Wishing away regulation won't give us V2G

I believe everyone knows someone that's completely across their subject domain on LinkedIn enough to find things of relevant salience, to bring them into your network's feed and thus proliferate sharing of good knowledge with the world. If you're long on the DER space in Australia, Tim Ryan is probably one such LinkedIn presence - Tim will often repost things of relevance in the DER space with his two cents worth.

Today he's brought us this post which addresses experiences in California and in Germany on barriers limiting the potential of V2X technology. The basic thesis is thus:

• Challenges roughly same between markets
• Discussions also very similar (tech, stakeholder diversity, regulatory expansiveness)
• V2X is ultimately blocked for mass adoption by regulatory barriers

I play a lot with V2X as a technology developer, reg/pol advisor, relevant standards and frameworks developer and occasional crash test dummy/guinea pig. I've been involved in DER uptake from tech development to go-to-market for 10+ years, and in EV development more than that.

The original post is very good and offers a framework I genuinely believe all interested in the space should read. It will have varying impact and relevance the various markets the world over; CA and Germany are important markets but not the only ones and they neither define V2X expectations globally.

IMO suggesting V2x is fundamentally regulatory-limited is a wee bit misleading.

Reality check 1 - we're not flying partly because we're not done building this plane yet

V2G is not yet settled as a technical solution enough for regulators to understand what precisely they're regulating.

(No, really). We're literally still writing Standards for AC CCS V2G that will define how discharge from an EV and grid code compliance can be or needs to be regulated (as I'm writing this, the relevant taskforce quite literally meets later today for what is probably not a final meeting on this). The technical solutions for communications that enable AC V2G are sufficiently divergent as to it simply not being possible or feasible for any market to appropriately regulate a moving target of this nature just yet; (without going into significant detail) grid connection and smart grid integration standards vary around the world - the challenge with AC V2G is to find one approach consistent with all represented. It is not a small task, and one not yet complete.

It is neither useful to point to trials that exist as they're either CHAdeMO (being withdrawn in most markets) or draft CCS implementations (which are not finalised); critically on the latter, they are often implemented divergently region-to-region when the industry is actually working very hard to create consistent solutions that can be implemented in ways that are both interoperable and consistent across markets. This latter sentiment is necessary in enabling key V2G component industries to scale feasibly, which goes hand-in-hand with regulators being able to scale existing, local, regulatory paradigms to incorporate V2G with ease.

There are also open performance questions given implementation pending Standards that affect V2G services participation and relevant value generation in many markets. This isn't alarmist talk - in all scenarios and EV can charge and discharge just fine - but V2G uptake beyond a customer base of early adopters depends on value generation in any given market, and some aspects that could generate tangible value in some markets (e.g., primary frequency response ancillary service delivery - FCAS for the Australians reading this) vary in feasibility depending how relevant communications Standards play out.

The impetus to get this right and the breadth and depth of the process to attempt regulatory compatibility in many markets is something all should be excited for. It's not complete yet. Standards either become regulated or have performance implications that fall within accessible regulatory paradigms. No workable standards yet? Nothing to regulate yet.

Reality check 2 - DC V2G is still expensive and difficult

'But that's AC - what about DC?'

Sure, it's possible to do this DC, however many markets are split with (possibly impending) AC in many regions and at any rate costs are presently prohibitive - they will come down but will not be south of USD$2k wholesale for many offerings for a foreseeable future.

The costs inherent are possibly less important in a go-to-market sense than who bears them and how. AC is very easy to understand; mass-market consumers buy an EV and it does things. If various vehicle OEMs get their way (with or without the promise of Plug&Charge and it's potential to make energy contracts portable to a car - a more salient target of 'things that won't fulfill their scale potential because regulation in many markets right now') then your EV might do things as a service offered by its maker and bundled at point of sale, the marginal cost of which appears small because the enabling capability is intrinsic to the EV. Simple.

DC is harder to understand; you buy an EV. You buy a charging station from someone else. You go hunt down an energy tariff or retail product that makes something of it.

Hot tip from a VPP-future market (Australia) - whilst that's functionally possible, no VPP offering requiring multiple stakeholders to enable (each with their own margins to satiate), which defers key risks to customers and requires them to front-end significant costs... has ever scaled in the mass market - ever - and none will. Having working, reg-compliant kit alone is not enough.

Don't get me wrong - there's some great DC V2G kit out there and coming. Unless it's sold by a vehicle OEM that understands energy in your market (e.g., Tesla could pull this off) or otherwise packaged to be as slick an experience - and these are very market-specific confluences that need to be built - then DC V2G is a tough mass-market argument today. (FWIW IMO those slick experiences can strategically be built - not just by vehicle OEMs - though AC V2G potential/noise has a lot of stakeholders holding out, whether stymied in wondering when and how to get involved, or concerned that investments today may be uncompetitive tomorrow).

Probably worth adding that the CCS Standard enabling DC V2G was released as final last year, and it's a bit of a stretch to expect a humming industry leveraging it and all its interdependencies one year later.

Reality check 3 - 'Genchi Genbutsu' on commercial realities

Whilst other markets suffer on much of what's listed in the OP, in Australia we're otherwise quite ready. Have been for a while - it's not uncommon for people working on V2X technologies in enabling markets to ask Australians (given our relatively mature DER market integration) what V2G is actually worth (we've even got regulatory sandboxing covered). To these ends the post Tim linked is good, but doesn't quite address commercial realities; it reads as though it comes from an early aggregation market perspective.

Fundamentally V2G VPP value generation (particularly in enabling services) has similar costs to stationary storage and considerably impaired availability - many vendors (including a few trying to push solutions in market) will struggle with costs enough to generate tangible value that can be shared with customers in (net) magnitudes sufficient to attract consumer sentiment. Without writing an exposé on current market energy storage DER management costs, it's enough to suggest that in our Australian market where DER revenue potential is relatively high globally, the only vendors proliferating have very aggressive attitudes to cost containment and very vertical integration postures (again - with vertically integrated EV, DERM and now retail energy businesses in our market, Tesla could make significant inroads here).

It's not all negative

The article linked doesn't suggest that technology readiness isn't there and that's 150% important as the tech is broadly ready. Has been for a (long) while and much ready for regulatory, standards, market and commercial integration. I recall an ESB presentation last year where a project lead from a large Australian energy retailer somewhat smugly and imperiously stated that V2G technology wasn't ready and that people needed to stop talking to it as if it was. This person (who I will not name) was as confidently, absolutely wrong last year as they would be now - an inability to integrate technology in a given scenario should never, ever be conflated with technology readiness: V2G is not new. CHAdeMO V2G has been ready a good while now. DC CCS V2G a short while. AC is nearly there. There are a lot of stakeholders taking a bet on the space; the pace of development from some (especially the vehicle OEMs) is (literally) unprecedented. This article doesn't touch on all issues limiting uptake today, but it's a lot shorter on what's positive for V2G's prospects. And there is genuinely a lot to be positive about.

Accordingly with respect to market integration it's odds-on that we will get there. But it's not as simple at critiquing regulatory barriers; if a genie gave Tim three wishes and he used the first to make regulatory barriers to V2G disappear, we'd still need to burn at least one of the others to get uptake today.

(And knowing Tim he'd certainly try though - his committment to sharing knowledge in the DER and energy transition spaces is such that if you're not following his posts, you might do well to.)