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Vehicle To Grid Savings Fallacy

June 3, 2021

By Paul Homewood

 

h/t Ian Magness

 

 

 

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Electric car drivers could earn more than £700 a year selling surplus power back to the grid, according to a government-backed study.

More than 300 homes had chargers installed in their homes that enabled them to sell electricity back to the grid that was stored in their car batteries, in the world’s largest trial of its kind.

The study found that consumers could make up to £725 a year when signed up to tariffs that enables a tech platform to take power from the vehicle’s battery for the grid when national supplies were low.

That could fall to £555 when upcoming changes to electricity charges planned by Ofgem come into force.

But installing a vehicle-to-grid charger will currently set drivers back between £4-5,000, compared to around £1,200 for a regular smart charging device.

The authors of the report, known as Project Sciurus, suggested this figure could come down to around £1,000, plus installation, within a year, making the payback period around 3 years.

Energy companies, green groups and EV manufacturers are keen to emphasise the lifetime savings that can be made by switching from fuel to electric cars.

Three energy companies, Ovo, Octopus and Centrica, now offer tariffs that enable drivers to sell their electricity back to the grid. 

https://www.telegraph.co.uk/environment/2021/06/03/electric-car-drivers-could-earn-725-year-selling-power-back/

 

The first point which sticks out like a sore thumb, is the need for a V2G charger, at a cost of £4000 to 5000. This would surely put it out of the reach of most people, despite the potential savings. It is claimed this cost could come down to £1000, but we have heard that old pony before.

But, much more fundamentally, you cannot magic money out of thin air. Car batteries do not reduce the cost of electricity generation, so any “savings” from V2G must be paid for by somebody else. (Or, more likely, the EV driver finds that he is paying more on his tariff instead!)

I have had a closer look at Octopus Energy, who are named in the article.

They pay 5.5p/KWh for electricity exported back to the grid by householders (whether from cars, solar panels or batteries):

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https://octopus.energy/blog/outgoing-update/

 

However, their current electricity tariff charges 18.15p/KWh, so it clearly would make no sense charging the car, only to sell power back!

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It is true that they offer a package called Octopus Go, which charges 5p/KWh at night; however customers are not allowed to be on both schemes at the same time. Anybody using GO only gets paid 3p/KWh for exports.

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The only other option is called Octopus Agile, which charges half hourly pricing for both consumption and exports. There is no guarantee of course that the latter price will be as high as the former, as they are calculated differently. (Exports are based on wholesale pricing). According to their database however, the average export price was 6.7p/KWh in 2018/19, so drivers should not expect to make a mint.

All in all, although it is feasible to charge your car at low off peak prices and export back at a higher price during the day, any savings are likely to be offset by higher electricity costs during the day for other applications.

And all this is before we take account of the effect on battery life from constant charging/discharging.

39 Comments
  1. June 3, 2021 2:33 pm

    So someone produces the energy, sells it to the grid. Then you buy said energy to charge your car and then you sell the same “bit” of energy back to the grid. Hmm.

    • Phoenix44 permalink
      June 3, 2021 2:47 pm

      And of course we all register to charge the VAT…

      What, we don’t get to charge VAT because we are not businesses? But we pay VAT on the energy we bought.

  2. Ray Sanders permalink
    June 3, 2021 2:37 pm

    Apart from the obvious financial failings of this system that Paul has so expertly pointed out, there is the misnomer of “Vehicle to Grid” in the first place. Your domestic home charger connects to one phase of the nearest 230V step down transformer of the local District Network. At best you can only export to others on the same voltage level running off that same last transformer and same phase and that may only be a small number of houses in the very near vicinity.
    Any export cannot go into any higher voltage level as the transformers (although technically able to transform back up to a higher level) will not in reality be able to do that.
    Unfortunately many people are falling for this “Grid” concept as their part of “saving the planet” baloney. There is a common misconception that this surplus stored energy in one place can somehow be transmitted around the “grid” everywhere but it simply cannot.

    • MikeHig permalink
      June 4, 2021 4:31 pm

      Ray,
      Thank you for pointing out that bit of devilry in the detail.
      So the effect can only be local. I guess it would appear as a reduction in demand at that local transformer station.
      I imagine one reason for not trying to run the transformer “in reverse” will be the safety considerations.

  3. johnbillscott permalink
    June 3, 2021 2:44 pm

    I am under the impression that all rechargeable batteries have an inbuilt number of charging cycles and as the recharging cycles increase the performance of the batteries decrease, I read somewhere that high rate charging further decreases battery performance significantly. Does anyone have facts on this?

    I remember that when rechargeable batteries were introduced for domestic use some years ago, they were useless after too many charges and that is why we do not see them too much today

    • Phoenix44 permalink
      June 3, 2021 2:49 pm

      I believe that’s right. Rechargeable batteries have a finite life, so if you do this regularly you will shorten the life of your EV considerably.

    • June 3, 2021 4:11 pm

      Fast charging is indeed bad for batteries (someone needs to tell smartphone users not to use their fast chargers), so the magic word “smart” is now used for fast car chargers, not mentioning the fact that smartness actually means reduced speed, in order not to generate the heat that does the damage.

  4. Phoenix44 permalink
    June 3, 2021 2:45 pm

    This is utter nonsense. Any arbitrage in pricing will vanish extremely quickly as arbitrages are wont to. And the inefficiencies in the system cannot be worth having. Does it really make sense to have hundreds of thousands of small batteries as storage that you draw from – if they happen to be connected when you need them?

    • Lewis permalink
      June 3, 2021 9:19 pm

      The reason it makes sense to have thousands of small batteries is that their capital cost has already been covered for their primary purpose: transport. This is advantageous compared to the network operators investing in dedicated batteries.

  5. GeoffB permalink
    June 3, 2021 2:48 pm

    UK peak demand is in the evening, 1730 to 1930 so if the EV has got any charge left, you could sell it back at 5.5p/kWh, but it would make more sense to use the power in the battery to run your own home, not using expensive smart meter priced grid energy.

  6. Harry Passfield permalink
    June 3, 2021 2:49 pm

    Ah. I think I’ve got it: I have a couple of nice ICE cars – one for pleasure, one for work. If I fill them both up at the pump but don’t use the ‘pleasure’ vehicle for a week or two I can arrange for a tanker to turn up and syphon off my tank and feed it back into the ‘fuel grid’. Now, I’ve done the petrol stations a favour and given them back something I purchased recently; will they offer me more than I paid for the petrol or less? Then, when I want to use the pleasure vehicle will I have to fill it up again at premium rates or will I get a discount?
    Oh dear. There is a name for this sort of boondoggle but I want to keep it clean.

    • Gerry, England permalink
      June 3, 2021 3:39 pm

      The word ‘ponzi’ comes to mind.

  7. Jack Broughton permalink
    June 3, 2021 3:07 pm

    I guess that we will all have to have batteries (or generators) to cover the rolling power cuts that are almost inevitable with the present policy once we close the remaining coal stations and the old nuclear stations close. I’m still evaluating which to go for, I’m tending towards a second-hand battery system. My biggest concern is that the government nut-nuts will make petrol based generation difficult to prevent home generation for all but the wealthy. As Ray Sanders noted, it is not practical to sell-back large amounts of low voltage power to the grid at present.

    I used to spend a lot of time in various African countries where long power cuts were the norm and hotels and wealthy people all had their own generators ……… we are almost there now.

    • Gerry, England permalink
      June 3, 2021 3:44 pm

      If somebody told you 40 years ago that mankind would be regressing in the 2020s you would think they were mad. Throwing away steady advance since the 1700s I suppose.

      The other option for a generator is a multifuel one that can use gas so if you already have that it should be quite easy. The danger is that gas will be hit with taxes to make it more expensive.

    • Ray Sanders permalink
      June 3, 2021 4:32 pm

      In 1946 my pregnant Aunt and recently demobbed Uncle were so desperate for reasonable accommodation that they actually set up home (with many hundreds of others) in a then disused army camp. There were no “mains” services so water was from one stand pipe, drainage was a hastily built cess pit, and they managed to convert a Victorian field steam engine (formerly used for ploughing) to run a generator. There individual huts were then run on old tank batteries and DC vehicle lighting wiring for lights and to power the valve radio and gramophone. Seems like progress could be taking us “forward” to a not dissimilar situation!
      As a footnote, they lived through the terrible winter of 1947 in that hut and always said they were quite warm.

  8. June 3, 2021 3:29 pm

    Project Sciurus = Project Squirrel

    If an EV owner is supposed to make 725 quid at 5p/kWh then that’s 14,000 kWh. According to the interwebs that’s roughly 4 times an average UK household’s usage.

  9. ianprsy permalink
    June 3, 2021 3:43 pm

    The story doesn’t mention the size of battery needed to benefit to the claimed extent. If it’s a 90kWh battery, you’ll have paid a high price for the car, so another scheme to benefit the well off, probably tax-benefiting user. And what happens when you need to drive the car and range is poor?

  10. It doesn't add up... permalink
    June 3, 2021 3:54 pm

    I read that the trial paid 30p/kWh for discharges. Call it 2.4MWh a year to earn £720. But the roud trip will mean consuming 3MWh of charging. 2.4MWh is about 8,000 miles at 3 miles/kWh, so it implies roughly halving battery life compared with typical EV use.

    Dynamic Containment pays grid batteries £17/MW per hour of availability. That is about £150/kW per year. The V2G systems are 6kW bidirectional, so equivalent compensation would be £900 a year. Of course the grid batteries do include the inverters etc.

    So it looks like a ripoff for electricity consumers, and a ripoff for EV owners at the same time,

  11. Stonyground permalink
    June 3, 2021 4:30 pm

    So, we get a period of overcast weather with no wind. Because all the real power stations have been closed down we are relying on the batteries of people’s electric cars for our power. How are the car owners going to get to work now that their batteries are all flat? Don’t the people coming up with this crap ever stop and think, actually no that would be just stupid?

    • Lewis permalink
      June 3, 2021 9:14 pm

      Vehicle to grid is expected to be useful for very short term applications like frequency response, not for balancing multi-day wind lows. We’ll still need dispatchable generation for that. Gas for the foreseeable, perhaps eventually giving way to hydrogen.

  12. Smithy permalink
    June 3, 2021 4:31 pm

    Maybe a silly question but could I charge my EV directly from the solar panels on my house roof. Subject to weather and daylight?

    • Stonyground permalink
      June 3, 2021 6:45 pm

      If you work night shifts maybe. Otherwise your electric car is going to depend on moonlight to charge it.

  13. June 3, 2021 4:33 pm

    Brilliant plan for hybrids. Generate distributed electricy at peak demand, even schedule it! Electric cars need to be charged when they are parked. What is the sense of emptying your battery when you are parked!? Mindless imagination at work again.

    Millions of distributed generators that you can fire up when needed to meet peak loads. It’s easier to schedule than wind and solar. Good idea, but wrong vehicle.

  14. ecobunk permalink
    June 3, 2021 4:48 pm

    The real fallacy here concerns the object of the exercise. As I understand it, the ultimate aim is to establish enough storage one way or another to compensate for the hopelessly unsatisfactory despatchability of renewables. The sums don’t add up for bulk battery storage, though one or two mammoth batteries may help compensate for the instability brought about by too much renewables. So some simple arithmetic for the UK.

    First for grid scale batteries, assume for an all renewable grid with electric cars and electric heating we would need 2Twh per day, so for 10 days storage we need 20Twh. Using 100Mwh batteries we need 200,000 of them, and if the life is 10 years we must install 20,000 per year in perpetuity, about 50 per day! Of course you can put in different numbers if you disagree with the assumptions, or point out where I got the arithmetic wrong.

    If that’s no good, lets try it for vehicles, and assume 10 million car owners can be persuaded to participate in this scam, and each car can provide 25kwh. Then 250Gwh would be available, about third of a day at present demand. Sounds impressive, eight hours supply. But what then? How do the cars get recharged? We have had well below average wind for over a month. And remember we will need 10 million smart connection points.

    • Lewis permalink
      June 3, 2021 9:22 pm

      This is just to provide very short term grid stabilising functions like fast frequency response, rather than bulk storage. Minutes rather than days. We’ll still need dispatchable generation to balance wind variability.

  15. Joe Public permalink
    June 3, 2021 4:58 pm

    There is also the need to take into account the ’round-trip’ charge/discharge energy losses of 10% – 20% throughout the life of the battery.

  16. Mack permalink
    June 3, 2021 5:05 pm

    The elephant in the room in all this is, of course, that under current energy policies there won’t be enough electricity to go around, never mind any spare power to sell back to the grid. As previous posters have suggested, a multi fuel generator and ample storage facilities might prove a shrewd investment for those with the space and shekels in the bank to do so. However, HMG will, no doubt, try and tax or outlaw such facilities out of existence in due course. They can’t have clever proles gaming a fatally flawed system and showing it up for what it is can they?

  17. June 3, 2021 5:53 pm

    Surely the whole point of having energy in a car battery is to drive around when you want to? Why would you ever want to sell the electrickery back to them meaning your car becomes useless but still a celebration of hydrocarbon ( its construction, all the plastic, the lubricants and the paint)?

    So to check that I understand this correctly.

    First you have to fork out the over inflated price of a gween virtue signalling “car”.
    Secondly you have to fork out another £4000-5000 for the kit to enable you to sell the electrickery back to the grid.

    Then what?

    Why on earth would anyone want to empty a car of it’s means of propulsion? is a tool which needs power to move it. That is a single direction operation.

    Are they thinking about price differentials…selling it at a high tariff time and buying at a low tariff time? Exactly how many thousand years will that take to pay itself back while the tariff variation rules your life…..sorry dear can’t drive to your mother’s today because I can make 1p a KW if I sell the contents of the battery back to the grid as it is daytime so peak usage time.

    Do you ever get the feeling that there are never any adults in the room when these “brain showers” go off?

    • AC Osborn permalink
      June 3, 2021 9:13 pm

      You are correct, because to use the car you still need to charge it after they empty it.

    • Lewis permalink
      June 3, 2021 9:28 pm

      My understanding is that the thinking is to use only a small fraction of the battery’s capacity. Say a car has 200 mile range and the average daily mileage is about 20. Maybe you come home with 150 miles of range left, plug in at 6pm. The car can supply energy during peak time, earning a profit, reducing range to, perhaps 120 miles. Then overnight when demand is low, it can recharge back to full capacity. It could be set never to discharge below, say, 75 miles range for emergencies.

      • Teddy Lee permalink
        June 4, 2021 11:16 am

        “When demand is low”. Recharging using unreliables what could possibly go wrong! It is a catastrophe in waiting.

  18. Coeur de Lion permalink
    June 3, 2021 6:09 pm

    Dear little Emma Gatten should be fired.

  19. Douglas Dragonfly permalink
    June 3, 2021 6:34 pm

    People might be encouraged to hire out their electricity connection and parking space.
    The individual may set the price but all payments must be made electronically so easily taxed.
    Over-priced e-scooters are training vehicles.
    Options might be – use public transport, a scooter, ride a bicycle, horse or walk.
    The majority will work from home. Employers will not want the electricity bill.
    Lockdowns are conditioning for this.

  20. Lewis permalink
    June 3, 2021 9:35 pm

    There’s a bit more to it than what you can earn from fixed export tariffs. There are various payments for providing grid stabilisation services like frequency response. But even in terms of price arbitrage alone, you could see how with a variable tariff like Octpous Agile, you could fill the car overnight at perhaps around 5p/kWh, then run the house from the car over the evening peak period which can be around 30p/kWh. And I believe you can export at dynamic rates too, so could sell back to the grid above 5p at peak times.

    • June 3, 2021 10:03 pm

      But according to Octopus, even under their Agile tariff, the max price is about 10p/KWh for exports. I know of no tariff which offers supplies at less than this other than at extreme times.

      What you have to remember is that Octopus can buy in electricity for around 5p from the wholesale market most of the time, so why should they offer more to captive EV owners?

      • Lewis permalink
        June 3, 2021 10:28 pm

        I think the answer to that is because storage can be valuable in ways that wholesale electricity can’t. Rapid response, avoided investment in peaker plant or grid capacity upgrades, and so on.

  21. Gary Kerkin permalink
    June 3, 2021 10:48 pm

    Is this a scheme intended for nonagenarians who use their vehicle once or twice a month and don’t need the EV batteries fully charged all the time?

  22. Peter MacFarlane permalink
    June 4, 2021 1:47 pm

    Plus, of course, if everybody tries to do it, there won’t be any cheap off-peak electricity anyway.

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