By Bryony Collins, BloombergNEF. This article first appeared on the Bloomberg Terminal.
Electric vehicle owners will be able to “offset the cost of driving 10,000 to 15,000 kilometers per annum” by using their car battery to provide flexibility services to the grid.
This would effectively mean that they could “drive for free”, said Rene Kerkmeester, program director for the Equigy consortium of European transmission operators. Equigy is developing a European blockchain to track distributed energy sources like EVs and home batteries to help balance the grid.
By 2030, the ambition of the partnership between TenneT, Swissgrid and Ternais “to operate the entire balancing mechanism on the basis of distributed flexibility sources,” Kerkmeester told BloombergNEF.
The blockchain system launched today offers car companies the “opportunity to reduce the overall cost of ownership of EVs” and earn additional revenue streams from aggregating car batteries onto the grid, Kerkmeester said.
Companies can act as “aggregators” by locating distributed energy storage and bidding into power markets for flexibility services, Kerkmeester said. Car makers, utilities and fleet owners could expand into this space, he said.
Equigy has piloted the blockchain technology with Tesla cars in the Netherlands and with battery storage from Sonnen GmbH in Germany. Once an interface has been built from a car manufacturer to the blockchain to validate performance, the “technology has the potential to be applied all over Europe,” Kerkmeester said.
Read more in the Q&A.
Q: How does the Equigy consortium aim to resolve issues with supply and demand on the electricity grid using blockchain?
A: The energy system is becoming much more volatile, on the production side with solar and wind farms, and on the demand side from the impact of electric vehicles and electric heating.
In the past, TSOs balanced the grid with larger power plants, gas or fossil plants, but there will be less of these available in future. So we need to engage with more distributed flexibility sources, such as EVs and home batteries – to use these sources to balance the grid.
There has been a lot of local testing to integrate EVs into the grid. But until now, there has been a lack of a common standard for all of Europe, capable of scaling up and integrating many devices into our balancing efforts.
This energy consortium is made of major TSOs – in Switzerland, Italy, Germany, the Netherlands, and Denmark has expressed interest to join. And we are working with the largest car manufacturers in the world and battery manufacturers – to set a standard. Our ambition by 2030 is to operate the entire balancing mechanism on the basis of distributed flexibility sources.
Q: How will your blockchain platform enable this?
A: Blockchain is a digital technology that helps to register and validate all these new participants in the energy system. It’s a shared database, where the appropriator actor on the system can access specific data to perform their services. So the TSO will get the data they need, aggregator, plus the car owner and car manufacturer.
Q: You have done some pilots already?
A: Yes – the key is in the validation, if an aggregator says it has aggregated hundreds of cars – then we need to know that the energy discharged from their cars onto the grid is what they say it is. We do this by building an interface into the back-end of the car maker to validate that those cars were truly activated and delivered on performance.
We tested this in the Netherlands with an aggregator company called Vandebron (bought by the E.ON Group), which used 150 Tesla cars, and in Germany with Sonnen, which has recently been acquired by Shell New Energies Group.
If a car manufacturer were to develop a solution in Germany or Holland and build an API [application programming interface] to this blockchain, then the same solution can work in Italy, in Switzerland, in Germany or in Holland. The technology has the potential to be applied all over Europe.
We have done a project with Nissan in Germany, with BMW, and Vandebron deployed Tesla in the Netherlands.
Q: What does this mean for car companies?
A: Many of them are doing pilots. They see this as a useful opportunity to reduce the overall cost of ownership for EVs in order to sell more cars. They could also make additional revenue streams by delivering those extra services.
In the Netherlands, by 2030, we forecast there to be 1.5 million EVs on the roads – equivalent to some 15 gigawatts of total capacity. Not all will be available at once, but by that date we estimate there to be 7GW of flexibility services required, so more than double that would be available from EV batteries.
In Germany, by 2030, seven million EVs are expected – with 70GW available – more than triple the flexible demand we expect there to be.
So by 2030, our ambition is there to be enough available capacity in cars and home batteries to meet our entire balancing demand across Europe.
Q: How much will owners of EVs and home batteries receive for selling energy to the grid?
A: Aggregators will bid into these flexible power markets, and it will be up tothem how they compensate a driver. There are hundreds of euros to be made per car per annum depending on charging behavior, size of the battery and whether it is one way or bi-directional charging.
Q: Will EV drivers be able to opt in or out of using this service?
A: Absolutely. The aggregator will reach out to as many consumers with battery devices as possible and they will build applications using algorithms, based on consumer preferences, like a minimum of 80% energy capacity is always required.
Q: So new companies will be created to take on the role of aggregators?
A: Yes – we see fleet owners building their own aggregators, or large parking operators could do this. Car companies and power supplies may also move into this space.
Q: How does the blockchain technology work to find out what kind of home energy storage is available?
A: The aggregator reaches out to find more devices and have these devices registered on the blockchain. Once on it, the aggregator can place aggregated bids into providing flexibility services, and if we have validated the provider, then we will settle the financial rewards through the aggregator, who will compensate the consumer accordingly.
Q: Does the amount received fluctuate depending on the amount of flexibility needed and the success of the bids?
A: That is right. It is the up to the aggregator how they compensate a consumer. They could make it a fixed fee, as in ‘drive for free’, because the amount you can earn from car battery flexibility is sufficient to offset the cost of driving 10,000 to 15,000 kilometers per annum in an EV. The way they market it to the end-customer is up to them.
So EV owners can earn money by using their car battery to help balance the grid while at the same time contributing to the energy transition.