator. The aggregator enables a charging session to be started, stopped and modulated, according to certain signals. This allows the EV owner to benefit from the incentives provided in the balancing and ancillary service markets. Although VGI does not include injection of the power back to the grid, it enables other features, such as balancing of the user’s own consumption and self-generation, through for example rooftop PV. We argue that VGI can emerge as the least-cost integration option for EVs until such time as the V2G option becomes economically viable.