California Bill Supports EV Bidirectional Charging ... But Incentives and Regulations Needed to Realize Benefits

Electric vehicles (EV) often sit idle, which creates opportunities for them to become mobile microgrids that utilize bidirectional charging to send battery power to the grid, homes and businesses.

In a move that’s said to convey an important market signal about the benefits of bidirectional charging, Governor Gavin Newsom on September 27 signed into law SB 59, which could lead to the California Energy Commission (CEC) requiring classes of EVs sold in California to include bidirectional charging capability.

But in order to take full advantage of all the battery power stored in EVs, new regulations and incentives are needed, industry members said.

California expects to have 7 million EVs on the road by 2030. But only a small percentage of the state’s electric vehicle fleet has bidirectional capability, according to The Climate Center.

That’s beginning to change. Ford offers the bidirectional Ford-F-150 Lightning. Tesla and General Motors have announced some vehicles will have bidirectional capability – and will be able to support home resilience, microgrids and virtual power plants – beginning as early as next year, said Peter Asmus, executive director, Alaska Microgrid Group.

The CEC could call for an early implementation date for bidirectional charging

An earlier but unsuccessful California bill, SB 233, would have required all EVs to be equipped with bidirectional charging beginning in model year 2030. While the bill that Newsom just signed doesn’t include a mandate by a certain date, it’s possible the CEC, working with the California Air Resources Board and the California Public Utilities Commission (CPUC), could set an earlier date, said Kurt Johnson, director, community energy resilience for The Climate Center.

“The bill sets in motion an opportunity for California to lead the world in creating a new global automobile standard, similar to what California started in the 1960s when California started requiring catalytic converters on vehicles in response to horrible smog problems in Los Angeles,”  Johnson said.

Bidirectional EVs can support the grid, provide backup power, lower costs

Bidirectional charging offers many important benefits, he added. First, California utilities struggle to provide power reliability and resilience. Bidirectional EVs can support the grid during emergencies, be used during outages as backup power and cut energy costs.

To lower costs, EV drivers could power their homes with the batteries in their EVs during peak periods when electricity is most expensive, or get paid by utilities to send power to the grid when peak rates are in place. Southern California Edison has proposed a tariff that would pay 58 cents/KWh between 6 pm and 9 pm June 1 through September 30, Johnson said. And ratepayers would save billions if EVs were used to meet peak load. The EVs would replace the need to  build expensive poles and wires to meet peak load during the 30 to 40 hours a year when the grid is stressed, he said.

In addition, bidirectional EVs could reduce the use of fossil fuels, replacing diesel generators deployed by homeowners and businesses during outages, and cut the need for polluting gas peaker plants.

Another advantage to bidirectional EVs: They can harness excess energy generated from solar and other renewables and release it to the grid when needed, said Stacy Noblet, vice president of transportation electrification at ICF, a consulting firm.

 Challenges to deploying bidirectional EVs

But Steve Letendre, senior director of regulatory affairs for Fermata Energy, which provides vehicle-to-everything technology, said that three issues need to be addressed in order for California and other states to make the most of bidirectional charging.

First, EV drivers need to connect bidirectional chargers to the grid.

“Utilities don’t have a box to check for vehicle to grid (V2G),” he said.  “We see utility processes for interconnection slow and delaying the process.”

CPUC Rule 21 might help. It sets up the technology requirements for interconnecting, and accepts bidirectional chargers as an eligible technology, he added.

Second, incentives are needed for bidirectional chargers, Letendre said. California’s Self-Generation Incentive Program (SGIP), which offers “rich” incentives for homeowners to install storage, includes an up-front incentive plus payments over time. But bidirectional EVs don’t qualify for SGIP.

“EVs provide energy storage to the grid, but aren’t getting the same type of support as standard stationary batteries,” Letendre said. Fermata Energy is advocating for a program that provides incentives similar to SGIP’s for bidirectional EVs, which are mobile and potentially provide more benefits than stationary storage. “We want the incentive to be based on performance–what EVs can provide to the grid,” he said. The proposal would incentivize investments in bidirectional EV charging infrastructure. Fermata has not yet released a formal proposal.

How to compensate EV drivers for providing services

One option would be for utilities to provide compensation based on the value EVs yield for the grid. For example, California’s Emergency Load Reduction Program, a demand response program implemented during emergencies, compensates bidirectional chargers.

Utilities and V2G companies are beginning to put bidirectional chargers to the test. For example, Pacific Gas & Electric (PG&E), has a vehicle-to-everything pilot program. It offers EV drivers incentives for powering their property using their EVs during outages, charging their vehicles when power is less expensive, then using their battery power during peak hours – from 4 pm to 9 pm – and getting incentives for sending electricity to the grid when it’s needed.

Testing an EV’s ability to supply grid services

In addition, working with Exelon at the Delmarva Power New Castle Regional Office, Nuvve Holding, which provides V2G technology, deployed its Nuvve PowerPort3 Ultra chargers, which allowed parked Ford Mach-E EVs to deliver grid services.

In July, Nuvve broke ground on a project in Fresno designed to improve air quality, reduce operational costs and supply electricity to the grid during peak hours.

With a $16 million award from the Fresno Economic Opportunities Commission (EOC) to power EOC’s operations and electrify the commission’s fleet, Nuvve will install a solar farm, solar canopies and 56 charging stations. Fresno EOC will  use the V2G technology as it transitions its gas vehicles into a 50-shuttle electric fleet. The project includes four on-site batteries that will help Fresno EOC power its kitchen and transit, cut emissions, reduce energy costs and enhance grid services.

The Nuvve platform manages local resources across multiple sites. The company participates in the California Emergency Load Reduction Program and frequency regulation in Denmark by aggregating EV fleets as a virtual power plant, said Nuvve co-founder and CEO Gregory Poilasne.

SB 59 sends a market signal

California’s SB 59 is a step toward realizing many of the benefits of bidirectional EVs, potentially increasing the number of  projects that benefit homeowners, businesses and the grid.

“(The legislation) sends an important market signal and, we hope, will accelerate California's move toward clean, distributed energy,” said Ryan Schleeter, communications director for The Climate Center.