Assessing the economic viability of electric vehicle-to-grid services through infrastructure and market participation investments

Thesis (M.S.)--Humboldt State University, Environmental Systems: Energy Technology and Policy, 2014Plug-in electric vehicles (PEVs) have the potential to not only reduce CO2 emissions from transportation, but also serve as distributed banks of energy storage for grid operators in a service called Vehicle-to-Grid (V2G, V1G). The need for energy storage will become increasingly crucial as intermittent sources of renewable energy are integrated. Previous studies have claimed that providing V2G/V1G services to the grid will generate annual revenues on the order of $2,500 per PEV from the frequency regulation market (Kempton & Tomic, 2005a). In this relatively lucrative market, small power draws to and from the resource enable the correction of imbalances in the net load on the grid. Bids are secured independently for regulating the load down or up, allowing PEVs to manage the power in their batteries to either charge as normal (V1G), or both charge and discharge (V2G).\ud No known prior studies include the cost of the infrastructure and market participation fees necessary to provide this service, suggesting that initial revenue estimates are optimistic at best. In order for a fleet operator to break even over the lifetime of the investment, an annual average market clearing price of $36/MW-h is necessary for V2G fleets and $6.40/MW-h is necessary for V1G fleets. The current average price for this service is $5/MW-h, and has been dropping over the last three years. Unless this price increases, the cost of V2G/V1G equipment and market participation declines substantially, or subsidies are introduced, it will be economically difficult for this service to move beyond the pilot project phase