But vehicle-to-grid (V2G) electrification flips that around: If components and communication systems between car and grid evolve as planned, owners of electric vehicles will be able to generate income to offset the premium they pay for their cars by selling power back to utility companies at times of peak usage.
In April, the nonprofit Institute of Electrical and Electronics Engineers and the Society of Automotive Engineers signed a memorandum of understanding calling for the two organizations to agree on future national standards for vehicle-to-grid electrification.
NextEnergy has agreed to help develop those national standards. This spring, NextEnergy will begin testing components and electric cars in a building adjacent to its Detroit headquarters that houses what is called a microgrid that is already hooked up to DTE Energy.
Gauthier
"This could be a way to have a market subsidy," said Gary Gauthier, NextEnergy’s director of business development. "This isn’t near term. We need to get the OEMs involved. Realistically, it’ll be three to five years before we even have small-scale operations up and running.
According to a report in November by Pike Research, 100,000 electric vehicles could be feeding power back into the national grid by 2017.
Prognostications by industry observers and technology publications vary from "this will prove to be much ado about nothing," to it will be a revolution in power generation in coming decades that will help free us from dependence on oil.
A 2010 report by the IEEE called vehicle-to-grid technology "the most promising opportunity in electrical vehicle adoption" but that "due to certain technical and economical issues, it is still less likely to become a reality in the short term."
The report also referred to a study that estimated a potential return to electric vehicle owners on the California power grid of between $3,038 and $5,038 per year.
Meanwhile, Willett Kempton, director of the Center for Carbon-free Power Integration at the University of Delaware, serves as a proof of concept. He set up his electric Scion to feed power back to the grid in 2009 and claims earnings of about $300 a month since then.
Marc Spitzer, a member of the Federal Energy Regulatory Commission, which regulates interstate transmission of electricity, told a conference in Boston that "vehicle-to-grid is, I believe, the salvation of the automotive industry in the United States."
Gardhouse
Both Gauthier and Ron Gardhouse, NextEnergy’s CEO and president, say Spitzer wildly overstates the case in terms of the auto industry, but nonetheless there is a huge economic potential.
"If this is going to happen, Detroit should own it," said Gardhouse, who said the long-range plan for NextEnergy is to help Michigan companies become suppliers of components and equipment needed to make vehicle- to-grid electrification commonplace.
"We need to work with the utilities and the auto companies to prove that there’s a business case to be made," said Gauthier. "Does this work. Can there be a business there? Can you get enough money flowing for it to make sense?"
Gauthier said one of the Detroit 3 he doesn’t have permission to name has agreed to provide vehicles, and others may, as well. He said he has had talks with DTE and expects a formal partnership with it, also.
He said the project will be funded in part by the Michigan Economic Development Corp. and in part by grants the nonprofit will be seeking from the U.S. Department of Energy and the Department of Defense.
Gardhouse said that with enough funding the project could expand to fill all six bays in the microgrid building.
The cost of the two-bay phase one will approach $2 million, he said.
He said NextEnergy will also work on inductive charging, a system where cars don’t need to plug in but are charged wirelessly just by parking over a floor fitted with the proper equipment.
"Plugging in is eventually going to be old fashioned," said Gauthier.
If vehicle-to-grid electrification becomes a reality, a likely model is for a company known as an aggregator to work on behalf of utility companies to line up owners of electric vehicles. It will also require substantially more penetration by EVs into the new-car market, said Gauthier.
Meanwhile, NextEnergy has ordered a $500,000 piece of equipment known as a dual bi-directional charging model to serve as the guts of the two-bay station the nonprofit hopes to have on line by the end of May. He said the bays will test different types of charging systems, new batteries as they evolve and systems operating at different voltages and frequencies.
The car-to-grid model becomes more realistic as the cost of solar panels continues to fall. A dramatic price drop in the past year has led to a shakeout in the industry, but higher sales volumes for those companies left standing.
As more electric cars get recharged from renewable sources such as solar energy, the return to their owners when they sell electricity back to the grid will be higher than if they are just selling back electricity to the power company that they bought earlier at slightly lower rates.
Tom Henderson, www.crainsdetroit.com
