The Electric Vehicle as a Power Plant: A California Utility Shows How it’s Done

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Electric vehicle charging stations in a parking lot (Credit: DOE)

For years we’ve heard about a future where our cars become sort of like mini-power plants. And now San Diego Gas & Electric is showing how it’s done.

The California utility has begun bidding resources from a group of electric vehicles and energy storage systems into the state’s wholesale power market.

The pilot program, one of the first of its kind, is meant to provide insight into how electric vehicles and other kinds of distributed energy can make the grid more reliable and efficient, said James Avery, SDG&E’s senior vice president of power supply.

“The key to unlocking that potential is to better understand how these resources provide value both at the customer site level and at the larger electric grid level. This project does just that,” he said.

This vehicle-to-grid relationship often is depicted as a key component of a future, more distributed electric grid. Energy planners envision cars being charged at night when there is little demand and power prices are low. Then when demand grows during the day and prices rise, the cars can act as a grid resource.

Balancing Renewables

SDG&E is aggregating electric vehicles and stationary storage systems from  five locations throughout San Diego County. The aggregated resources are being bid into the California Independent System Operator’s energy markets to bolster the grid when short-term energy imbalances occur.  Various factors can cause imbalances on the electric grid, including the sporadic availability of renewable energy (the sun goes behind a cloud or the wind isn’t blowing).

The pilot program allows the electric vehicles and storage to participate in a demand response  program, for which they are paid the marginal energy price  — the same price a power plant would be paid in those hours.

“This pilot creates an important connection between actual grid conditions and customer response,” said Heather Sanders, the director of regulatory affairs for distributed energy resources at the California ISO.

The electric vehicles respond to signals from the ISO to reduce use of electricity when it is scarce, and resume charging when renewable generation is plentiful, she said.

“This capability helps maximize the use of energy from renewables while keeping the grid reliable,” she said.

Set to run through 2015, the project is offering lessons learned, identifying both barriers and best practices. The power industry is increasingly seeking out this kind of knowledge as distributed energy — electric vehicles, storage, solar, demand response, energy efficiency — increasingly gain traction as grid resources.

Shell Oil Products US is working with SDG&E on the pilot project.  “It is important for us to understand if electric mobility can be made commercially viable for Shell within our wider alternative energy portfolio,” said Matthew Tipper, Shell’s vice president of alternative energies.

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Others working on the project include Houlihan Lokey Strategic Consulting, CleanReturns and Olivine.

California is likely to be a leader in modeling the relationship between electric vehicles and the grid. It is by far the leader in electric vehicle use in North America. SDG&E’s territory, alone, includes 13,000 electric vehicles. The fleet is expected to grow as the state strives for 1.5 million zero emissions EVs by 2025, under a plan proposed by Gov. Jerry  Brown.


By Alexandru Nika/

Ten-Year Pilot Proposed

To encourage electric vehicle owners to charge their vehicles during off peak hours, states are likely to revamp electric rates structures. SDG&E now has an application pending before the California Public Utilities Commission to do so. In particular, the Sempra Energy subsidiary has proposed another pilot with hourly time-variant rates (CPUC Docket Number A.14-04-014)

Under the pilot, SDG&E would contract with third parties to build, install, operate and maintain electric vehicle charging facilities at workplaces and apartment buildings. The proposed rates are designed to encourage customers to charge their batteries at times most beneficial to the grid. Customers could view the hourly rates ahead of time on their cell phones and make a decision on whether or not to participate.

The utility would use the pilot results to determine the cost-effectiveness of such electric vehicle programs for ratepayers, drivers and society at large. SDG&E hired the consulting firm E3 to create the cost-benefit model.

The 10-year pilot program, which must be approved by the CPUC, would cost $59 million for infrastructure and $44 million for operations and maintenance. The utility is seeking approval to pay for the program with revenue from carbon dioxide cap and trade allowance sales.

SDG&E also has been leading the way in large-scale energy storage procurement. The utility secured 261 MW of storage late last year, and now has another solicitation underway with bids due March 31 for 4 to 12 MWh utility owned storage systems to be built in lieu traditional circuit upgrades.

The utility also is a leader in microgrid development, and is building one of the US’ largest renewable energy microgrids at Borrego Springs.

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About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.


  1. Very interesting! Thanks for sharing!
    Kyle Ephraim, University at Buffalo (UB)

  2. David Wilson says:

    “The pilot program allows the electric vehicles and storage to participate in a demand response program, for which they are paid the marginal energy price — the same price a power plant would be paid in those hours.”

    Not just the marginal price for electricity fed back into the grid, but storage (all kinds of storage, including thermal) should have access to the marginal price taking power from the grid. That way, market forces will be brought to bear in balancing demand.

  3. Environmentally responsible companies provide their employees the opportunity to charge their electric vehicles while at work. Clearly, this is a significant step for an employer to show their commitment to their employees and to the environment. This shifts the energy costs to the employer….what are the costs and responsibilities as lines for social responsibility and benefits are drawn?

    JLM Energy, Inc. has a free whitepaper on Enterprise EV Charging stations and ways to mitigate negative impacts from increased energy demand.

  4. BHASKAR RAO says:

    I am from India. My son is studying in A&M University Kingsville, MS with Power Systems as specialization. Will you please help my son to get intern-ship in your prestigious organization.

  5. BHASKAR RAO says:

    I would like to undergo intern-ship in your prestigious organization. As an enthusiastic student from A&M University doing my MS in power systems. I am very much interested to work with you. Will you please guide me in this aspect.


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