How to stimulate Europe’s bidirectional charging market

Mobility and clean energy associations ACEA, ChargeUp Europe and SmartEn in a joint paper have called on policymakers in Europe to ensure the effective functioning of the bidirectional charging market and stimulate user uptake.

According to the associations, although bidirectional charging is crucial to managing the energy demands of the transition to zero-emissions mobility, a number of regulatory challenges are hindering the development of its market and effective business models.

These include issues such as double taxation, complex metering and control requirements, lack of harmonised standards for home and grid integration, and market discrimination against mobile, decentralised flexible energy resources.

In their paper, Shared Vision on Future Development of V2X in the European Union, the associations say how, as new players emerge in the space, business models need to be identified for each.

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Thus, the paper calls for policymakers to consider the following insights from the automotive sector to ensure the effective functioning of this market and stimulate the end user:

• V2X solutions offer long-term benefits for everyone, presenting significant business potential and contributing positively to the EU’s environmental goals of decarbonisation in conjunction with grid stability and energy resilience.
• Harmonising standards and ensuring their implementation across the entire EU is essential. This applies to both vehicles and back-end systems, including certification and homologation.
• The new markets must be built on partnerships, with clear and fair roles and responsibilities established. Customers expect their vehicles to serve primarily for transporting passengers or goods, but they can also be rewarded for the flexible and optimal use of the EV’s battery. Vehicles can also contribute to grid stabilisation and participate in energy markets.
• All future solutions depend on sufficiently robust, flexible, smart and digital grids. Thus, investment into capacity and flexibility of the European grid network is essential to allow V2X solutions to provide benefits for all relevant players.
• The EU must ensure the completion of tasks related to unidirectional smart charging, such as establishing seamless connectivity for the growing number of EV users to easily charge their vehicles across the EU. This would also pave the way for the uptake of bidirectional charging.
• Clearly defining roles and responsibilities for all involved parties, including vehicle manufacturers, is crucial. Currently, states the paper, OEMs and CPOs are not fully considered as an integral part of the energy system and a significant contributor to an optimised grid design. Establishing these definitions within the existing role model framework will enable the development of appropriate business models based on these responsibilities in the future.
• Differences between vehicle segments must be reflected, acknowledging the different use cases for LDVs and HDVs.
• Differences between charging scenarios must be reflected given the differences of use cases between high power charging (DC) on the road and low power charging (AC) at home and everything in between.

Smart grids and making bidirectional charging a standard

The associations in their paper add that road transport electrification will only happen with an electricity system ready for increased demand.

Thus, grids across the EU will need to be reliable, flexible and smart to realise the expected benefits of smart charging (unidirectional or V1G) and V2X applications, necessitating smart and robust power grids.

Additionally, with EVs able to act as short-term (hours/days) mobile storage units, the associations say that their full potential within the energy system will be unlocked when drivers have the option and incentive to feed electricity back to where it is needed.

For this, the technology needs to be user friendly, interoperable and provide financial benefit to reduce the Total Cost of Ownership (TCO) of their EVs. Bidirectional EVs and charging stations should be available at reasonable prices and functionally interoperable across all scenarios and OEMs.

Installing bidirectional charging equipment (such as wall-boxes) must be straightforward for both customers and technical service providers. Integration into an energy management system and registration processes with distribution grid operators should be transparent, easy to execute, and digital. This process should be harmonised across different grid operators.

Unique challenges

However, they add, bidirectional charging presents unique challenges for heavy-duty vehicles (HDVs) in commercial operations, where uptime and total cost of ownership (TCO) are critical.

Unlike passenger cars, HDVs operate continuously and don’t return to a depot every night. They also have an average annual energy consumption roughly 100 times that of a car.

Beyond this specific challenge, state the associations, to enable smooth, secure and interoperable processes between all involved elements and stakeholders, roles and responsibilities must be defined, and various data points need to be shared via standardised communication protocols.

Ongoing discussions between the automotive industry and the energy sector within the Sustainable Transport Forum are focused on crafting a thorough set of essential data points required to facilitate successful V2X use cases, and to also support future business models.

However, they note in their joint paper several key challenges ahead that need to be met to make this happen:

• Enable commercialisation options for V2X at EU level

Even when technologies to integrate EVs into energy grids are available, the criteria and approaches for installation and operation remain fragmented and highly localised.

The EU needs sufficient and appropriate charging infrastructure (decentralised, low power output, long standing times) to support the proliferation of V2X functionality.

• Provide a favourable fiscal framework for V2X services

To make intermediate storage economically attractive, there should be an adjustment in the tax burden.

In some Member States, feed-in fees are charged; in others, intermediate storage is considered ‘consumption’ and is thus fully burdened by taxes, fees and levies. Such differences prevent successful business models for V2X.

Furthermore, energy fed back into the grid incurs additional taxation upon consumption, further complicating and increasing the costs associated with V2X business models. To promote the systemic benefits of V2X, such barriers should be removed.

• Improve metering

Metering concepts must be adjusted to ensure that only relevant energy consumption qualifies for tax exemptions. This adjustment should be carried out in the most practical and straightforward manner to ensure both customer convenience and fraud prevention.

Likewise, smart meter rollouts should be scaled up, and Dedicated Measurement Devices (DMDs) enabled as they play a key role in measuring the amount of flexibility to be activated.

• Enhance customer benefits

Both electricity prices and network tariffs play a key role. Introducing consumers to time-varying electricity prices encourages implicit flexibility and can benefit the grid by encouraging load shifting away from peak periods.

Price signals from network charges and static and dynamic time of use (TOU) and dynamic elements in electricity and network tariffs provide end users with the necessary price signals to adjust their energy consumption. This is in conformity with the Electricity Market Design and should be implemented by Member States without further delay.

Originally published on Enlit World.