On the Basis of V2X - Electrical Vehicle Technology and the UK’s Flexible Net-Zero Future

 

What are Vehicle-to-X (V2X) Technologies?

The “X” stands for everything; the term V2X was created as a catch-all to cover a broad range of technologies operating on the consumer’s side of the electricity meter (known as “behind the meter”) which allow an electric vehicle (EV) user to manage or deploy the storage capacity of their vehicle’s battery. There are three main types of V2X technologies, which are set out below; typically, all three technologies rely on “smart charging” in the first instance, which, put simply, charges the vehicle’s battery when the cost of electricity is lowest, reducing the price to the consumer (usually between midnight and 7am). 

Vehicle-to-Home (V2H) Vehicle-to-Business (V2B) Vehicle-to-Grid (V2G)
These are technologies which allow the cheap electricity stored in the EV battery to be deployed for home use, e.g. cooking in an electric oven, at times where electricity is in higher demand and more expensive, delivering a cost saving to the consumer. This operates in the same way as V2H technology, but usually on a large scale, by combining (or “aggregating”) the collective charge of a company-owned fleet of EVs, delivering a cost saving for the business. V2G technologies allow EV batteries to provide a service to the electricity grid. Electricity suppliers or aggregators can use V2G technology to generate income from EVs; they are paid to import electricity into the EV battery when there is excess energy on the grid and to export the electricity from the battery when there is shortfall on the grid. Individual EV owners could share the benefits as the electricity supplier may offset the revenue they make by using the EV for balancing services against the cost of the electricity used to run the EV.

2 electric cars charging outside

 

Why are V2X Technologies so Important?

The importance of V2X technologies are highlighted in the recent BEIS call-for-evidence released on 20 July 2021.It is generally expected that the demand for electricity will increase dramatically over the period to 2050. For instance, it is suggested that there could be 15 million EVs on the road by 2030, with a sharp increase thereafter, resulting from the ban on sales of new petrol and diesel vehicles.This increased demand for EVs is likely to be coupled with a reduction in traditional fossil fuel generation which helps to provide a steady baseload and minimise electricity price spikes. Increasing reliance on the intermittent renewable technologies (e.g. wind and solar) that are replacing fossil fuels will, without flexible electricity storage/management solutions, result in price spikes in line with prevailing weather conditions.V2G technologies could be a source of flexibility for the electricity system to call upon in such circumstances, reducing peak grid demand and reducing overall system costs by providing balancing services. 

What are the Current Barriers to Wide-Scale Deployment of V2X Technologies?

Technical Barriers Information Barriers System Barriers
  • Limited choice of vehicles with V2G capabilities.
  • High cost of AC to DC converters – V2X technology requires two-way electrical conversion. Whether built into the EV or applied externally, there are significant cost implications.
  • The impact of V2X technologies on battery lifespan – consumers will rightly want to ensure their EV batteries have a long and unproblematic life. Use of V2X technologies could impact upon battery health and therefore the cost of replacing the vehicle battery will have to be measured against the potential benefits.
  • Electricity suppliers will need to ensure that (1) they have a sufficient book of EV customers who are plugging in their vehicles overnight and making their batteries available to provide balancing services; and (2) that in discharging a battery in response to a balancing services signal, they do not leave a consumer with insufficient charge to operate the vehicle.
  • Lack of clarity around impact of V2X on vehicle/battery warranties.
  • Lack of consumer awareness of V2X generally and, specifically, lack of consumer awareness among EV users as to when they should be plugging their vehicles to maximise their potential share of the balancing services revenue.
  • Consumer concerns surrounding impact of V2X on the availability and range of their EV.
  • User friendliness of V2X systems.
  • In the balancing services markets, V2X will be competing against other types of storage/flexibility assets. It will be important to ensure that V2G technologies are able to compete on a level footing.
  • As suggested above, often vehicles will be “aggregated” (this will primarily mean virtual aggregation by a service provider of a large number of vehicle batteries). This has been identified as working well for businesses (perhaps due to more structured and controlled usage), but less well for consumers, resulting in a poor business case for domestic aggregation.

Conclusion

Despite the current drawbacks identified above, it is inconceivable to imagine a future for the UK’s electricity system in which V2X technology will not play an integral role. At the very least, businesses who either already own a large number of EVs, or are looking to procure them in the near future, should consider establishing a strategy for the procurement and deployment of V2X technologies. Similarly, electricity suppliers looking to expand the services that they can offer to consumers may consider looking at V2X tariffs for retail consumers as EV adoption rates increase. 

Interested in V2X? How can Freeths Help?

Freeths have a wealth of experience in advising businesses and public sector bodies in relation to the procurement and deployment of EV fleets and the associated charging infrastructure, and specifically on V2G project implementation. We are therefore well-placed to advise clients on the deployment of V2X technologies. For further information or advice on anything covered in this article please get in touch with Reece Ballett on [email protected]

 

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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