top of page
  • Writer's pictureNicholas Gurieff

V2X – what's in store for Australian consumers?

Updated: Nov 8, 2023


Since we wrote this blog, we have prepared a more comprehensive and up-to-date report for ARENA. You can find it here.


Key points:

  • Vehicle-to-X (V2X) refers to the ability to use an EV as a bidirectional power source.

  • Internationally, a growing number of mass-market EV and EV supply equipment (EVSE) manufacturers are now supporting V2X or have signalled an intention to support it soon.

  • The Australian market has many features that could support rapid adoption of Vehicle-to-Grid (V2G) including accessible markets and very high intraday price spreads. A 50% price reduction in bidirectional charger costs could bring the payback for V2G under 10 years in all NEM regions except Tasmania.

  • Battery electric vehicles (BEVs) may offer consumers the capacity to power their homes during peak pricing periods and/or provide a range or grid support services.

  • The future adoption of V2G and Vehicle-to-Home (V2H) can be accelerated by reducing the cost of bidirectional chargers, common interoperability standards for vehicles and inverters, network tariff reform and dynamic operating envelopes.


Bidirectional charging – what are the different types of V2X?


Bidirectional charging allows energy to be imported to and exported from an electric vehicle. Energy exported out of an EV can be applied in three general contexts: V2L, V2H and V2G.


Vehicle to Load (V2L) – Just over 10% of vehicles for sale internationally have one or more power points which could, for example, power a refrigerator while camping or run power tools on a building site. This functionality is supported by an onboard inverter that converts the DC power from the battery to mains-quality AC for general purpose usage. The power transfer limits are often quite generous; e.g., Kia’s Niro EV allows a total V2L power draw of 2.5 kW (i.e., enough to run a compound saw or most portable fishing freezers). V2L can also prove handy in the event of a blackout.


Vehicle to Grid (V2G) – Several European and Chinese EV manufacturing groups (including Volkswagen and Volvo) have announced an intention to enable V2G functionality by 2024. While many details are yet to be revealed, we expect EV to EVSE power transfer to be DC via the Combined Charging System (CCS) and thus managed via the ISO 15118-20 communications standard (historically, V2G and V2L have been possible using the CHAdeMO protocol for nearly a decade, though such implementations are falling out of market favour). Grid connection is contingent on the installation being compliant with local connection standards applicable to small-scale inverters (such as PV inverters).


Vehicle to Home (V2H) – a definition with a number of interpretations including large-capacity V2L, and also net-export-limited V2G. A number of manufacturers are offering larger power transfer limits such that the EV could power a whole home. For example, in the US, the Ford F-150 Lightning rocks a massive 131 kWh battery. Sunrun provides the inverter (and sets a power transfer limit of 9.6 kW from the car) and allows for the orchestration of solar and/or other battery systems. Ford/Sunrun will use the CCS plug (Type 1) and the ISO 15118-20 communications standard. Given the identical technical capabilities as V2G, V2H appear to be mainly a marketing concept.


As shown in Figure 1, the number of V2X capable vehicles is growing with an additional 31 vehicles recently being announced with DC V2G/H. The average usable battery size for V2X vehicles is also increasing, for example from 49 kWh (available) to 85 kWh (announced) in the DC V2G category.


Figure 1: Count of international EV models with available or announced V2X capability (Source: ev-database.org, 19/2/2023)

CharIn, the global association helping drive the CCS charging standard, has referred to 2025 as the ‘go-live year’ for CCS-based V2X, but many trials are already underway or completed and a range of products are expected to land well before that. Derivative charging standards like the Megawatt Charging Standard (MCS) are V2X-capable, and intended for release in the same year. The time to get Australian electricity sector ready for V2G and V2H is now!


The wholesale market value of V2G


AEMO’s 2022 ISP Step Change scenario (the main scenario for planning purposes) has high BEV uptake in the National Electricity Market (NEM) and a limited uptake of V2G. In a high uptake scenario, modelling suggests EV V2G could be sufficient to avoid the need for major large-scale battery deployment, even accounting for low availability and access to only half the battery. Internationally, researchers have shown EV batteries alone could satisfy most of the demand for short-term grid storage with participation rates as low as 12%–43%. Xu et al (2023) estimate EV batteries could satisfy short-term grid storage demand by as early as 2030. V2G at this level of penetration could also provide much of the NEM’s primary frequency control (e.g. FCAS) and this is considered an early revenue opportunity for V2G aggregators.


Wholesale market modelling to date has tended to highlight the value of managed charging, as load-shifting has a near-zero short run marginal cost. NERA’s Load Flex Study for example estimates managed charging could save consumers between $3-5 billion over 30 years. Flexibly charging EV’s lowers electricity prices for everyone by increasing network and generator utilisation, and reducing the capital investment required for transport electrification. This great study by Ergon and Energex shows just how price responsive charging behaviour can be, at least for early adopters.


V2G could also be a significant additional resource through Australia’s energy transition. Rather than just avoiding peak pricing, V2G has the potential to take full advantage of price spreads in electricity spot markets: charging at the lowest prices and discharging at the highest. This value amplifies if, as expected, the roll-out of large-scale renewables, storage and transmission is slower than needed.


Figure 2 shows the wholesale market value of V2G in 2022 associated with a simple schedule of dispatching electricity between 6 pm and 1 am whenever the spot market is above $500/MWh, and then recharging in early hours of the morning (at an average cost by jurisdiction of between $64 and $179/MWh). Net earnings increase by around 6% if you are lucky enough to be able to recharge between 10 am and 2 pm.


Figure 2: A 7.4 kW DC V2G in 2022 (export volume and wholesale market value). Export threshold RRP>$500, export window 6PM - 1AM (availability factor of 86%). Recharge window 1AM to 5AM at average prices in that period. 20% round trip losses.

Admittedly, 2022 was a pretty extreme year for electricity prices in the NEM, but all the signs are that daily price spreads are likely to stay high as long as renewables continue to push down minimum prices and peak prices continue to rise.


At current electricity and bidirectional chargers prices, only QLD provides a payback of under 10 years. This is based on an installed cost of a bidirectional charger of $10k compared to $2k for a unidirectional equivalent. Charger prices are however expected to drop dramatically as production scale increases. A 50% reduction in installed charger costs (i.e. from $10,000 to $5,000) could pull the payback period under 10 years in all regions except Tasmania.


What is V2H?


The distinction between V2H and V2G, and indeed the definition of V2H, is hotly debated. V2H is often conflated with the concept of back-up power and islanding capabilities, or the ability to continue to provide power when the grid goes down. At least for the purpose of this article, we define V2H as achieving zero net exports at the customer point of connection to the network. This is consistent with resources such as ev-datavbase.org that recognise the underlying technical capability for V2H as identical to V2G.


V2H could make sense where a customer has a static zero net export limit under their grid connection agreement, or if they are on a volumetric retail tariff that discourages wholesale price arbitrage. Ultimately though, it makes little economic sense for consumer incentives to arbitrarily limit a vehicle to zero net export .


Digging deeper into V2H – what is it capable of?


To better understand the utility of V2H for a household, let’s look at a typical profile for a large airconditioned 4-person family home, in Victoria, in the summer, with a 10 kW rooftop solar system. The family has a medium-size EV with a 60 kWh battery, similar to the converted Hilux that Senator Pocock recently drove to Parliament House, paired with a 7.4 kW bidirectional charger. As a case-study, we assume one parent drives the V2H-capable EV on an average 58 km round-trip each day during the week, leaving early in the morning at 7am and arriving home at 6pm. We use the Origin Solar Boost Plus Retail Plan for tariff purposes.


During a case study week, the vehicle is used to power the house each night during the retail peak pricing period. This could be to reduce retail price exposures or to fulfill a network support or RERT contract during a Lack of Reserve event. Output from the system is arbitrarily limited to zero net export to match our working definition of V2H (maybe because of inefficient tariff or contractual arrangements). For this simplified case study we have used hourly consumption values while noting instantaneous power demand may exceed the capacity of inverter(s) (although we expect this would be rare in this case study).


As shown in Figure 3, an EV with a reasonably sized battery, paired with a bidirectional charger, has the energy storage capacity to power the house between 6pm and 11pm every weeknight, contributing to reduced peak grid demand during peak pricing periods. The battery does get quite enough time to recharge over night and so its state of charge (SOC) drops over the course of the week. The lowest SOC in this week is Friday afternoon at 21%, just before the full recharge on the weekend.


The cost of power (the opportunity cost of not exporting the solar on the weekend) is $0.12/kWh as per the Origin plan, while peak and off-peak consumption charges are $0.28/kWh and $0.18/kWh respectively. Including the cost of roundtrip losses of 20%, this scenario would deliver the customer a net saving of just over $8 per week, or approximately $400 if this could be repeated for the year. While maybe dubious in terms of its overall efficiency, it does indicate there is some money on the table for those seeking greater 'energy independence’. Is this the kind of scenario proponents of V2H are envisaging?


Figure 3: Electric vehicle battery state of charge over a week, where V2H is used to travel 58 km and achieve zero net import from 6pm to 11pm each weekday. The vehicle recharges each night during off-peak periods (11 pm to 7 am) and exclusively from solar on the weekend. 20% round trip losses. State of Charge taken at 7am, 5pm and 11pm.

Enablers and potential roadblocks to V2G/H – what’s needed to make this work for consumers?


Bidirectional charger costs

While at an installed cost of around $10k, bidirectional chargers are still expensive, scaled production and greater competition between EVSE manufacturers will hopefully lead to rapid price reductions in the coming years A 50% price reduction would bring the payback for V2G under 10 years in all NEM regions except Tasmania.


Battery life and warranties

EV battery degradation is generally subject to two processes: one is mainly dictated by the number of battery charge/discharge cycles, and the rate of charge/discharge; the other is due to time and environmental conditions (read more). EV batteries are typically warrantied in terms of years and distance travelled. In the US, warranties for EV batteries have to be for at least eight years or 100,000 miles (160,000 km).


In 2022, the prize for the best performing warranty went to the Rivian for its R1T electric truck and R1S electric SUV. Coverage includes all components inside the high-voltage battery and 70% or more of the battery capacity for 8 years or 175,000 miles (280,000 km), whichever comes first. Australia has several car manufacturers including Tesla, Audi, Mercedes-Benz, BMW and Nissan, that guarantee EV batteries for eight years or 160,000 km.


The need to preserve battery life is often discussed as a factor that limits an EV manufacturer's willingness to offer V2X. It is generally accepted that faster, deeper and more frequent cycles shorten a battery lifespan so for a warranties designed around transport, V2X represents a risk. This is a motivating factor for manufacturers to vertically integrate V2G/H services, to retain some monitoring and control over usage. It is also an excuse automakers could use to block our competitors in energy services markets.


Further analysis is needed to determine how material different V2X use cases are to battery life, compared to other factors like DC fast charging, and how consumers might value battery warranty terms compared to the value of the different V2X use cases.


Technical standards and interoperability

Electrical and communications standards for interoperable vehicles and inverters will be required to help make V2G/H work in practice.


AS/NZS 4777.2:2020 is an Australian standard for grid-connected low voltage inverters incorporating unique features that reflect Australia’s very high penetrations of rooftop solar penetration (read our other blog on issues with that regulatory framework). V2G/H inverters currently need to meet this standard, whether they are in the car or on the wall. Inverters in the vehicle are more difficult to regulate given interactions between the range of EVSEs and EVs types and settings and DC V2G/H may allow customers to better utilise mature hybrid inverter technology already in the market, while also allowing automakers to reduce the cost, volume and weight impacts of inbuilt inverter technology.


While this is all achievable in the medium term, in the shorter term, local inverter requirements are likely to delay local bidirectional EVSE supplies compared to overseas markets – our relatively small size makes Australian-specific compliance a lower priority for relevant product planners, further enhancing the case for DC-based V2G/H that can use existing hybrid inverter technology.


SA Power Networks (SAPN) is playing a leadership role in Australia, recently becoming the first electricity distributor in Australia to explicitly facilitate network connection of V2G EVSE. One happy Nissan LEAF owner is happily reporting earning $50 per week selling power on top of a $6,000 p.a. bill reduction, with an integrated energy solution, including V2G and rooftop solar.


Local adoption of modern interoperability frameworks and standards such as OCPP 2.x and IEEE 2030.5 by local inverter and energy management solution manufacturers will help ensure customer devices are ready for future V2G/H integration. Whilst clear paths exist in defining communication between EV and EVSE (increasingly ISO 15118) and from EVSE to management platforms (OCPP), enX acknowledges a gap concerning the definition of consistent local smart grid functionality for EV charging. The international standards environment is rapidly firming with moves by the Biden administration to require Energy Star certification and ISO 15118 for all publicly funded charging infrastructure.


enX believes that Australia can achieve clear technical directions for V2G smart grid implementation, making use of our mature frameworks for DER participation in energy frequency control markets and advanced approaches to network constraints management and network capacity allocation.


A range of inverters and gateway devices already support Dynamic Operating Envelopes (DOEs) which are unique to the Australian market and have the potential to open up significantly more grid capacity to EVs exporting at peak times. DOEs utilise CSIP-Aus as an Australian extension to the smart grid standard IEEE 2030.5. We also expect automakers to make increasing use of ISO/IEC 15118-20 to support V2G and roaming applications like ‘Plug & Charge’. In Australia, many of these issues are being considered as part of the Energy Security Board’s interoperability workstream (Disclaimer: enX is working for the ESB to support this workstream).


Network tariffs

The structure of network tariffs will be a key swing factor in the economics of V2G/H. Bidirectional tariffs that reward exports at peak or critical-peak times can support V2G participation and improve outcomes for all network users. The sharper the tariff, the greater the benefit for the V2G customer and the grid. Network businesses like Essential Energy are trialling fixed intraday bidirectional network support tariffs for community batteries and the same pricing principles could apply to all customers with bidirectional resources. Ausgrid is trailing dynamic network pricing that reflect the value of exports at critical peak times further enhancing the business case for V2G/H.


Conversely, flat unidirectional tariffs can significantly reduce the benefit of V2G and create economically misaligned charging and discharging behaviour. This would reduce the value of V2G/H for customers and increase cost of maintaining the grid for all customers.


New market participation and commercial models

Emerging commercial models can also assist unlocking the value of V2G/H for customers. These include:

  • Charging-as-a-Service, whereby an automaker or third party offers zero installation costs and free charging in exchange for the right to use the battery for V2G at selected times. In this case, the EVSE may be registered as a ‘Integrated Resource Provider’ and could be settled separately from the customer’s regular electricity supply. In the future, it could be net-metered from other customer loads under a ‘flexible trading arrangement’.

  • Spot passthrough, whereby a customer takes up a retail or non-retail tariff offering that exposes them to the wholesale market value of V2G. The vehicle, in this case, becomes a hedge for the spot price risk exposure they carry for their regular electricity supply.


by Nicholas Gurieff and Jon Sibley © enX Consulting (2023)


About us: enX provides consulting services to government and business clients across the energy sector. We work at the cutting edge of distributed energy resource integration, bridging the latest international technology and commercial innovation with high-profile national policy development. Distributed energy resources are a ‘heavy lifter’ in Australia’s decarbonisation journey, and we want to unlock their full potential. Find us at enxconsulting.au


General disclaimer: This blog contains general information only and no representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of its information. enX and its employees or agents will not be liable or responsible for any loss or damage whatsoever arising from its use.


834 views0 comments

Recent Posts

See All

Comments


bottom of page