The future of electric vehicles ‘recharges’ energy for the economy

Two years ago, when Hurricane Beryl hit Texas, causing more than 2 million people in Houston (Texas, USA) to lose power, many GM, Tesla, and Ford electric car owners were able to maintain their daily activities thanks to electricity supplied from the battery stored in the car.

According to research by the University of Michigan late last year, if vehicle-to-home (V2H) charging is optimized, charging at low prices at off-peak hours and discharging at peak times can help car owners save 2,400-5,600 USD, while reducing up to 57 tons of CO2e over the life cycle, thanks to reducing emissions from the power grid.

V2H is part of V2X technology (vehicle-to-everything power supply technology), including V2B (Vehicle-to-building, vehicle to construction), V2G (Vehicle-to-grid, vehicle to grid). V2H is an emerging trend, with more than 630,000 electric cars and trucks capable of two-way charging circulating on US roads. V2G technology has been piloted in China, Korea, Japan, Australia, New Zealand and European countries.

V2G is a technology that allows electric vehicles to become a source of mobile energy storage and distribution, re-supplying power to the grid when needed, aiming for efficient energy conversion between the vehicle and the grid. Because, although this type of transportation is considered a green solution to cope with climate change, charging millions of vehicles at the same time can seriously affect the stability of the national power grid.

Meanwhile, Mr. Alex Schoch, Head of Flexibility at power supply company Octopus Energy (UK), said electric vehicles spend up to 95% of their time in parking lots – “a great asset” for the power grid. Because electricity consumption is measured per charge, power companies have collected enough data to take advantage of this asset.

In the UK, the first V2G project was piloted in 2018, with 330 vehicles participating. Car owners are paid 30 cents per kWh sold back to the grid. Octopus Energy is managing one-way charging for more than 350,000 cars. “We have a lot of detailed data about when the car owner gets home, how much power is left in the battery, electricity demand and when they need to use the car,” Mr. Schoch said. The above amount of data is integrated into the technology solution, calculating grid conditions, wholesale prices and other factors to design appropriate charging and discharging schedules.

In fact, Octopus launched its first V2G plan in the UK in 2024. Last year, it partnered with Chinese electric vehicle company BYD to offer “free” charging plans. Users need to install Octopus software and plug in the electric vehicle overnight. This software will automatically charge the car when electricity prices are cheap and discharge it into the grid when needed. If the car owner plugs in the charger 20 times a month, for 12 hours each time, the money from selling electricity will almost completely offset the car charging fee.

In the US, clean power supply company Sunrun cooperated with Baltimore Electric and Gas Company to launch the first residential V2G distributed power plant program last year. They use a Ford F-150 Lightning pickup truck to support Maryland’s power grid during peak hours.

Two months ago, Tesla launched a pilot project with power companies in the Houston and Dallas metropolitan areas (Texas, USA). The only Tesla car line that applies V2G technology is the Cybertruck. The automaker was also licensed by the National Energy Regulator (Ofgem) in the UK to retail excess electricity from electric vehicles and solar panels in March.

Thanks to its ability to balance load, V2G also helps reduce costs and emissions for the entire economy. Mr. Vincent Bellone, boss in charge of product management and strategy at Schneider eStar, said that during peak hours, the grid will utilize energy from polluting power generation facilities such as coal. That is, if car owners charge when clean electricity is abundant and covers peak hours, the demand for electricity from polluted and expensive sources will also decrease. Schneider eStar is a joint venture between Schneider Electric and StarCharge Europe, providing electric vehicle charging infrastructure in Europe.

Mr. Woong Tae Hwang, Vice President and head of the electric vehicle energy strategy team at Hyundai, believes that V2X technology will be popular by 2030. Hwang believes that this technology can increase the appeal of electric vehicles, positioning them not only as a means of transportation, but also as an energy asset for households when needed. Hyundai currently offers V2H charging technology on Ioniq 9 and Kia EV9 models, planning to expand to other models.

However, the application of V2X technology is still on a small scale, due to many barriers. Regarding infrastructure, Mr. Hwang said a compatible two-way charger (charge – discharge) is a necessary condition. Installation must also comply with local grid connection and safety requirements, especially protection measures that automatically disconnect power to the outside of the home when there is a grid failure, to prevent risks.

The growth of the grid-connected electric vehicle market is significantly limited by the lack of common standards for electric vehicle chargers and bidirectional charging protocols. Additionally, the number of vehicles with V2G compatible technology is currently limited, shrinking the consumer base, reducing scalability and slowing integration into the energy ecosystem.

Therefore, any market with a large scale of electric vehicles and modern technology, like China, will have an advantage in V2G development. Last year, they launched a series of V2G pilot projects in nine major cities including Beijing, Shanghai, Shenzhen…, helping to balance supply, without needing additional electricity from plants using fossil fuels.

To spread this technology, experts emphasize that simple measurement and payment methods, along with a transparent grid connection and approval process are necessary, to create convenience for many people to participate. The legal framework also needs to change, becoming more market-oriented. For example, in the UK, when power companies sell electricity to households, they add on the cost of operating the grid. However, when users sell electricity back to the grid, these fees are not refunded.

In addition, according to market analysis company Fortune Business Insights, another challenge for V2G is the misconception that automatic charging and discharging causes rapid battery performance degradation. However, according to 2022 research from the University of Warwick (UK), charging and discharging with a smart grid can improve battery life by up to 12%, despite higher operating intensity.

Because, some measures to preserve battery life are to store them at room temperature and not in a state where the battery is fully charged or too low. Meanwhile, the smart grid and machine learning technology collect weather data, vehicle journeys and other factors to automatically make decisions to charge or discharge the battery in real time, helping to prolong battery life more than conventional vehicle charging.

Barriers related to international standards for V2G are also gradually being removed. Safety protocols – a “common language” between components in the electric vehicle ecosystem – are starting to be introduced, such as the ISO15118 vehicle-to-charging station protocol, which applies to both alternating current (AC) and direct current (DC) charging. Or the Open Charge Point Protocol (OCPP – Open Charge Point Protocol) between the charging station and management software, allowing smart charging and standardizing the charging network, helping any charging station to operate on any type of software, independent of one supplier.

Octopus’s boss affirmed that V2G is the future trend. Because an average electric car can currently store enough electricity for a UK household for a week. “When the UK reaches the milestone of 10 million electric vehicles on the road, this number of vehicles will create more electricity capacity than the total national demand during peak hours,” Schoch said.