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Energy Management Systems, Utilities, DR, Microgrids, and Two-Way Electric Vehicle Charging

Electric vehicle (EV) drivers are forced to be more mindful of energy use; drivers must actively manage energy use and recharging at sparsely located stations. In a recent article by the New York Times about EVs and two-way charging, EV Grid set up the hardware that enables University of Delaware EVs to be used in demand response service for the local utility. According to the article, Professor Willett Kemtpton believes EV owners could make $5 per day ($1,800/year).

The population of EVs is nowhere near critical mass to make a huge dent yet, but peak demand response can be a significant revenue generator with predictable resources. What’s more interesting is the possibility for fewer EVs to make an impact for frequency regulation—balancing the grid’s frequency in order to prevent harmonic oscillations that wear down and destroy equipment.

Implementing EVs as storage is not limited to utility and demand response companies. EVs as storage in a residential or C&I (commercial and industrial) microgrid also opens up the opportunity for energy management systems to use batteries for peak shaving, microgrid stabilization, backup, and demand response. What makes this possible is energy management technology that has been in development for years; all the pieces exist today.

Personally, I am drooling at the prospect of earning $1,800 a year with my EV someday. Given that my Nissan Leaf has a 10 year warranty on the battery pack, I’ll need to replace it at some point. Put in financial perspective, I drove roughly 1028 miles last month and paid $28 in electricity. As good as that is, the battery will need to be replaced in roughly 10 years at an estimated cost of $10,000. I could buy a new battery pack in 10 years with the money earned from a similar program. The financial model opens up EV incentive possibilities for local utility companies as well as demand response companies. One obvious possibility is the financing and replacing of EV battery packs through partnerships with EV manufacturers. I would not be surprised if a company like Nissan or Honda decided to get into the demand response industry with battery programs for EVs in commercial environments.