In his interview with IMET, Jayson Dong, Policy Manager at AVERE and partner at the SEEV4City Project, speaks about the lessons learned from the completed project and what is needed to replicate successful business models across Europe.
What is the SEEV4City project about?
The SEEV4-City project supported the transition to a low carbon economy in European cities. Through six innovative pilot projects, it combined electric transport, renewable energy (generation, storage and consumption), electricity grid and smart energy management. One of the core objectives was to introduce the concept of “Vehicle for Energy Services” (V4ES) into sustainable commercial/social business models.
The six operational pilots across the United Kingdom, Belgium, Norway and the Netherlands explored and attempted to develop business models, based on the following topics:
1. Implementation of RES to charge EVs and a stationary battery energy storage
2. Use of EVs for storage of electrical energy
3. Variation in EV charging in response to local or central (grid) renewable energy generation
4. Vehicle-to-Grid (V2G) applications
5. Balancing the grid (supply-demand)
6. Energy market participation
7. Provide back-up services
"One of the core objectives (of SEEV4-City) was to introduce the concept of “Vehicle for Energy Services” (V4ES) into sustainable commercial/social business models. The six operational pilots across the United Kingdom, Belgium, Norway and the Netherlands explored and attempted to develop business models."
Specifically, the project attempted to measure the potential of improvements in energy autonomy, carbon footprint savings (i.e. reduction in CO2 emissions), and grid infrastructure deferral, as well as the overall cost- effectiveness of modified Total Cost of Ownership/Use.
New and second-life EV batteries were tested providing frequency services and replacing fossil fuel backup generators. The pilots integrated locally generated renewable energy and its smart uptake by electric vehicles successfully. In one of the pilots, a household in Loughborough, UK, a 30% increase in energy autonomy through the application of V2G was achieved. At the Amsterdam ArenA, experience was gained with cyber security (connection of components) and safety requirements for big energy storage systems. Finally, ICT systems for energy management were developed and tested.
In all pilots and host cities, the dedicated research and dissemination also contributed to the development of spin-offs, new strategies and policies as well as new investments and opportunities.
What were the main benefits for the pilot cities and consumers?
In each of the pilots the key benefits for both consumers and municipalities were reduced energy bills as a result of the smart charging capabilities. In some cases this was due to PV self-consumption and smart energy management or energy arbitrage. In certain instances, consumers even reduced the cost of charging as a result of the PV self-consumption and energy arbitrage.
"In each of the pilots the key benefits for both consumers and municipalities were reduced energy bills as a result of the smart charging capabilities."
Overall, the consumer acceptance of both e-mobility and the use of innovative EV technology such as third-party control of charging sessions were achieved. For instance, in the Flexpower pilot project in Amsterdam, which incentivised consumers to charge their electric vehicles during off-peak hours, an average reduction of 1.1 kW per charging station was realized. This translates into the avoided grid investments of around €47,000 for the population of 430 charging stations which significantly strengthened the grid on the long term.
What are your lessons learned? What is needed to successfully replicate the successful business models across Europe?
One of the key lessons learned from the pilots is that there is no single, generic, universally-applicable V2X business model. The tariffs in each region/country are different and vary by the type of consumer (household / commercial / municipal / industrial).
The success of vehicle for energy services also depends on battery cost (which is continually declining) and on being able to accurately quantify the impact of V4ES on battery life. Battery degradation depends on several factors, including the chemistry of the battery, production and conditions of use. Thus, it is difficult to quantify, and current estimates vary significantly. Accurate determination of battery ageing mechanisms (degradation factors) and state-of-health will enable optimum charging and discharging control strategies without adversely impacting battery life and permit economical V4ES. This will also improve the residual value of the EV and reduce the total cost of ownership of EVs. At the same time, the key for increasing the confidence of EV users to participate in V4ES is to have a dynamic model for battery state-of-health that can be used in real-time.
"There is no single, generic, universally-applicable V2X business model. The tariffs in each region/country are different and vary by the type of consumer - household / commercial / municipal / industrial".
As such, today, smart charging is still a more viable business model compared to V2X due to the fact that smart charging units are less expensive. There is also a wider availability of smart charging compatible EVs compared to those who can technologically perform V2X functionalities and the current electricity grids are able to accommodate smart charging technology. In order to also ensure effective integration with solar PV integration, consumers will also need better incentives to charge during the day, or during off-peak hours overall. Nevertheless, V2X does have a high research and innovation value in anticipation of future developments.
By and large, what is still needed to scale up appropriate business models are regulation, policies and incentives as well as disincentives (for conventional vehicles).
What are your recommendations to policy makers?
The policy recommendations derived from the pilots address local, regional, national and EU levels. The recommendations cover a variety of issues including the currently restrictive regulatory and fiscal framework, the need for standardisation and communication protocols, the designs of subsidy schemes and other incentives, and the need for awareness raising and further research.
At the municipal level, the SEEV4-City project recommends that Sustainable Urban Mobility and Energy Planning/Plans need to be more holistically integrated from across the mobility and energy sectors, into a concept termed Sustainable Urban Mobility and Energy Planning/Plans (SUMEP/s). On top of this, consumers need to be empowered through the provision of appropriate prices incentives through tariffication structures and flexible pricing contracts.
"At the municipal level, the SEEV4-City project recommends that Sustainable Urban Mobility and Energy Planning/Plans need to be more holistically integrated from across the mobility and energy sectors, into a concept termed Sustainable Urban Mobility and Energy Planning/Plans (SUMEP/s). At the national and EU levels, the recommendations include establishing a clear political commitment and explicit regulatory framework through the European Green Deal."
At the national and EU levels, the recommendations include establishing a clear political commitment and explicit regulatory framework through the European Green Deal - especially through the Strategy for Smart Sector Integration & Strategy on Sustainable and Smart Mobility. With this establishment smart charging and Vehicle-Grid-Integration’s potential will be fully enabled for climate protection, and a transport- and energy transition.
Current barriers also need to be addressed (i.e. through the effective implementation of the Clean Energy Package) to allow for a full market participation of flexible electric loads such as smart charging infrastructure and V2G solutions, as well as flexible tariff structures, across the EU.
At the same time, taxation legislation and subsequent barriers need to be resolved in order to facilitate the process for consumers becoming prosumers. This includes revising the EU level Energy Taxation Directive so that consumers are able to receive tax exemptions on the energy stored in the EV Battery, to be used for grid services. This combined with the favourable taxation of electricity consumed off-peak could be set in order to encourage storage/ consumption at off-peak times.
More information about the project can be found on: http://www.northsearegion.eu/seev4-city/