Vehicle-to-Grid:
Perspective from a Battery
Manufacturer
Andy Chu, Ph.D.
VP, Marketing &
Communications
A123 Systems
©2010
©2010 A123
A123 Systems,
Systems, Inc.
Inc. All
All rights
rights reserved.
reserved. CSG-ERC
CSG-ERC 17
17 August
August 2010.
2010.
A123 Systems, Inc.
A123 Systems is a leading U.S. developer and manufacturer of advanced
high power, safe and long-life lithium-ion energy storage solutions for nextgeneration applications in the transportation, electric grid and commercial
markets
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•
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Corporate headquarters: Watertown, Massachusetts
1700+ employees worldwide
Mass producing millions of batteries per year
>1,000,000 square feet of manufacturing facilities
in China, Korea and United States
Investing ~$1B in capacity (2009 to 2012)
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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A123’s Core Markets
Enabling New Products through Advanced Energy Storage
Transportation
Electric Grid
Passenger Hybrids,
Commercial
Hybrids, PHEVs and
PHEVs and EVs
EVs
Smart Grid
Network
Stabilization Systems Energy Storage
Commercial
Portable and
Mobility
Stationary
 Fuel economy
 Increase grid reliability
 Improve performance
 Reduced emissions
 Energy independence
 Enable Wind and Solar
 Reduce emissions
 Increase plant efficiency/utilization
 Reduce toxic battery chemicals
 Lighter-weight components
 Fuel efficiency
Drivers
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Energy Storage and the Electric Grid
Ancillary Services:
Regulation
Two primary markets:
Ancillary Services, Bulk Energy
Supply (1)
Value
$/MWh
Demand (1)
Ancillary Services
Area Control
Frequency Regulation
Spinning Reserve
Bulk Energy
Renewable Energy Management
Transmission & Distribution
Peak Shaving
Seconds
Minutes
Hours
Days
Ancillary services are a higher value
service than bulk energy storage
7:00 AM
8:00 AM
9:00 AM
10:00 AM
SGSS provides power (discharges)
SGSS is charged by power plant/grid
(1) Illustrative
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Lithium Ion Batteries on the Grid
• Lithium ion batteries are being used on the grid today
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Ancillary Services:
AES Chile Installation (16MW, rated at 12MW)
A123 is the #1 maker ©2010
of lithium
ion batteries for grid ancillary services
A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Bulk Energy Management:
Southern California Edison Tehachapi Project (32MWh)
This will be the largest©2010
lithium
ion battery in the world when complete.
A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Stationary vs. Vehicle Batteries (V2G)
• If a vehicle battery is free to the V2G provider, the
economics obviously work
• If the battery must be paid by the V2G provider and doesn’t
offer any other service/value, then it would be cheaper to
deploy a purpose-built grid battery
+ Vehicle batteries have requirements that stationary batteries do not
have and thus cost more to do the same function
+ A123 is already doing this, using a grid battery (V2G without the “V”)
• The reality is somewhere in between
+ A vehicle battery offering V2G is more expensive, but
+ It also generates revenue
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Value of V2G
• No question there is value in V2G
• Real questions:
+ How much value? Who benefits?
+ Cost to implement? Who pays for necessary hardware,
infrastructure?
+ Impact to primary mission of vehicle battery? Life, warranty?
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
Different Perspectives
• Automaker
+ Vehicle cost is the biggest barrier to adoption
+ EV range and “range anxiety” is the second biggest barrier
+ Anything that adds cost or decreases EV range will not be embraced
unless there is a compelling reason or value to their customer
• Utility or V2G provider
+ Free or low-cost asset that can help address their issues
+ Technical issues that need to be worked out
• Battery manufacturers role is to meet customer need
+ V2G has not been a primary focus for battery manufacturers to-date
because our customers aren’t clamoring for it
+ Cost, energy density, and life are the primary areas that our
customers
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Challenge for V2G: Business Model
• Automaker
+ OEMs sell hardware (vehicles) with a primary mission to transport
people or goods
+ Financial: OEMs are not in the business of selling power/energy;
need to determine how the market would allow them to benefit
+ Technical: OEMs do not have enough data to understand the impact
on battery life/performance due to this usage
• V2G provider
+ V2G provider has little or no influence over what hardware is
provided on-board vehicle
+ Any non-approved usage will likely void OEM warranty, thus
deterring average consumers from offering service
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Impact to Battery Life
• Researchers at Carnegie
Mellon University showed that
A123’s lithium ion batteries
showed relatively low capacity
loss on simulated V2G cycling
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Possible Solutions
• Decouple responsibility/ownership of battery from vehicle
+ Whoever owns the battery can decide what to do with it
+ Use battery to offer other services, with full knowledge of the impact
on life/performance for primary mission
+ Some are already pursuing this business model: e.g. Better Place
+ Battery leasing is another possibility
• Customer and OEM agree on usage and impact to warranty
+ OEM is opposed to non-transportation usage because of impact on
battery performance/life
+ If this concern is removed, then OEM would be more supportive
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Fleet Operators are Likely Early Adopters
• Fleet operators are more likely to embrace V2G because:
+ They look at total cost of ownership (TCO) and are more likely to
view vehicles as a potential source of revenue
+ They understand that greater utilization of an asset helps shorten the
payback period
+ Fleet vehicles usually have well-defined operating profiles
+ They generally have a few locations where vehicles are parked,
making it easy to make infrastructure investments
+ OEMs more likely to incorporate customer desire for V2G hardware
• Possible fleet vehicles:
+ School buses
+ Delivery vehicles
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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Conclusions
• V2G has value, but the question is how much is it worth and
how are the costs/benefits shared?
• Challenge is the business model
• Impact to battery performance/life are manageable
• Fleet operators are likely early adopters
©2010 A123 Systems, Inc. All rights reserved. CSG-ERC 17 August 2010.
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