How Electric Vehicle Charging Systems are Accelerating the Clean Energy Revolution

At the start of December 2020, the City of Boulder, Colorado, formed a partnership with Fermata Energy—a leader in proven Vehicle-to-Everything (V2X) systems who develops patented technology to integrate EVs with buildings and the electricity grid—to conduct an innovative pilot test at the North Boulder Recreation Center, examining Fermata’s ability to reduce the city’s building energy costs. The city and Fermata have installed an electric vehicle (EV) charging station that has a two-way electricity function, i.e., from the building to the car and from the car back to the building. This, also known as vehicle-to-building (V2B) technology, gives the city new ways to manage its energy load, possibly leading to some energy cost savings.

The bidirectional charging system for EVs developed by Fermata Energy allows the vehicles to transfer energy from their batteries back to a commercial building to support the building’s electric loads. In this pilot test, the V2B charging system will connect to the recreation center’s electricity system and also to one of the city’s electric vehicle fleets. The cars will charge at night, when the building’s electricity demand is low, and discharge energy from their batteries to the building during the peak hours of the day. The goal is to reduce the peak demand of energy, in turn leading to a lower monthly electric bill.

Currently, there are three forms of bidirectional charging systems that utilize EVs to help power and moderate the grid, buildings, and homes:

1. Vehicle-to-grid (V2G): A system enables energy to be discharged back to the power grid from the battery of an EV.
2. Vehicle-to-building (V2B): The transfer of energy from an EV battery to a commercial building in order to support the building’s electric loads.
3. Vehicle-to-home (V2H): Utilizes stored energy in the battery of an EV to power a consumer’s home.

Globally, as EVs continue to grow in number and become mainstream, there is an opportunity for countries, companies, and consumers to leverage the use of V2X technology and transition toward clean energy. The technology allows EVs to become mobile batteries that can store and discharge energy when and where needed. This has the potential to provide a curve-smoothing element to the fluctuations of grid demand, especially as renewables like wind and solar play an increasing role in energy generation. In addition, not only can EV owners make contributions to the environment by reducing CO2 emissions, but they can be compensated for sending energy back to the grid. Loughborough University estimated that EV owners will be able to earn up to US$11,000 over the lifetime of the vehicle. Canadian EV non-profit Plug’n Drive reported that an EV driver in Ontario, Canada could earn up to US$6,270 over the lifetime of their vehicle by selling energy to businesses during daytime hours.

EV manufacturers are also seeing the potential of this technology and pivoting their business models and vehicles toward its adoption, encroaching on business currently dominated by utilities and energy firms. In 2020, German carmaker Volkswagen (VW) announced an aggressive plan to compete with energy companies by tapping a projected 350 gigawatt-hours of storage capacity from its fleet of electric cars by 2025. The move by VW not only signals a pivot toward EVs going mainstream, but also potentially a fundamental change to EV business models. Tesla, whose previous position on V2G was that it would cause battery degradation and was therefore not economically viable, has already integrated V2G technology into their Model 3.

According to ABI Research’s Vehicle and Mobility Market Data report, it is forecasted that the EV installed base will reach to 43.8 million in 2025 from 10.6 million in 2020, growing at a 5-year CAGR of 32.8%. This growth provides an indication to the potential role that EVs can play in powering grids, buildings, and homes. In combination with the shift toward renewable energy power sources, this can lead to large amounts of cost savings in the future while providing enhanced stability to the energy grid.

However, there are some challenges for the future of bidirectional charging that need to be addressed. Currently, there are no clear regulations in place for the technology and the infrastructure required for its implementation is expensive. Additionally, with the technology still rather nascent, unpredictability is also an issue. It is important to tackle these challenges to pave the way for widespread adoption. To do so, more automotive manufacturers should introduce bidirectional charging into their vehicles, increasing the fleet of EVs that could potentially utilize the technology. Second, there needs to be an adaptation of industry regulations throughout the energy economy to provide some form of standardization and create a feasible business model for the usage of bidirectional charging. Lastly, as the current infrastructure is expensive to implement, EV charging station manufacturers need to develop more cost-efficient and accessible bidirectional charging technology, driving down the cost of infrastructure. Bidirectional charging will possibly augment the future of energy and could accelerate the shift toward clean energy.