California Has a Chance to Ensure EVs Get Even Better With Bidirectional Charging

August 16, 2023 | 11:56 am
Oxana Melis/Unsplash
Samantha Houston
Senior Vehicles Analyst

We are well on our way to an electric transportation future, and that’s a good thing, too. Electrification is a key strategy to reduce climate warming and local air pollution emissions from the transportation sector. Of course, battery and plug-in hybrid electric vehicles (EVs) need to obtain electricity from the grid and use that electricity directly as a fuel to power their electric motors. (To the doubters, I assure you there is plenty of electricity to serve the changing needs of EVs on the road today.) What’s more exciting about the EV transition is that the vehicle-grid relationship doesn’t have to be one-way. EVs can also support the grid by making use of the storage capacity of the vehicles’ batteries. As we all know, the most successful relationships are a two-way street—that includes EVs and the grid.

Vehicle-grid integration is a term that captures how EVs are becoming part of the complex electric power system. There are two key categories of vehicle-grid integration: (1) managing how and when EVs are charged and (2) managing how energy stored in and EV battery can be used to power other things, such as providing backup power for your home or putting energy back on the electricity grid.  In any case, vehicle-grid integration aims for the seamless interaction between EVs and the grid, leveraging the potential of EV batteries to do more than just power your car. As I describe in more detail below, vehicle-grid integration can create benefits for everyone, from a more resilient grid and lower air pollution to cost savings for both utility customers and EV owners.  

Managed charging is smart charging

An EV does not draw electricity from the grid while it is in use the way a refrigerator does; it draws electricity when it is plugged in and stores energy in its battery for use at a different time. Managed charging, load management, smart charging, and V1G are all terms that refer to charging in one direction, or unidirectionally, in a way that harnesses the flexibility most EVs have as to when (what time period) and how (at what power) they charge.  

Because many EVs sit parked for long periods of time, drivers can adjust the timing and rate of charge to shift EV charging to times that are better for the grid and cheaper for drivers. The shift may be in response to price signals (i.e., charging at a lower-cost time on a time-varying electricity rate) or to direct calls from a grid operator or a third party to ramp down or defer charging in exchange for a payment or credit (i.e., demand response). Both of these can be automated within parameters that prioritize a driver or fleet operator’s transportation needs. In this way, participation in managed charging programs can reduce or offset the cost of electricity to fuel an EV without much, if any, inconvenience to drivers while reducing strain on the power grid at the same time.

How does managed charging work in practice? In one example, an EV driver enrolled in a time-of-use rate with their local electric utility could set their vehicle or charger to begin charging shortly after the overnight, off-peak (i.e., cheaper) period begins, at say nine o’clock, rather than six o’clock when the driver arrives home from work or errands and plugs in. The driver would save on the price difference across the three hours of charging they might have done between six and nine o’clock without the price signal. Meanwhile, the grid would benefit from not having that charging load pulling electricity during the on-peak period of the early evening when demand soars and solar power dips.

As we have more and more EVs on the road, it will be increasingly important to effectively manage charging. Concentrating charging at times when cheap, renewable energy is abundant can help incorporate renewable energy on the grid and reduce total emissions from driving and EV, and charging at off-peak times when there is slack in the electricity system can increase the efficient use of grid resources. Both strategies can help avoid or defer the need for even more energy generation capacity and local distribution upgrades by utilities that would be needed if increasing numbers of vehicles were charging at system-peak times or times when local distribution infrastructure is congested.

Beyond helping on a day-to-day basis, smart charging of EVs can also support the system during less frequent, more extreme scenarios. In a demand response program, a grid operator may call for participants to reduce energy use to reduce demands on the grid at times of extreme stress, such as a heat wave that increases demand for air conditioning. EV drivers answering the call by reducing charging power or stopping charging altogether typically receive a payment or bill credit for taking that action.  That payment can offset the total cost of electricity to fuel the vehicle. To be clear, demand response is a quantitative, pay-for-performance commitment. It is not the same as a flex alert that casts a wide net, calling on all electricity customers to reduce consumption of any and all kinds during an extreme event (such as the late afternoon of an extremely hot day). Demand response can be similarly used to time-varying rates to avoid or defer grid upgrades that would be needed to increase peak system capacity in the absence of demand response.

EVs can do even more for the grid (and home resiliency) if we make them bidirectional

The electricity in an EV battery can be used to power other end uses of electricity through bidirectional charging. A vehicle could bidirectionally charge to power something at the place where the vehicle is located—imagine a truck powering a saw at a construction site or a school bus providing electricity to the local library during summer evening peak electricity hours.   You might hear this kind of bidirectional charging referred to as vehicle-to-load (V2L), vehicle-to-building (V2B), or vehicle-to-home or (V2H). A vehicle could also charge bidirectionally to send energy to the grid (i.e., vehicle-to-grid or V2G). Both of these strategies can help the grid in a variety of ways by offsetting electricity demands on the grid at a particular time.

Importantly, managing the time and rate of power flowing out of an EV should be done in combination with managed charging of the EV battery. That is how bidirectional charging creates value: an EV driver (or EV fleet operator) charges an EV to store electricity when prices are cheap and renewable energy resources are plentiful, and then discharges when prices are high and renewable resources are insufficient to meet electricity needs (which could be daily or seasonally). From the driver’s perspective, they are buying low and selling high (while reserving some energy to power the vehicle, depending on the driver’s needs). From the grid’s perspective, the EV is absorbing cheap (or even extra) energy, and then giving some of that energy back so that the cost of operating the grid at times of high demand is lower than what it would otherwise be. A win-win.

Alternatively, an EV could be used to power something – from a refrigerator to a whole house – on the EV driver’s property, instead of putting electricity back on the grid. This is still beneficial to the grid because it offsets electricity use that would otherwise be pulled from the grid. In addition to reducing energy consumption during expensive times, on-site bidirectional charging can also be used at commercial locations to control the amount of demand charge that a commercial electricity customer incurs on its monthly bill. Demand charges are based on the highest demand (in kilowatts) that customer pulls from the grid at a given time. So, if you have a load (such as an air compressor) that would spike the kilowatts of demand above baseline electric usage, a commercial customer could use an EV to offset that.

Aggregate EVs for coordination (and driver convenience) at scale

All of that may sound complicated. But fear not, an individual driver would not likely be the one to handle the transactions for power export to the grid. Rather, a driver would opt into an aggregation (a large collection of EVs) that is coordinated by the utility or a third party, and that coordinating entity would be doing the transactions and passing along some of the value to the participating driver. This is already being done with home battery storage, for example, and signups are live for a handful of EV power export programs.

Fleet vehicles are a natural aggregation of EV batteries. So a fleet operator could act as the coordinating entity if it has the necessary expertise in-house. In either case, bidirectional charging to the grid would work much like demand response, except the EV aggregation would be called to export power to the grid.

Ditch the diesel generator

Bidirectional charging to a home, community center, or a critical site load (say, the refrigerator or heating/AC unit) holds the added benefit of serving as backup power for that site in the event of a power outage. That’s significant because an EV can provide the same benefits of a stationary battery or a diesel generator for the relatively minor cost of a bidirectional setup for those who have an EV. It’s particularly important to displace diesel generators due to the harm burning diesel causes to local air quality.  

For personal vehicles, the kinds of vehicle-grid integration opportunities you have access to will depend on your charging routine and your home charging situation. That is one reason we need many vehicle-grid integration program options to ensure all drivers have the opportunity that can fit their circumstances. For example, apartment dwellers who share charging may benefit from being on a time-of-use rate, but it may not be appropriate to enroll those shared chargers in a demand response program. A driver who has their own individual charger (e.g., in a single family house driveway or at an assigned space at an apartment building’s garage) might have the opportunity to enroll in both a time-varying rate and a program that calls for cars to export energy to the grid during the hottest hours of summer heatwaves. Still other drivers may do most of their charging at work or at public stations, where the vehicle-grid integration strategy and program applicability will vary. Any of those drivers might need the ability to use their vehicle as a generator to power an appliance or building in an emergency.

Senate Bill 233 will open bidirectional opportunities for California drivers  

While California utilities still have a lot of work to do to make the grid more reliable and resilient, the need for backup power is currently an unfortunate reality for the many Californians who face periods without power due to extreme weather or wildfire-related outages. In principle, backup power and all of the other vehicle-grid integration strategies we’ve discussed can be done. In practice, some setup is required for the vehicle, the charger, and the connection to the grid.

That is why UCS is supporting a bill in the California legislature, Senate Bill 233, to require bidirectional charging capabilities for EVs by 2030.

A handful of EVs already have some sort of bidirectional charging capability, most commonly the ability to power a device from an outlet located on the vehicle. And an increasing number of automakers are seeing the value of providing the capability across their vehicle fleets. However, the market needs a nudge to ensure widespread access to bidirectional charging that has the potential to connect to the grid.

SB 233 will break down that key barrier to EVs being able to power end uses outside of the vehicle by ensuring that EVs are configured to charge bidirectionally when they come off of the assembly line. That is why now is the moment to establish a timeline, which SB 233 does, to guarantee bidirectional charging capability. That way, bidirectional capability will be there when the vehicle owner needs it. Let’s do this already!