A technology developed by the University of Delaware (UD) and NRG Energy that provides a two-way interface between electric vehicles and the power grid earlier this year became an official paid resource on PJM Interconnection’s regional grid (Figure 4). One of the first of its kind, the project proves the so-called “vehicle-to-grid” (V2G) concept can sell electricity from electric vehicles.

The V2G concept supports widespread adoption of electric vehicles and seeks to support the reliability of the grid by providing ancillary services. It essentially facilitates bidirectional electricity transfers to and from electric vehicles.

As UD explains, a grid-integrated vehicle (GIV) is always “a net load to the system over time.” It has to charge a battery before it can deliver that same energy, minus conversion losses, back to the grid. The GIVs being produced in Delaware will have the ability to charge or discharge at a capacity of 19 kW. The GIVs will also be aggregated together as one electric power resource “so that grid operators don’t have to interact with thousands of vehicles,” UD says. A UD and NRG Energy joint venture has set up an aggregator that monitors different energy markets and bids into those markets according to their aggregated vehicles’ available capacity and market price.

This February, the project became an official participant in the PJM’s frequency regulation market. Since then, the project has been selling power services from a fleet of electric vehicles to the regional transmission organization. BMW provided the electric vehicles, Milbank Manufacturing provided charging stations based on UD technology, and AutoPort installed UD control technology into the electric vehicles. UD says the system is still in development, however; its restricted test fleets are not yet a commercial offering.

The project got its boost with a September 2009 Delaware law—one of the first of its kind in the world—that requires electric utilities to compensate electric car owners for electricity sent back to the grid at the same rate they pay for electricity to charge the battery. PJM also changed its rules for participation in the regulation service market to decrease the minimum amount of power needed to participate. “We implemented new rules that recognize and compensate faster, more accurately responding resources, such as batteries,” Michael J. Kormos, a senior vice president at PJM said.

Experts note that a V2G aggregator also benefits from open-access transmission rules promulgated by the Federal Energy Regulatory Commission, which requires grid operators to purchase ancillary services from the generator providing them at the lowest available cost. Otherwise, the general legal and regulatory environment is “not optimized” to accommodate the V2G concept, as industry experts Matt Hutton and Tom Hutton write in a 2012 journal article published in the William & Mary Environmental Law and Policy Review.

Several questions remain unanswered. For example, who is entitled to what portion of the economic benefits—the owner of the battery or the entity that pays for the electricity used to charge the battery? Another apparent hurdle is modifying state net metering laws to accommodate V2G (only Delaware has a net metering statute that explicitly includes vehicles). Still, regulatory changes needed “are not expected to be especially controversial,” the authors say, noting “no serious opposition has materialized from industry groups.” Several of the hurdles are simply manifestations of uncertainties in the business environment. Of the more properly legal and regulatory impediments, most are “expected to be surmountable,” they say.

A number of studies point out that electric vehicle developers must, meanwhile, work to allay worries by potential consumers regarding range anxiety, long charging time, and high purchase prices. The consensus among experts is that though customers are willing to pay high premiums for electric vehicles, battery costs need to drop considerably if electric vehicles are to be competitive without subsidies at current U.S. gasoline prices.

Concerns of battery discharges to already range-limited vehicles are being dealt with. “GIVs will have a controller that allow the vehicle owner to limit the amount of battery discharge to ensure they can meet the range needed for their next driving event,” says UD. On the flip side, vehicle owners can generally expect to be paid between $400 and $5,000 a year, depending on the energy market, it says.