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How electric car batteries can support the electricity grid (and convince drivers)

Electric cars are more expensive than gasoline models, largely because batteries are so expensive. But new technology could turn these expensive devices into assets, offering owners benefits like lower energy bills, cheaper lease payments or free parking.

Ford Motor, General Motors, BMW and other automakers are exploring how electric car batteries can be used to store excess renewable energy to help utilities deal with fluctuations in power supply and demand. Car manufacturers are said to make money by acting as an intermediary between car owners and energy suppliers.

Millions of cars can be seen as a huge energy system that is being connected for the first time to another huge energy system, the electric grid, said Matthias Preindl, associate professor of power electronic systems at Columbia University.

“We’re just at the beginning,” Dr. Preindl said. “They’re going to be interacting more in the future, and they can potentially support each other — or stress each other out.”

A large flat screen on the wall of the Munich office of Mobility House, a company whose investors include Mercedes-Benz and Renault, shows how car manufacturers can make a profit while helping to stabilize the electricity grid.

The graphs and figures on the screen provide a real-time view of a European energy market where investors and utilities buy and sell electricity. The price changes from minute to minute as supply and demand rise or fall.

The Mobility House buys electricity when solar and wind energy are plentiful and cheap, and stores it in electric vehicles that are part of the system and plugged in everywhere in Europe. When demand and prices rise, the company resells the electricity. It’s a classic game: buy low, sell high.

People in the auto and energy industries have been talking about using car batteries for grid storage for years. As the number of electric cars on the road increases, those ideas are becoming more tangible.

Renault, the French automaker, is offering Mobility House technology to buyers of its R5 electric compact car, for which the company started taking orders last month. The car, which Renault will start delivering in December, starts at 29,490 euros (about $32,000) in France.

Buyers who choose will receive a free home charger and sign a contract that allows Renault to draw power from the vehicles when they are plugged in. R5 owners can determine how much power they return to the grid and when. In return, they receive a discount on their electricity bill.

“The more they plug in, the more they earn,” said Ziad Dagher, a Renault executive in charge of the program. Renault estimates that participants can save 50 percent of their energy bills.

Renault, which will offer the technology in France before rolling it out in Germany, Britain and other countries, will share in the profits the Mobility House generates from energy trading.

If such services prove successful, the financial case for electric vehicles, an important tool against climate change, will become stronger.

“It would really boost the adoption of electric vehicles,” said Adam Langton, a BMW executive who focuses on energy issues.

BMW already offers software that lets owners charge their electric cars when renewable energy is most abundant, allowing the company to earn carbon credits and pay customers who participate in the program.

A new generation of electric cars that BMW will launch next year, known as the Neue Klasse, will have a so-called bidirectional capacity. This means that the cars can take electricity from the grid and give it back, and they can also use the energy to power their engines.

Ford pioneered two-way charging with the F-150 Lightning pickup truck, which can keep a home powered during a power outage. General Motors, Hyundai and Volkswagen also offer or plan to offer vehicles with two-way charging. As such vehicles become more common, the storage potential could be enormous.

By the end of the decade, an estimated 30 million electric vehicles could be on American roads, up from about three million today. All those cars could store as much energy as the daily output of dozens of nuclear power plants.

But of course, those millions of cars can also put a strain on the grid, which is already seeing increased demand for electricity from heat pumps and data centers, said Aseem Kapur, chief revenue officer at GM Energy, a unit of General Motors that provides services to electric vehicle owners. By helping to even out demand, “electric vehicles can be a significant resource,” he said.

But before that vision can become reality, there are still a few issues to be resolved.

Owners may be reluctant to run their cars off the grid because they fear that constant charging and discharging will wear out the batteries faster.

Some energy experts said the degradation would be insignificant, especially if utilities used only a small fraction of a battery’s capacity. Renault is addressing that problem by offering participants in its energy storage program the same eight-year, 100,000-mile warranty that those who don’t participate get.

Another challenge is that some U.S. utilities and the state regulators that oversee them favor centralized networks in which energy flows almost exclusively in one direction: from power plants to homes and businesses.

To overcome resistance from utilities, Maryland last month passed a law requiring them to allow two-way charging arrangements and offer financial incentives.

There is increasing recognition that electric vehicle batteries are valuable investments that most owners will only actively use for a few hours per day.

“We want to unlock the full value of electric vehicle batteries,” said Gregor Hintler, Mobility House CEO for North America.

If all the electric cars in New York City were used for storage, said Dr. Preindl, the Columbia professor, “those vehicles would be by far the most valuable energy plant in New York.”

Consolidated Edison, the utility that serves New York City and some suburbs, is exploring how managing charging times and using electric vehicles for storage can help the company cope with the rapid growth of battery-powered cars.

Contrary to popular belief, “the electric grid will not collapse” as a result of electric cars, says Britt Reichborn-Kjennerud, director of e-mobility at Con Ed. “The bigger concern is that if we do not plan differently for this very rapidly increasing load, the electricity grid will not be ready in time to support the transition.”

Con Ed supplies power to a Bronx depot for electric school buses in New York City, where Mobility House software is enabling more vehicles to use the facility.

Fleets of electric vehicles owned by companies or governments are a particularly promising form of backup energy storage. Vans or trucks have large batteries and usually have predictable routes and schedules.

Ford Pro, the commercial vehicle division of Ford Motor, has begun offering free chargers to customers that allow them to be turned off during peak electricity demand. Owners also save on their electric bills.

Ford provides the software to manage the chargers and meet customers’ driving needs, and manages the relationship with utilities. Ford is testing the service in Massachusetts before expanding it to other states. The next step will be a two-way system that will allow the vehicles to send energy to the grid.

“What smart charging can do is save costs,” said Jim Gawron, director of charging strategy for Ford’s electric vehicle business. “That’s a significant barrier for customers.”

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