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Can parked cars and carbon taxes create a profit? The economics of vehicle-to-grid energy storage for peak reduction

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  • Freeman, Gerad M.
  • Drennen, Thomas E.
  • White, Andrew D.

Abstract

This article discusses a five-year, hourly economic model of vehicle-to-grid energy storage for peak reduction. Several scenarios are modeled for a participant using a 60kW-h capacity battery electric vehicle, such as the Tesla Model S or Chevrolet Bolt, in the New York City area using pricing data for the years 2010 through 2014. Sensitivity analysis identifies that variables such as one-way power efficiency and battery lifetime are the major factors influencing the economics of selling electricity back to the grid. Although it is shown that vehicle-to-grid electricity sales can create positive economic benefits, the magnitudes are small due to the cost of added degradation to the vehicle's battery and are not likely to entice the average electric vehicle owner to participate. However, over the five-year period, the potential economic benefits of this technology have shown a promising trend. A carbon dioxide tax is examined as a potential policy measure to encourage vehicle-to-grid adoption. The implementation of a carbon dioxide tax is shown to create additional opportunities for economic gain but, these benefits are dependent on the grid's electricity generation portfolio. Added benefits from the tax are also small in magnitude considering current international carbon prices.

Suggested Citation

  • Freeman, Gerad M. & Drennen, Thomas E. & White, Andrew D., 2017. "Can parked cars and carbon taxes create a profit? The economics of vehicle-to-grid energy storage for peak reduction," Energy Policy, Elsevier, vol. 106(C), pages 183-190.
    • Handle: RePEc:eee:enepol:v:106:y:2017:i:c:p:183-190
    DOI: 10.1016/j.enpol.2017.03.052
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    References listed on IDEAS

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    1. Björn Nykvist & Måns Nilsson, 2015. "Rapidly falling costs of battery packs for electric vehicles," Nature Climate Change, Nature, vol. 5(4), pages 329-332, April.
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    3. Esther H. Park Lee & Zofia Lukszo & Paulien Herder, 2018. "Conceptualization of Vehicle-to-Grid Contract Types and Their Formalization in Agent-Based Models," Complexity, Hindawi, vol. 2018, pages 1-11, March.
    4. Liu, Junbei & Zhuge, Chengxiang & Tang, Justin Hayse Chiwing G. & Meng, Meng & Zhang, Jie, 2022. "A spatial agent-based joint model of electric vehicle and vehicle-to-grid adoption: A case of Beijing," Applied Energy, Elsevier, vol. 310(C).
    5. Mikołaj Bartłomiejczyk & Leszek Jarzebowicz & Roman Hrbáč, 2022. "Application of Traction Supply System for Charging Electric Cars," Energies, MDPI, vol. 15(4), pages 1-13, February.
    6. Greaker, Mads & Hagem, Cathrine & Proost, Stef, 2022. "An economic model of vehicle-to-grid: Impacts on the electricity market and consumer cost of electric vehicles," Resource and Energy Economics, Elsevier, vol. 69(C).
    7. Arshdeep Singh & Shimi Sudha Letha, 2019. "Emerging energy sources for electric vehicle charging station," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(5), pages 2043-2082, October.
    8. Stef Proost & Mads Greaker & Cathrine Hagem, 2019. "Vehicle-to-Grid. Impacts on the electricity market and consumer cost of electric vehicles," Discussion Papers 903, Statistics Norway, Research Department.
    9. Matsuo, Yuhji & Endo, Seiya & Nagatomi, Yu & Shibata, Yoshiaki & Komiyama, Ryoichi & Fujii, Yasumasa, 2018. "A quantitative analysis of Japan's optimal power generation mix in 2050 and the role of CO2-free hydrogen," Energy, Elsevier, vol. 165(PB), pages 1200-1219.
    10. Jenn, Alan PhD & Brown, Austin PhD, 2021. "Green Charging of Electric Vehicles Under a Net-Zero Emissions Policy Transition in California," Institute of Transportation Studies, Working Paper Series qt2rv3h345, Institute of Transportation Studies, UC Davis.
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    13. Jenn, Alan, 2023. "Emissions of electric vehicles in California’s transition to carbon neutrality," Applied Energy, Elsevier, vol. 339(C).
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