Day: May 17, 2024

a/ Benefits for public finances & grid investments

V2X integration offers a multifaceted solution, one with the potential to unlock a wide range of benefits across various domains. Foremost among these, V2X – as with other flexibility resources – complements conventional grid reinforcement measures, helping alleviate the strain on existing infrastructure while enhancing its resilience. We are already starting to see increasing tensions in the grid and the overwhelming need to reinforce it; therefore, the deployment of V2X and the use of EVs as batteries represents a ‘no-brainer’[i] and would effectively smooth the rollout of grid reinforcement, something that usually takes between 5-15 years. V2X integration thus offers access to a realm of ‘low-hanging fruit’ opportunities, allowing the cost-efficient adaptation of the grids to growing electrification.

b/ Benefits for Europe energy autonomy

The integration of V2X will help deploy renewable energy sources (RES), by providing efficient storage solutions. It has the potential to help balance the grid and increase the penetration of renewable electricity (RES-E) into it, thus accelerating the drive to climate neutrality. Indeed, in order to ensure generation adequacy – key for the energy transition – V2X will be pivotal. As intermittent renewable energy becomes increasingly prevalent, maintaining grid stability and meeting demand poses significant challenges. Here, V2X solutions can play a crucial role in balancing supply and demand, enabling dynamic resource adequacy analyses that realise the enormous potential of V2G capabilities.

c/ Benefits for grid operators

From the perspective of the grid operators, there are manifold advantages. For Transmission System Operators (TSOs), V2X is particularly beneficials for Frequency Regulation (FCR) Services, which are pivotal functions for TSOs. In addition to mere savings in battery costs, V2X optimises both standalone and grid-connected storage battery systems. FCR plays a critical role, not only in reducing the necessity for investment in battery storage services but also in minimising the need for grid upgrades. These efficiencies translate into systemic savings, ultimately benefiting electricity consumers. For DSOs, V2X can play a major role in local flexibility markets and congestion solutions providing services to DSOs and representing a valuable flexible resource that can be procured to ease tensions on distribution grids. This requires flexibility mechanisms in which V2X value can be stacked based on related remuneration. To enable even more value of V2X for every DSO, market based procurement of flexibility based on V2X shall be stimulated.

d/ Benefits for users, people and businesses alike

From an end user’s perspective, the benefits of V2X integration will be substantial. Through leveraging V2X capabilities, users will have the opportunity to earn money from feeding energy into the grid, thus enhancing the overall value proposition of electric mobility.[ii] Remuneration mechanisms (such as those based on availability, capacity or time) will trigger further consumers to participate; once they do so, they will naturally generate demand for V2X. V2X integration will not only enhance grid resilience and promote renewable energy uptake but also pave the way for a more sustainable, efficient and adaptive energy ecosystem, one where EVs can equally participate in flex mechanisms.

Despite the potential offered by V2X integration, several barriers continue to hinder its widespread deployment. Overcoming regulatory, technical and market hurdles will require concerted efforts.

a/ Implementation of the Electricity Market Design

At the forefront of these challenges are regulatory barriers, most notably the lack of implementation by MS of the 2019 Electricity Market Design, which discriminates and disincentivises the participation of V2X in the electricity markets. To address this, there is an urgent need for MS to accelerate their implementation.

b/ Double Taxation

One of the asks of battery stakeholders (EVs and stationary) is to eliminate double taxation; that is, the taxing again of electricity injected into the grid from a battery. Double taxation[i] remains a persistent concern, particularly in scenarios where energy storage is integrated with other loads. While progress has been made in mitigating double taxation for large-scale storage, challenges persist for small-scale storage assets such as V2X. For example, in Germany, double taxation for stationary storage has been removed, yet remains in place for mobile storage.

c/ Uncoordinated grid requirements

The absence of the anticipated regulations, coupled with limited access to organised markets and revenue streams, poses significant challenges to V2X deployment. Uncoordinated grid requirements and standards between countries are exacerbating these challenges, hindering interoperability and complicating cross-border deployment efforts. Divergent communication standards and disparate smart meter adoption rates – something that is particularly evident in countries such as Germany, which has low penetration rates – underscore the urgent need for harmonisation and standardisation initiatives to realise the full potential of V2X integration.

a/ Coherence across Member States

As the EU navigates the complexities of V2X integration, it is vital to address the prevailing divergences among MS and to foster a cohesive regulatory framework that promotes innovation and harmonisation. Despite incremental progress, no MS has successfully removed all barriers to V2X deployment, underscoring the imperative for EU-level intervention. For V2X for slow public charging, we therefore call for national capacity targets – rather an EU-wide one – because the share of cars without access to off-street parking at home differs significantly between MS.

b/ Coherence across EU legislations and regulations

To advance implementation of V2X and harness its manifold advantages within Europe, it is crucial that the newly installed European institutions adopt a holistic approach to this challenge. All V2X-relevant measures should be in the form a comprehensive regulatory framework, rather than addressing them in isolated discussions, or rather than discussion technologies (AC vs DC). One way of ensuring this seamless integration across diverse legislative frameworks – and avoiding a fragmented approach – is to establish political ownership.

c/ Multilevel coherence on V2X

Cities will, in general, be the key enablers and accelerators of V2X due to the alignment between clean air and decarbonisation strategies (such as growing adoption of zero-emission zones, electrification of heating as an alternative to petrol/gas/wood). V2X should therefore be part of an integrated mobility and energy strategy at all territorial levels. We therefore call upon the EU to adapt the proposed SUMPs/SULPs into SUMEPs/SULEPs (Sustainable Urban Logistics/Mobility and Energy Plan). This will ensure coordinated and integrated planning, helping couple mobility/logistics with energy aspects

d/ Double mandate to jumpstart the market.

Mandating V2X interoperability for all bidirectional-capable vehicles, while at the same time requiring V2X capability for public fleets and buildings would be decisive in kickstarting the market and boosting widespread adoption. It would also ensure flexibility for independent aggregators and promote the use of submeters. Requiring interoperability and encouraging public fleets to lead by example will help jumpstart the market.

Additional measures, including addressing communication standards and issuing non-binding guidelines for MS, will be essential for fostering coherence and facilitating the transition towards a sustainable, interoperable V2X ecosystem. With upcoming revisions to key pieces of legislation now on the horizon, it is an opportune moment for the European Commission to demonstrate leadership and to spearhead concerted action to achieving V2X integration goals. By embracing coherence at an EU level, policymakers can unlock the full potential of V2X technologies and accelerate the shift to a smarter, greener future.