Estimating the Annual Microeconomic Benefits of Vehicle-to-Grid Services in New York City

Gerad M. FreemanM.S. Candidate in Alternative Energy

Goal of Economic Model Review of Literature Overview of Model Scenarios Simple Application of Scenarios Application to New York City Data Results and Sensitivities

Outline of Presentation

Goals of Economic Model To quantify the benefits an electric vehicle (EV) owner can

expect to gain from providing Vehicle-to-Grid (V2G) energy storage services to their electric utility.

To provide the model user with reasonable customization options relating to participation scenario and technology applied.

Image: Fraunhofer

Review of Literature Existing Literature Suggests:

Profit created by V2G services is limited by: Kempton et al. 2004

Short duration, high value markets are best suited for V2G services. (Sioshansi et al. 2009, and White et al. 2010)

Of these markets, ancillary services are favorable due to capacity payment structures. (Kempton et al. 2007)

Only a small value opportunity exists for peak power and energy arbitrage (Peterson et al. 2009, Ma et al. 2012)

This Paper Examines: The potential benefit derived by participation in storage services on the

NYC grid with newer, larger capacity, battery electric vehicles (BEVs). Profit potential of three scenarios of V2G storage service provision. Recent trends for the value derived from participation in V2G storage.

Sell

If LBMP>TOU Purchase Price

Scenario 1: Arbitrage-Guided V2G1. Use battery capacity during one-way commute in morning.2. While connected to grid at work, sell electricity during hours where

Location-Based Marginal Price (LBMP) > Time-of-Use (TOU) Purchase Price from the user’s utility.

3. Use battery capacity during one-way commute in afternoon.4. While connected to grid at home, sell electricity during hours where

LBMP > TOU Purchase Price.5. Charge to specified maximum state-of-charge during nighttime off-peak.

Only discharge to specified maximum depth-of-discharge + one-way commute energy requirement.

Scenarios Modeled in Analysis

Sell

If LBMP>TOU Purchase Price

Buy

Scenarios Modeled in Analysis

SellBuy

Scenario 2: Work-Hour Price Taker V2G1. Use battery capacity during one-way commute in morning.2. While connected to grid at work, sell electricity no matter what.3. Use battery capacity during one-way commute in afternoon.4. Charge to specified maximum state-of-charge during nighttime off-peak.

Only discharge to specified maximum depth-of-discharge + one-way commute energy requirement.

Scenarios Modeled in Analysis

If LBMP>Defined Price

Sell

Scenario 3: User-Defined Selling Price V2G1. Use battery capacity during one-way commute in morning.2. While connected to grid at work, sell electricity when LBMP > user-set

selling price requirement.3. Use battery capacity during one-way commute in afternoon.4. While connected to grid at home, sell electricity when LBMP > user-set

selling price requirement.5. Charge to specified maximum state-of-charge during nighttime off-peak.

Only discharge to specified maximum depth-of-discharge + one-way commute energy requirement.

BuySell

If LBMP>Defined Price

Application 1: Simplified V2G Economic Model To show how V2G storage should work, a one-year simple model was created.

A simulated electric utility Time-of-Use Purchase Rate Structure was created.

Peaks and semi-peaks correlate with load profile by season.

The simplified sinusoidal LBMP structure acts as the effective electricity selling price.

Application 1: Results of Simplified Model

*Key assumptions: Single battery electric vehicle with 30 kWh battery 2.75 kWh of battery capacity is used for one-way commute The point of grid connection can provide 7.2kW of charging or discharging (240V, 30A) The max depth-of-discharge is 80% and the max state-of-charge is 80% For the user-defined scenario, the seller requires a minimum of $0.15/kWh

Application 2: New York City ISO Electricity Data

𝑅𝑉 2𝐺(𝑡)=𝐿𝐵𝑀𝑃 (𝑡 )∗𝐸𝑠𝑜𝑙𝑑(𝑡)

Minimum increases $0.90

Maximum increases $0.93

Interquartile Range of ~$0.03 – ~$0.07

Zonal load trend is mostly level. Minimum ~4GW all 5 years. Median ~6GW all 5 years. Maximum ~11GW all 5 years.

Application 2: Local Utility Pricing Structure

𝐶𝑉 2𝐺 (𝑡 )=𝑐 h𝑐 𝑎𝑟𝑔𝑖𝑛𝑔 (𝑡 )+𝑐𝑑𝑔𝑑𝑛(𝑡)

Charging period

Application 2: Automobile Data in Analysis

Make Model Battery Capacity (kWh)

Range (mi)

Grid Connection Power (kWRated)

BMW i3 19 81 7.4 Chevrolet Spark 19 82 3.3 Fiat 500e 24 87 6.6 Ford Focus 23 76 6.6 Honda Fit 20 82 6.6 Kia Soul 27 93 6.6 Mercedes B-Class 28 87 10 Mitsubishi iMIEV 16 62 3.3 Nissan Leaf 24 84 6.6 Tesla S – 70 66 240 10 Tesla S – 85 78 270 10 Volkswagen eGolf 24 83 7.2

The average modern BEV has a battery capacity of 31kWh and level-2 charging infrastructure capable of delivering 7kW at ~86% efficiency.

Range is also increasing with new BEVs, allowing more battery to be committed to V2G service provision.

For the results that follow: Net Economic Benefit values are given by:

One-way commute distance is set at 10 miles. User work hours are 9:00am – 5:00 pm Grid connection one-way efficiency is 86%. Storage price trend derived from research. Max depth-of-discharge is set at 80% and

max state-of-charge is set at 80%. Battery degradation cost (cdgdn) is calculated

by dividing the cost of battery storage and replacement labor by the cycle life of the battery.

Optimistic battery life is set at 5,000 cycles to 80% original capacity.

Application 2: Assumptions

Source: Deutsche Bank Markets Research. (2015) Crossing The Chasm. New York, NY: Shah & Booream-Phelps.

Application 2: Arbitrage-Guided V2G Results & Comments

Little value exists for Arbitrage-Guided V2G on average.

However, a general upward trend in economic benefits exists as battery prices improve and LBMP range shifts toward higher maximum extremes.

Application 2: Work-Hour Price Taker V2G Results & Comments

Being a price taker results in large losses due mainly to degradation costs.

However, the upward trend in benefits persists in the case of Work-Hour Price Taker V2G.

Application 2: User-Defined Selling Price V2G Results & Comments

Optimal selling price of at least $0.39/kWh allows participants to take advantage of extreme price fluctuations while limiting added battery cycling.

Positive benefit is seen over all car models if users set their selling price intelligently.

$0.39

Battery/Power Electronic Sensitivities

As stated previously, the average BEV has a 31kWh battery, a 7kW level-2 charger, and an approximate range of 100 miles per charge.

Charge/Discharge efficiency is very important in this application.

This analysis presents the value of providing V2G energy storage services using a wide range of available technologies. 12 unique, current BEV models to choose from Five unique point of connection characteristics

Participant choice is central to this model. Three economically-derived scenarios of participation Flexibility in work/commute hours and distance Participant chooses max depth-of-discharge and max state-of-charge for

his/her battery User defines selling price requirement where applicable

A particular emphasis is placed on the recent trend of consumer benefit with the emergence of new technologies.

Concluding Remarks