National Bidirectional Roadmap Background paper

Acknowledgements

We would like to acknowledge and thank all parties who made time to participate in the consultation process: Nissan, Polestar, Renault, Tesla Motors, Hyundai, Mitsubishi, Ford, The Australian Energy Regulator, Energy Consumers Australia, ,Monash University, Electric Vehicle Council, Australian EV Association, Electric Future, Jetcharge, Net Zero Engineering Solutions, JLL, EVSE Australia, Ambibox, Sigenergy, Fermata Energy, StarCharge, Next-Dimension, IEA Task 53, Australian National University, California Energy Commission, University of Technology Sydney, ACT Government, Amber Electric, German Ministry for Economic Affairs and Climate Action, Evergen, Kaluza, SwitchDin, AGL, Combined Energy Technologies, Reposit, The Mobility House, ActewAGL, Australian Energy Market Operator, CharIN, CSIRO, Dekra, NewVolt, Weavegrid, Delta, Team Global Express, US Department of Energy, Synergy, QLD Government, Smart Energy Council, Clean Energy Council, Ausgrid, CitiPower, Powercor & United Energy, Endeavour Energy, Energy Queensland, Essential Energy, Evoenergy, South Australia Power Networks and Western Power

Special thanks go to project delivery partners Endgame Economics, ThinkPlace, Watture and Vehicle-Grid Integration Council.

Disclaimer

This paper was commissioned by the Australian Renewable Energy Agency (ARENA) and RACE for 2030 (RACE). The report presents the findings of enX research and consultations in support of the National Roadmap for Bidirectional EV Charging

The paper is provided as is, without any guarantee, representation, condition or warranty of any kind, either express, implied or statutory. ARENA, RACE and enX do not assume any liability with respect to any reliance placed on this report by third parties. If a third party relies on the report in any way, that party assumes the entire risk as to the accuracy, currency or completeness of the information contained in the report. To the best of ARENA, RACE and enX’s knowledge, no conflict of interest arose while preparing this report.

This work is copyright, the copyright being owned by the enX Except for the Commonwealth Coat of Arms, the logo of ARENA and RACE and other third-party material protected by intellectual property law, this copyright work is licensed under the Creative Commons Attribution 3.0 Australia Licence. Wherever a third party holds copyright in material presented in this work, the copyright remains with that party. Their permission may be required to use the material.

Except for the Commonwealth Coat of Arms, enX has made all reasonable efforts to: clearly label material where the copyright is owned by a third party; and ensure that the copyright owner has consented to this material being presented in this work. Under this licence you are free to copy, communicate and adapt the work, so long as you attribute the work to enX and abide by the other licence terms. A copy of the licence is available at https://creativecommons.org/licenses/by/3.0/au/. Requests and enquiries concerning rights should be addressed to arena@arena.gov.au

© enX 2024

Executive summary

What is bidirectional EV charging?

Bidirectional charging (‘bidi’) allows for the two-way flow of electricity between an EV and an external electricity system. This means that EV electricity loads can be shifted in time (unidirectional smart charging), and EVs can also act as a generator that produces power for a home or building and/or, to support the grid.

Types of bidi include:

• Vehicle to grid (V2G) - EVs supply power to a mains electrical circuit that is electrically connected to the grid

• Vehicle to homes and buildings (V2H/B) – EVs supply power to local electrical distribution system that is electrically separated from the grid

• Vehicle to load (V2L) – EVs supply power directly to one or more electrical appliances that are electrically separated from the grid.

Purpose and scope of this paper

This Background Paper provides further detail in support of the separate National Roadmap for Bidirectional EV Charging. It consolidates the outcomes of a desktop review of current bidirectional charging studies and trials in key markets and extensive supply chain and stakeholder engagement.

This project seeks to define the critical paths, enablers, and barriers to achieve the following Market Objective:

Bidirectional charging is readily available to provide high value services across the Australian economy by 2030, with several products available by 2027.

The interviews and workshops held as part of this project have validated this objective as achievable for residential bidi applications. However, this outcome is not a given and it is contingent on various conditions which are set out in the National Roadmap for Bidirectional EV Charging. While other bidi use-cases (i.e. outside residential applications) may have additional barriers and complexities, stakeholders considered they will closely follow and be somewhat contingent on the residential uptake as that will contribute to community familiarity, a competitive supply of vehicles and EV supply equipment (EVSE) and required grid connection and market participation incentives frameworks.

Market context

Many (possibly all) EV automakers are currently in the process of developing bidirectional charging products. Over the past 24 months, stakeholders have reported a shift in focus from technology demonstrations to preparing early-stage mass-market products, especially V2G for residential customers (with a greater focus on V2H in the US)

Without explicit policy support, bidi availability in Australia can be expected to lag major international markets such as the US and Europe. This is primarily due to Australia being a

relatively small market and that international automakers will prioritise home markets for bidi productisation and product homologation. There was a consistent view among stakeholders that Australia’s leadership on solar and battery uptake could be replicated with bidi, subject to Australia presenting a compelling market offering, and that a competitive supply of bidirectional EV charging products and services could be bought forward.

Overall, the timely supply of both bidirectional EV and EVSE products to Australia is thought to be most influenced by four factors:

1. Government policy and incentives

2. Australia’s addressable market size including our customer value proposition

3. The transparency, accessibility, stability and efficiency of standards and regulatory approval frameworks

4. The availability of capable vehicles and EVSE, which will be influenced by the three factors above.

Opportunities by transport sector

The residential sector was universally considered the most scalable opportunity for bidi. This would leverage prior CER and electricity network investments and Australia’s world-beating customer interest in rooftop solar. The overwhelming view of stakeholders was that broadbased incentives can accelerate market commitments by vehicle OEMs and that further studies and demonstration projects were not required to accelerate uptake in this sector Over the past two decades, Australians have installed over 3.8 million rooftop solar systems and there is no apparent reason, based on expected EV uptake rates, why similar V2G uptake levels could not be achieved over the coming decades.

Commercial fleets were generally not seen as an immediate priority due to the need to focus on, and overcome, present barriers to unidirectional charging uptake. However, there are signs of early interest in V2G integration by some fleet owners which may accelerate once vehicles in relevant classes become more available.

Europe has seen car-sharing as an early, successful use-case for bidi and there was a view that the market opportunity for car-sharing and bidi could be mutually reinforcing, with bidi offering a revenue stream that could readily fit into a car-sharing business model.

Several stakeholders commented that it was important to ensure public charging equipment can support bidi. However, it is currently difficult to make an investment case without a better understanding of how this would align with a positive consumer public charging experience. The size of this opportunity is also thought to be relatively minor.

Heavy vehicles are an important area for future growth. Rigid trucks and buses were considered most favourably due to often shorter runs and duty cycles which typically allow for longer overnight recharging periods. Vehicle availability was seen a critical constraint ahead of 2030 during which time targeted demonstrations could be explored to firm up the commercial case for fleet operators. Articulated trucks with high utilisation and longer haulages were not seen as an opportunity in the near term outside of niche applications (e.g., primary frequency control service delivery). Several stakeholders noted the benefits of further studies to identify specific opportunities for bidi across commercial fleets and heavy vehicles.

Table 1 – A summary of the relative size of the opportunity in 2030 and the relative importance of specific conditions that contribute to the Market Objective

The relative importance of conditions that can contribute to the Market Objective

The availability of V2G-enabled vehicles (as opposed to V2L/V2H) as a foundational condition

Clear national policy direction to support international supply chain engagement and investment

Permissive vehicle warranty conditions that are aligned with highest-value customer use-cases

Financial incentives to support early adopters overcome initial high upfront cost and complexity

Trials and case studies that demonstrate commercial benefits and act to derisk investment decisions

The availability of supportive (cost reflective) retail tariffs and dynamic (network support) incentives

Reduction in the FCAS minimum bid size

Coordinated public messaging to address customer concerns and build awareness, understanding and trust

Minimum standards for 'behind the meter' interoperability to support local device orchestration

Permissive and nationally consistent network connection requirements and grid codes to support EV and EVSE homologation

Transparency about future smart grid architecture direction to support increased EV and EVSE supplies

Industry convergence on ISO 18118-20 to support plug & play interoperability between vehicles and chargers

Engagement to ensure Australia’s requirements are a represented in international standards processes

Support for local product homologation for EVSE and automaker OEMs

Chapter summaries

1. Background – This chapter provides context for the project and defines different types of bidi and AC/DC technology configurations. A key message is that the term ‘V2G’ covers any bidi application that is grid-connected, including where the system is export-limited and used only for self-consumption. While V2G has the greatest value, it has greater hurdles to clear related to local grid code compliance. V2H/B relates only to off-grid or backup supply applications but has a faster potential path to market

2. Technology and commercial readiness – This chapter looks at the commercial readiness of different aspect of the bidi technology stack including standards and protocols and provides a state of the market summary. It identifies vehicle availability as the critical barrier to market development and ISO 15118-20 as an enabler (and barrier) to plug and play interoperability between cars and chargers. It describes the different challenges associated with AC & DC bidi applications and the potential to support OEMS homologating products in our market. All the major challenges are software (rather than hardware) related.

3. Exploring bidirectional charging value streams – This chapter explores the potential value streams associated with back-up power and V2G applications such as energy arbitrage, network support and frequency control. It identifies more cost reflective network tariffs as a key enabler of efficient value transfer to consumers. Intraday energy arbitrage and network support are considered the most valuable and scalable services and frequency control may have a role in some heavy vehicle applications.

4. Consumer appetite and readiness – This chapter explores the learning from local smart charging trials and stakeholder perspectives and international V2G demonstrations which demonstrate the potential for consumers to engage in new energy management services. A range of potential consumer motivations are identified with financial returns being the most effective driver of purchasing decisions and long-term consumer behaviour change. We explore the role of early technology adopters and trusted information sources in supporting positive outcomes for consumers. Minimum interoperability and access standards are identified as foundational to efficient value transfer, consumer choice and competitive market operation.

5. The economic value case for bidirectional charging – This chapter summarises local and international electricity market modelling and potential consumer savings estimates. While it is difficult to cross-compare estimates, there is a generally consistent finding that bidi offers consumer and long-term economic value. Further analysis is provided in the separate V2G Energy Market Modelling Report

6. Potential roadmap directions – With national policy leadership and support from state and territory governments, there was a consistent view among stakeholders that Australia could bring forward bidi product availability delivering material benefits for Australian consumers and accelerating and supporting our transition to renewables. This leadership should take the form of:

• A strong national policy narrative that signals a clear alignment of bidirectional charging proliferation with Australia’s national interests

• Implementation of concrete actions to advance this interest.

The chapter sets out a range of potential policy and strategy action considered by participants at the National Roadmap for Bidirectional EV Changing Codesign Workshop. These are arranged as per the five coloured boxes the figure below.

ES Figure 1 – Conceptual framework for categorising potential roadmap directions

Glossary of terms

AC Alternating Current

AS/NZ 4777.1:2024

AS/NZ 4777.2:2020

Australia’s installation standard for grid-connected inverters

Australia’s product standard for grid-connected inverters

BESS Battery energy storage system

Bidi Bidirectional EV charging

BPT Bidirectional power transfer

AEMO Australian Energy Market Operator

ARENA The Australian Renewable Energy Agency

BMS Battery Management System

CCS Combined Charging System (for AC and DC charging)

CER, DER Consumer Energy Resource, Distributed Energy Resource

CHAdeMO A standard for EV-EVSE connection and interoperability origination from Japan

CharIN A global association promoting standards for EV charging systems

CPO Charge Point Operator (responsible for charge session management)

CSIP-AUS Common Smart Inverter Profile – Australia, used to communicate dynamic operating envelopes and related information between Australian electricity distribution networks and customer devices. Based on IEEE 2030.5

CSMS Charging Station Management System

DC Direct Current

DOE Dynamic operating envelopes

DSO/DNSP Distribution System Operator / Distribution Network Service Provider (same thing)

EMS, HEMS Energy Management System, Home Energy Management Systems

EV, BEV, PHEV Electric vehicle, Battery Electric Vehicle, Plug-in Hybrid Electric Vehicle

EVSE Electric Vehicle Supply Equipment

IEEE 2030.5 A protocol that standardises communications between utilities and customer devices. In Australia, this has been adapted as CSIP-AUS

FCAS Frequency Control Ancillary Services

ICE Internal combustion engine

ISO International Standards Organisation

ISO 15118

An international set of standards defining EV-EVSE communications

MCS Megawatt Charging Standard (a CCS derivative)

NEM National Electricity Market (consisting of 5 jurisdictional markets: QLD, NSW, VIC, TAS, SA)

NER National Electricity Rules

OBC On-board charger. In the context of this report, it can infer a bidirectional combined inverter-charger, though is still referred throughout as an ‘OBC’.

OCPP Open Charge Point Protocol

PKI Public Key Infrastructure

SoC EV battery state of charge (% of rated capacity)

ToU Time-of-use (tariffs)

V2G Vehicle-to-Grid (a form of bidirectional EV charging)

V2H/B

V2L

V2X

Vehicle-to-Home or Vehicle-to-Building (a form of bidirectional EV charging)

Vehicle-to-Load (a form of bidirectional EV charging)

Vehicle-to-Everything (covering all forms of bidirectional EV charging)

VGI Vehicle-grid integration

VGIC Vehicle Grid Integration Council (US)

1. Background

1.1. Purpose of this paper

On 19 July 2024, the Energy and Climate Change Ministerial Council agreed the Australian Renewable Energy Agency (ARENA) would lead the development of a national strategy for bidirectional electric vehicle (EV) charging.1 This reflects a recognition by all Australian governments that bidirectional EV charging can be an important enabler in our transition to a lower cost and low emissions power system.

ARENA has partnered with the RACE for 2030 Cooperative Research Centre (RACE) who have jointly commissioned enX Consulting to facilitate the development of a roadmap of activities to form the basis for a national strategy (National Roadmap for Bidirectional EV Charging).

This background paper is an output from the process. It focuses on defining and validating the most prospective applications of bidirectional EV charging within the Australian context and identifying potential directions for national strategy development based on:

1. A desktop review of the current directions for bidirectional charging in key markets

2. Supply chain and stakeholder engagement (through interviews and an in-person codesign workshop) to identify critical paths, enablers and barriers

3. Long-run energy market modelling to determine the potential value of bidirectional charging in Australia’s energy transition

4. A national industry codesign workshop held in Canberra in 12-13 November 2024.

1.2. The Market Objective

The following Market Objective has been defined for this project and is the focus for much of the analysis in this paper:

Market Objective: Bidirectional charging is readily available to provide high value services across the Australian economy by 2030, with several products available by 2027.

The objective of the roadmap process is to identify the actions that government and industry can implement to achieve the Market Objective

1.3. Smart and bidirectional charging

Australia is in the early stages of a broad-scale transition to electric mobility (e-mobility) across all road transport sectors. This transition is driven both by comparative technology advantages and the urgent need to reduce greenhouse gas emissions . Our e-mobility transition presents a long-term structural change for Australia’s energy systems.

1 DCCEEW (2024) Energy Ministers agree to the National Consumer Energy Resources (CER) Roadmap | energy.gov.au

An important dimension to this transition is an increasing coupling of the transport sector with our systems of electricity supply. The Australian Energy Market Operator (AEMO) forecasts annual electricity consumption to double from 2024 to 2050, with most of this associated with vehicle electrification.2 AEMO also notes that future electricity customers may be more flexible in the timing of their electricity demand, shifting electricity usage, such as EV charging to take advantage of lower costs and when electricity supply is in surplus.

Bidirectional EV charging

Smart charging is an evolving suite of technologies and strategies which, in established use, can shift EV charging or discharging to opportune times such as periods of low power prices, low grid demand and/or renewable energy abundance. Smart charging requires digital technologies to manage charging sessions and digital coupling with vehicle communications, ‘off-board’ energy management systems and systems used by electricity grid operators to ensure the reliability, security and efficient operation of our power systems. This is underpinned by digital communications infrastructure and interoperability standards and protocols that facilitate the transfer of information, and computational resources within and outside vehicles.

Bidirectional charging allows not only for EV electricity loads to be shifted in time, but also for EVs to act as a generator that produces power for a home or building and/or, to support the grid. Over the coming decades, bidirectional charging is widely expected by stakeholders to become an increasingly available high-value service that can generate benefits for the EV owner as well as the power system and the economy more broadly. It takes advantage of the fact that the capacity of EV batteries will be surplus to most drivers’ needs, most of the time.

Bidirectional EV charging has been developing as a concept since the late 1990’s with around 150 trials conducted internationally to demonstrate its technical and commercial potential.3

Types of bidirectional charging include:

• Vehicle to grid (V2G) - EVs supply power to a mains electrical circuit that is electrically connected to the grid. In this configuration, the bidirectional charging system synchronises with the power system’s AC frequency V2G allows for power to be exported to the grid for a variety of purposes (including energy and services market participation) but can also include export-limited applications such as solar selfconsumption or peak demand mitigation.4

• Vehicle to homes and buildings (V2H/B) – EVs supply power to local electrical distribution that is electrically separated from the grid. In this configuration, the vehicle and off-board charging equipment are grid-forming (i.e. creates its own 50hz AC frequency).

• Vehicle to load (V2L) – EVs supply power directly to one or more electrical appliances that are electrically separated from the grid In this configuration, the vehicle and offboard charging equipment do not need to synchronise with the frequency of the grid

2 AEMO (2024) Integrated System Plan (p.26)

3 See for example V2G hub for a summary of key projects

4 Export-limited V2G is sometimes referred to as V2H, but this definition is not generally accepted by industry.

While these definitions make it easy to discriminate bidirectional charging systems as electrical configurations, innovations in end-use applications can blur these boundaries. For example: V2H capability can also be used to provide peak demand reduction services by switching load temporarily to an offline power supply. V2G can be export-limited e.g., configured such that electricity stored in an EV is only intended for consumption by a customer’s premises.

Bidirectional charging implementations are separated into alternating current (AC) and direct current (DC) configurations:

• AC – DC energy in the battery is converted to AC within the vehicle by an on-board charger (i.e., bidirectional OBC having inverter capability). The EV discharges AC power.

• DC – The EV discharges DC power which is converted outside of the vehicle by an offboard inverter (like a battery inverter).

A high-level taxonomy of bidirectional EV charging configurations is provided in Figure 1 Potential bidi use cases are explored further in the next chapter.

Figure 1 – High-level taxonomy of bidirectional EV charging applications

Grid isolated

Grid synchronised

Off-board power conversion DC V2H/B DC V2G

On-board power conversion

AC V2H/B & V2L AC V2G

This paper focusses on V2H/B & V2G applications rather than V2L which is considered commercially mature and not requiring specific government or stakeholder actions. However, V2L is explored in several cases where the boundary between V2L and V2H/B becomes blurred, such as when V2L is temporarily reticulated through an isolated building circuit.

Grid

code compliance

V2G is subject to the same grid code requirements that apply to all inverter-based generating systems. In Australia, these requirements are set out in the recently updated AS/NZ 4777.1:2024 (installation requirements) and AS/NZ 4777.2:2020 (inverter equipment requirements).

One advantage of DC bidirectional charging is that grid code compliance can be achieved via an off-board power converter as opposed to within the vehicle’s OBC. This means vehicles may cost less to design and build and they can be bidirectional in a range of different markets largely irrespective of local grid code requirements. From a grid code compliance perspective, DC bidirectional charging is considered to have a potentially faster path to market, especially in secondary markets such as Australia that do not have a native automotive industry.

Proposed changes to EU grid connection codes may alter this dynamic by requiring fuller grid code compliance for unidirectional charging 5 This increases the production costs of AC unidirectional power conversion equipment, whether on-board or off-board, and therefore

5 These changes to the EU Demand Connection Code have been reported by supply chain stakeholders, rather than assessed directly by enX.

reduces the incremental grid code compliance costs for V2G It is also possible that vehicle OEMs may take the opportunity presented by unidirectional OBC redesign to introduce AC V2G capabilities. Conversely, this may provide an incentive for some automakers to remove OBCs in some applications and rely instead on offboard DC chargers for uni & bidirectional grid code compliance.

Overall, stakeholders consider that the recent updates to AS/NZ 4777.2:2020 provide a clear (but untested) pathway for grid code certification for both AC and DC bidirectional charging solutions. While for AC, both the charger and the vehicle will need to be certified as a pair, for DC, only the charger will need to be certified. This is illustrated in Figure 2

Figure 2 – Diagram illustrating AC vs DC bidi configurations and the applicability of relevant standards

Summary of relevant standards

Table 1 (below) provides a summary of relevant technical standards and their current status. Implications for these standards and their impact on the Market Objective are explored further in chapter 2.3 Critical path assessment for standards readiness

Table 1 – Summary of relevant technical standards appliable to bidirectional charging

CCS The Combined Charging System (CCS) is the standards framework for charging connectors and EV<>EVSE communications. CCS and its derivative Megawatt Charging System (MCS) is the apparent market direction in Australia. CHAdeMO is a functioning alternative but represents a shrinking market share.

ISO 15118 ISO 15118 is the communication standards for EV-EVSE interoperability. ISO 15118-20 is required for interoperable CCS-based V2G. Whilst production-ready for DC bidi, significant revisions are underway to standardise AC bidi. Early bidi products may be based on custom extensions to the older ISO 15118-2 standard.

OCPP The Open Charge Point Protocol (OCPP) is the communication standard for remote operation of EVSE. Version 2.1 is required for standardised V2G interoperability. Version 2.1 will be backwards-compatible with 2.0.1 (collectively ‘2x’), but not with 1.6 which is used widely today. OCCP 2x is still at an early stage of adoption.

CSIP-AUS Australia is adopting CSIP-AUS, based on IEEE 2030.5, as the national profile for communicating dynamic operating envelopes from distribution network businesses to customer premises. These will typically be received by a proxy or site gateway device with local communication to the EVSE via OCPP or Modbus. IEEE 2030.5 is not widely used outside of Australia and supply chain participants are generally unaware or unclear on how this will impact product development.

AS/NZ 4777.2

AS/NZ 4777.2 is Australia’s product standard for grid connected inverter-based generating systems. Recent updates to AS/NZ 4777.2:2020 provide a clear (yet untested) pathway to EV and EVSE grid code certification. Several DC EVSE OEMs are currently progressing down this path. No network connection delays are expected for equipment listed on the Clean Energy Council’s approved product list.

AS/NZ 4777.1:2024 supply type definitions

Australia’s new national installation standard for inverter energy systems (AS/NZ 4777.1:2024) has introduced ‘supply type definitions’ which apply to bidirectional charging:

1. Normal supply – the default power supply source at a premises, such as from the main grid or the primary generator in an off-grid context (i.e. no bidirectional charging)

2. Supplementary supply – bidirectional charging is coupling with and operating alongside supply from the grid (i.e. V2G) and cannot operate independently

3. Alternative supply – Bidirectional charging offers a backup power source, such as during grid outages (i.e. V2G with back-up power capability or V2H/B)

4. Independent supply – Bidirectional charging provides a ‘stand-alone’ power supply (not grid coupled), but charging can occur from the grid

5. Substitute supply – A relatively niche application where bidirectional charging provides an AC power via the inlet of a secondary inverter-based back-up generator (i.e. V2H/B)

1.4. Transport sector context definitions

Bidirectional EV charging is relevant in different transport sector contexts. The following transport context definitions are used in this report:

• Residential – Vehicles used for private purposes, typically charged at a standalone residential dwelling, extending to more multi-occupancy dwellings in the future

• Commercial – Vehicles used for business purposes, typically charged at a commercial building or depot and sometimes at an employee premises

• Rental fleets – Vehicles are owned by a rental car or car-sharing company, typically charged at a public or destination charging location

• Public charging – Any vehicle while using a public charging station

• Heavy vehicles – Principally trucks and buses typically charged at a depot or a specialised public charging station

1.5. Protecting the power system while electrifying transport

A previous report on EV Technical Standards for Grid Operation for AEMO identified a range of grid-management risks associated with high penetrations of EVs. The highest rated risks included:

• Diversity destruction - Price responsive EV chargers switch on/off or change charge direction simultaneously in aggregate, and the power system experiences an extreme Rate of Change of Frequency (RoCoF) and/or frequency excursion

• Cyber Security – CPO, OEM or Aggregator IT infrastructure is compromised, and the power system experiences a very large load step, leading to insecure power system operation and potential widespread power loss

• Software management – A flawed EV charger software patch is deployed, resulting in an error that causes very large load step down and the activation of protection systems

• Communications loss – The loss of communications for EVSE in a region means smart charging reverts to offline control mode(s) resulting in a large load step up. 6

In this report, enX recommended a range of measures which encapsulate the broader power system risks associated with bidirectional EV charging and the report’s recommendations provide a potential template for future action. This paper therefore focusses on items that are additional to the scope of that report

1.6. State of the market summary

Many (potentially all) EV automakers are currently in the process of developing and trialling bidirectional charging products. Over the past 24 months, stakeholders have reported a shift in focus from technology demonstrations to preparing early-stage mass-market products. Overall, the fundamental technical capabilities and potential use cases for bidirectional charging are considered by supply chain participants to be well demonstrated and/or understood.

6 enX (2023) EV Technical Standards for Grid Operation

The central challenges for automakers are:

• Productisation – developing bidirectional EV charging capabilities into marketable services for consumers, including building trusted supply chain partnerships and establishing battery usage and warranty conditions, and

• Homologation – getting core technologies ready for, and tested against, regulatory requirements in key end markets.

Much of this work is happening by industry, without direct visibility by government and consumers. This fuels an impression of bidirectional EV charging as being in a perpetual nascent state – something that has bene on the cards for years but is yet to be committed to in a substantive way. This perception has been accompanied by wide-ranging speculation about if, and when these products will become available and in what form they will take.

Based on semi-structured interviews with over 50 local and international stakeholders and supply chain participants, including seven automakers, upstream supply chain participants overwhelmingly consider the Market Objective is achievable and desirable. On balance, it was seen as neither over nor under ambitious but contingent on national-level policy support

Outside of supply chains, some stakeholder scepticism has been fed by a legacy of unrealised hype and several false starts. For context, the concept of bidirectional EV charging (as V2G) first originated in the 1990’s7 followed by the first experiments 2001.8 The Nissan ‘LEAF-to-Home’ power supply system was released in 2012 and all Nissan LEAFs since the model year 2013 have been delivered with bidirectional charging capability. However, until 2023, Nissan and Mitsubishi had the only passenger vehicle marketed with bidirectional charging capability outside of trials or closed commercial partnerships.9 This is starting to change.

Nissan and Mitsubishi bidirectional charging capability have used the CHAdeMO charging standard which is being phased out in markets such as the US, EU and Australia. The CHAdeMO standard brought V2G initially to Japan in 2012 as a government-directed imperative following the Tohoku Earthquake (2011), which led to a proliferation of compliant EV and EVSE products which, 12 years later, allow CHAdeMO to be considered mature with respect to being a standard supporting V2G.

The Combined Charging System (CCS) was launched in 2012 by a consortium of EU and US automakers and adopted ISO 15118 for high-level communications after finalisation of the firstgeneration ISO 15118-2 standard in 2014.10

ISO 15118-2 does not explicitly support V2G (ISO 15118-20 does) however depending how the standard is implemented and leveraged some V2G capability has been demonstrated successfully. Compared to CHAdeMO, market pressures did not historically require CCS to support V2G. CCS is now however considerably more feature-rich and flexible than CHAdeMO and accordingly represents the bulk of market adoption in whole or part via regulation or

7 The origins of V2G is generally attributed to Kempton & Letendre (1997) Electric vehicles as a new power source for electric utilities

8 IEEE (2023) False Starts: The Story of Vehicle-to-Grid Power

9 Appendix A provides a summary of major bidirectional charging trials to date.

10 It originally adopted the precedent DIN 70121 standard, which supports unidirectional charging only.

market-led directions. Accordingly, V2G uptake is entering a ‘second wave’ under CCS standards, as the standard is finalised, supported and grown.

Similarly, industry is still in the early stages of transitioning to the 2022 version of the Open Charge Point Protocol (OCPP) 2.0.1 which standardises communication between the EVSE and Charging System Management Software (CSMS). OCPP operates independently of CCS, CHAdeMO or other charging systems. It is the de-facto global standard for EVSE management.11 The transition to 2.0.1 is hampered by reliance of older versions (1.6), legacy systems and infrastructure.

A further version (OCPP 2.1) has been developed in part to standardise bidirectional charging communication and was released in draft form for public review in August 2024 It is expected to be published around the end of 2024.

CharIN, a global association promoting the CCS framework, published a bidirectional charging roadmap in 2019 which identified 2025 as the global ‘go live’ year for V2H & V2G.12 It is logical that in 2024, that we should see a quickening of standards publications and industry preparations for the release of mass-market bidirectional charging products. In 2025 and 2026 we expect mainstream bidirectional charging offering start to enter the mix of product features available to consumers in the US and EU. This will feed into broader competitive auto industry market dynamics which may drive a further proliferation of market offerings in subsequent years.

11 On October 20th, the IEC published the approval of OCPP 2.0.1 as an IEC International Standard (IEC 63584). See OCA (2024) OCPP Achieves International Standard Status

12 Electric (2019) CharIN: Bidirectional CCS charging by 2025

2. Technology and commercial readiness

2.1. Critical path assessment for EV and EVSE supply

This chapter explores the technology and commercial maturity of different elements of bidirectional charging solutions and identifies the risks they present to achieving the Market Objective. It identifies vehicle availability as the critical barrier to market development and ISO 15118-20 as an enabler (and barrier) to plug & play interoperability between vehicles and chargers. It describes the different challenges associated with AC & DC bidi applications and the potential to support OEMS homologating products in our market. All the major challenges are commercial in nature or related to software interoperability.

The impact of EV and EVSE availability on the Market Objective is summarised in Table 2 and discussed in the remainer of this section 2.1

Table 2 – The impact on equipment availability on the Market Objective

Constraint Description Risk

Bidirectional EV availability

Bidirectional EVSE availability

EV readiness

While there is strong potential for a competitive field (e.g. greater than 10 models) of bidirectional EVs in Australia by 2030, this is not assured. Australia is likely to lag overseas markets until such time as we offer a competitive policy & market proposition encompassing standards maturity and incentives for adoption.

Automakers will need compatible EVSE available in each market, presenting a ‘chicken and egg’ dilemma. Importantly, the initial high pricing of DC EVSE is seen as a barrier to productisation by both EV and EVSE OEMs. This suggests that product/installation rebates, and support for product homologation, could be effective in catalysing additional market offerings of both EVs and EVSEs.

Internationally, we have identified 33 models (excluding model variants) that have ‘current’, ‘announced’ or ‘demonstrated’ bidirectional charging capability. These models are listed in Appendix B (p.71) and summarised by OEM & vehicle platform in Table 3

Of these models, only the Nissan LEAF, Ford F-150 Lightning, Tesla Cybertruck and Mitsubishi Outlander and three GM vehicles currently have capability in production. Renault is currently launching bidirectional charging for the Renault 5 E-Tech Electric in France13 The Ford F-150 Lightning is the only CCS-based vehicle to openly support bidirectional charging in Australia, but its initial custom-import release pricing (>$160,000) puts it out of reach for most Australians.

Nissan has announced CCS-based bidirectional charging from 2026. It says, “Under the banner of Nissan Energy, the company’s aim is to roll-out V2G technology in the UK first, followed by

13 Sibley (2024) Major car makers are rolling out V2G plans this year. Is Australia ready?

other markets in Europe, empowering consumers with either AC or DC-based V2G solutions, in alignment with local infrastructure and regulatory requirements” 14

Table 3 – Vehicles with current, announced or demonstrated bidirectional charging capabilities

Overall, we can say that the vast majority of EVs already sold in the Australian market have the hardware capability to support DC bidirectional charging, but this is yet to be approved, enabled or productised for local mass-market adoption

EVSE readiness

EVSE manufacturing for bidirectional charging combines a range of conventional technologies found in unidirectional charging, and bidirectional power converters such as those used in battery energy storage systems (BESS).

While stakeholders identified no critical hardware challenges to supplying either AC or DC bidirectional EVSE, significant challenges do exist with software development and integration testing required to achieve ‘plug & play’ interoperability between different EV and EVSE models. Many EVSE OEMs are developing, or have developed, the capability to be interoperable, however they are largely waiting for matching EV product offerings. A few significant EV-EVSE integrations are underway but these are typically obscured by commercial confidentiality.

14 Nissan (2024) Nissan to launch affordable vehicle-to-grid technology in 2026

EVSE OEMs (like automakers) are generally prioritising home markets and additional certification, and testing is required to homologate products for alternative markets such as Australia. These issues are explored further below but overall, the timely supply of product to Australia will be most influenced by four factors:

1. Government policy and incentives

2. Australia’s addressable market size including the customer value proposition

3. The accessibility, stability and efficiency of standards and regulatory approval frameworks

4. The availability of capable vehicles (greater numbers will reinforces both EV and EVSE proliferation).

Internationally we have identified over 21 EVSE OEMs offering or developing 26 CCS2 bidirectional EVSEs. These are predominantly designed for DC charging and so include a power inverter (one salient exception to this is the Mobilize Powerbox which supports 3-phase AC bidirectional power transfers up to 22 kW). While four of the 26 charging stations (all public chargers) also have a CHAdeMO connector, among the stakeholders canvassed, this option is not offered on any residential/destination charger (though they are known to exist in CHAdeMO’s Japanese home market)

Automakers and CER installers consider the high cost of DC bidirectional EVSE will present a barrier to mainstream uptake in the near-term as markets for these products do not yet support scale production. While residential DC EVSE products may currently (where available) cost in the order of A$8,000 to A$12,000 initially (installed), the consensus among stakeholders was that this could drop to below A$5,000 by 2030 reflecting a target Bill of Materials (BoM) cost of approximately USD$500-550 The cost is less if you consider the A$1500 to A$2500 cost of installing a unidirectional wallbox charger as the baseline (the cost of bidirectional charging can be considered an incremental increase).

In addition to creating opportunities to consolidate revenue, the relatively high installed cost of DC EVSE is understood to be part of the reason why Renault and Nissan are planning mainstream products based on AC V2G configurations. One of the key advantages of AC bidirectional charging is the ability to leverage vehicle scale-production to drive down unit costs. Installation costs and complexity are also reduced to achieve those similar to a conventional AC wallbox. It is stressed that some unique technical challenges exist in developing suitable, scale-production of bidirectional OBC. For example, volumetric and thermal performance enveloped are more stringent than for outboard power conversion and product life is expected to be consistent with engineered vehicle life (e.g., 20 years). Whilst these challenges exceed those of typical DC V2G solutions, it is noted that vehicle OEMs may leverage cost savings in other vehicle systems to present consumers with a net marginal cost that is more favourable than for DC V2G.

There is also a strong engineering design case for combining power conversion from solar, stational batteries and DC charging in a single unit and this would greatly reduce the marginal cost of bidirectional charging for many customers. This may be most relevant to ‘greenfield’ installations or for customers looking to replace existing inverter technologies at their premises. DC bidirectional charging can be more efficient when recharging from a local DC power source such as solar PV. This can reduce power conversion losses by 20% or more as the

electricity does not need to be converted to AC then back to DC again before it reached the vehicle’s battery.

While several EVSE OEMs and adjacent industry participants are developing integrated home energy management system (HEMS) solutions, the extent of integration and feature offerings are not yet clear in most cases.

2.2. Critical path assessment for power transfer limitations

The potential impact of bidirectional power transfer constraints on achieving the Market Objective are summarised in Table 4 Overall, we consider bidirectional charging constraints to have a moderate impact on the Market Objectives for both 2027 and 2030. Issues are discussed in the remainder of this section 2.2

Table 4 – The potential risk of bidirectional charging constraints on the Market Objective

Constraint Description Risk

BMS BMS are generally considered permissive to DC bidirectional charge operation as they are designed to facilitate large power transfers during driving.

OBC physical constraints

Warranty restrictions

While OBC AC output capacity ranges for V2L vary widely, AC V2H and V2G products are likely to support most consumer use cases.

Automakers will impose EV battery warranty conditions in the context of competitive market dynamics and product technology limitations. This may constitute a risk to consumers where they threaten consumer return on investment. Once we have multiple EV offerings in our market, competition pressures can support warranty conditions becoming more permissive

Low load limits OBC and off-board power conversion equipment can have minimum load requirements that can impact specific use-cases such as V2H and back-up power applications, and low power conversion efficiencies in low-load applications. These will vary in different technology configurations with some OBC efficiencies dropping below 75% (unidirectional) at under 1 kW load15

EV battery bidirectional power transfer potential

The operation of EV batteries is inherently bidirectional, discharging power to drive the vehicle’s motor(s) and importing power from the grid to recharge Peak DC discharge power transfer capability varies widely depending on the nature of power delivery (whether instantaneous or constant) and a variety of internal and external factors (e.g., thermal considerations) – from 71 kW (Hyundai Inster) to 760 kW for a Tesla Model X Plaid or Porche Taycan Turbo GT.16 While these levels can be achieved only for short durations (such as during rapid acceleration) they demonstrate that the DC power transfer capabilities of EV batteries are well in excess of all potential residential, and many commercial applications. While planned residential bidirectional EVSE are typically rated to around 11 or 22 kW, commercial and public charging bidirectional EVSE can be rated more than 100 kW.17

15 Sevradi et al (2003) Experimental validation of onboard electric vehicle chargers to improve the efficiency of smart charging operation

16 These are self-reported ratings as published at ev-database.org

17 E.g., Borg Warner’s RES-DCVC125-480-V2G, or Nuvve’s RES-HD125-V2G

The Battery Management System (BMS) in an EV ensures the battery operates safely, efficiently, and reliably. It provides real-time dynamic constraints to ensure that bidirectional charge operation stays within the battery’s operating specifications. In any bidirectional charging session, the BMS will provide dynamic limits that override any external requests via the EVSE or vehicle telematics.

AC bidirectional power transfer capabilities are primarily limited by the power rating of OBCs. Each of the vehicle brands that have announced AC bidirectional charging capability (Renault, Kia, Volvo & Polestar) have limited AC exports to 11kW. To put this in context, a single-phase residential customer in Australia typically draws in the range of 1 – 10 kW and has a 23 kW grid connection limit. Current V2L AC output range from 2.2 kW (e.g., for the MG 4), to 11 kW (e.g., for the Volvo EX90). Given the technical requirements of bidirectional power transfer need to be packaged within the vehicle, in most passenger vehicles higher power bidirectional solutions necessitate greater cost, volume and thermal payload (however in some cases – e.g., heavy vehicles – these issues can be small relative to total vehicle costs).

Battery health management

Stakeholders had a diversity of view on how battery health considerations would impact bidirectional charging uptake and operation. It was universally viewed that customers would need to be assured about battery degradation. It was noted that customers are likely to draw on their experience of mobile phones (rather than stationary batteries) and their knowledge that there is a direct utility impact from reduced battery health. Customer concerns about driving range and potential battery replacement costs are likely to be amplified by any perceptions that bidirectional charging will contribute to battery degradation.

Various strategies are being pursued to address battery health impacts of bidirectional charging:

• Managed charging – There is a growing body of evidence that bidirectional charging can be managed to diminish its impact on battery health, and it can improve it in some instances.18 Overall, in most cases bidirectional charging is likely to have a lesser impact than other consumer driving and charging behaviours.

• Better batteries – Continuing advances in battery chemistry, cell design and thermal management systems are greatly extending vehicle range and battery lifetimes For example, CATL claims its new EV battery can last 1.5 million km 19 Such innovations will enable more permissive battery warranty conditions and assuage customer concerns It is important to note that most studies to date have been based older EV energy storage systems, and compared to modern products, they will generally overstate the problem

• Warranty restrictions – There were different views as to how vehicle warranty conditions may restrict the use of vehicle batteries. While Nissan has generally had no special restrictions on V2G use, Volkswagen has outlined initial warranty conditions for

18 E.g., Wong et al (2024) Quantifying the impact of V2X operation on electric vehicle battery degradation: An experimental evaluation, Loiselle-Lapointe (2023) Effects of Bi-directional Charging on the Battery Energy Capacity and Range of a 2018 Model Year Battery Electric Vehicle

19 Electrek (2024) CATL launches ultra-high-energy-density EV bus battery that lasts nearly 1 million miles,

its V2G offering of 2 MWh and 800 hours of discharge per year.20 Stakeholders had mixed views around whether such terms can be considered a material barrier to consumer value realisation.

• Battery replacement – Automakers are exploring ways to make EV batteries easier and cheaper to replace at the end of their life

• Making it appealing – A central strategy to overcoming consumer concerns about battery degradation is to make bidirectional charging worth their while. Further discussion on consumer attitudes to this issue is discussed in the section Consumer appetite and readiness from p.41

While battery health concerns were not considered a hard barrier to bidirectional charging being productised in Australia, there was a sense that the above strategies would need to be more fully realised for bidirectional charging to achieve mainstream acceptance In a worstcase scenario, this may be a multi-decadal process to fully resolve.

Heavy vehicles

The Megawatt Charging System (MCS) is derivative of CCS. It is DC-only and natively supports bidi up to 3.75 MW DC for heavy road, rail and vehicles and water vessels. MCS underwent initial testing in 2020 with a v1.0 specification whitepaper released in 2022. MCS’ bidirectional capabilities are expected to have vehicles in this class contribute readily to ancillary services markets given that power magnitudes from individual vehicles can exceed frequency market bidding increments (e.g. 1 MW in Australia).

20 Sibley (2024) Major car makers are rolling out V2G plans this year. Is Australia ready?

2.3. Critical path assessment for standards readiness

The potential impact of standards readiness on achieving the Market Objective are summarised in Table 5 below. Overall, stakeholders considered standards-related issues to have a moderate impact on the Market Objective for 2030. This is primarily associated with the lack of clarity over our market direction for smart grid integration and minimum standards for behind-the-meter interoperability. These issues are discussed in this section and summarised in Table 5

Table 5 – The potential risk of standards maturity on the Market Objective

Standard Description

AS/NZ 4777.2: 2020 There is a clear (albeit untested) path for EV and EVSE OEMs to get certified to a national grid code. AC bidi EV-EVSE certification faces the most uncertain path.

ISO 15118 Incomplete development of support for AC bidirectional charging means that these products are likely to be highly bespoke initially. DC bidi has the fastest path to market although early products may be based on custom 15118-2 integrations.

OCPP Limited industry adoption of OCPP 2.x to date means that other protocols (including earlier OCPP adaptations) may be relied on for remote communications.

CSIP-AUS CSIP-AUS integration, as a critical requirement in the medium term, will be a new consideration for most EV and EVSE OEMS supplying our market. This may require additional development work, commercial partnerships but overall, towards a positive end. OEMs may opt for static export limits in the near-term reducing customer value from V2G. Some work is required to understand best ways to integrate EV charging with dynamic operating envelop (CSIP-AUS) intent in functionally consistent, lowest-cost ways.

Behind-themeter

interoperability

Risk

The lack of minimum standards for interoperability between EVSE, solar and battery inverters and other customer devices is likely to add significantly to customer costs and risks, especially in light of CSIP-AUS requirements that multiple generating devices be orchestrated to achieve export limits at a site-level.

AS/NZ 4777.2:2020

Updates to AS/NZ 4777.2:2020 are considered to provide a clear but untested pathway to grid connection for AC and DC bidirectional charging technologies. Most DNSPs surveyed for this project (covering >90% of the Australian population) indicated they will be ready to connect a bidirectional EV charging system within 3 months (i.e., ahead of any products being certified) and that they intended to rely on the Clean Energy Council Approved Inverter21 listing process unless that presented a barrier to deployment.

The Clean Energy Council (CEC) has advised that bidirectional EVSE will be categorised similarly to stationary battery inverters. Applicants will submit applications via the CEC's normal product listing process. CEC listing for bi-directional EVSE requires AS/NZS 4777-2:2020 (with amendments) and IEC 62477-1. If the device includes PV ports, additional standards such

21 CEC Approved Inverter List

as IEC 62109-1 and IEC 62109-2 will apply. The CEC is currently in the process of making changes to relevant documents and form fields.

Local and international stakeholders considered the use of a single national grid code and certified product listing process as critically important given Australia’s relatively small market size. Local stakeholders also noted the critical importance of timely and efficient CEC listing processes.

Standards compliance concerns

As shown in Figure 4, DNSPs overwhelmingly ranked standards compliance as their greatest concern with bidirectional charging on their networks. This related to AS/NZ 4777.2:2020 (product standard), followed closely by AS/NZ 4777.1:2024 (installation standard). Consumer Energy Resource (CER) standards compliance and enforcement has been a key issue in recent years and bidirectional charging is expected to suffer the same challenges as current technical regulatory frameworks. The Energy Ministers’ CER Roadmap has committed to addressing this 22

Figure 3 – DNSP timeframes and certification process for bidirectional EV charging systems

Figure 4 – DNSP concerns with bidirectional EV charging

ISO 15118-20

ISO 15118 defines high-level communications between a vehicle and an EV charger in a CCS or MCS charging session. The second generation of the standard, ISO-15118-20:2022 (-20) explicitly supports interoperable bidirectional charging communication in addition to many features applicable to advanced smart charging (e.g. communicating SoC information in an AC charging session). Industry stakeholders almost universally supported ISO 15118-20 as an ultimate direction, with some legacy interest in (the US-indigenous) SAE J3068.

The ISO 15118 communications specifications (-2 and -20) can work in parallel. On initiating a charging session both EV and EVSE share which standards and versions they can communicate in order of priority, and the session is initiated at the highest mutually intelligible protocol. Many contemporary CCS bidirectional charging product development processes were initiated prior to -20 being finalised and are based on custom extensions to the older version (ISO 15118-2). This has led to proprietary EV and EVSE integrations (albeit based on open standards) that are effectively not interoperable with other OEM’s products. By consequence, early products to market will involve tight commercial and technical integration between EV and EVSE products.

The following are examples of exclusive EV <> ESVE pairing arrangements that have implemented internationally:

• BMW (Germany) <> Kostal

• Volkswagen (Germany) <> E3DC

• Renault (EU & UK) <> Mobilise

• Nissan (US) <> Fermata

• Ford (US) <> Sunrun

• GM (US) <> GM

ISO 15118-20 is not backward compatible with -2 due to different messaging structures and cybersecurity features As with the shift from CHAdeMO to CCS, the transition from -2 to -20 versions of ISO 15118 involves considerable ‘technology debt’ Moving to -20 can also require hardware upgrades due to higher computation resources associated with data encryption. 15118-20 requires Transport Layer Security (1.3) for all data, ensuring robust cybersecurity

Stakeholders had different understandings of the completeness of ISO 15118-20 and its readiness to support ‘plug & play’ interoperability. In was generally considered that while -20 can support interoperable DC bidirectional charging, it may be several years before all AC usecases are fully standardised. Various international initiatives are underway to resolve outstanding issues within the standard (e.g., in revisions led by ISO) and with its adoption in local regulatory contexts (e.g., by IEA Task 53). MCS (a CSS derivative) is based on ISO 15118-20 and is considered natively bidirectional.

ISO 15118-21 establishes conformance testing against -20 and has so far only been published in draft form.23 Stakeholders indicated that formal conformance testing would be an important requirement for EV and EVSE in the future, underpinning plug & play interoperability between

23 ISO (2024) ISO/DIS 15118-21 - Common 2nd generation network layer and application layer requirements conformance test plan

products and OEMs, and that this should not impede continued innovation and productisation of -20 based products

The Open Charge Point Protocol (OCPP)

Open Charge Point Protocol (OCPP) is a communication framework for EV charging infrastructure and relevant management systems. It is maintained by the non-profit Open Charge Alliance (OCA) and enables interoperability between charging stations and Charge Station Management Systems (CSMSs) from different vendors While designed originally for remote communication, it can also operate locally or work alongside local IoT protocols intended for high-speed local communication (e.g. Modbus, Zigbee, EEBus, MQTT, Thread, Matter etc.)

As is possible with a software framework, OCPP has been customised in a range of projects (e.g., to manage measurement and verification data flows for primary frequency response ancillary service delivery using EVs) or to test pre-production features (e.g., for bidi trials). OCPP has been adopted as a de-facto standard globally and is a requirement in many markets.

Markets globally are currently transitioning from OCPP 1.6 (published initially in 2015) to OCPP 2.0.1 (published initially in 2020), with formal test tools and certification processes released this year). 2.0.1 is not backwards compatible but allows for richer communications and a wider range of applications. OCPP 2.1 - an incremental and backwards-compatible development on 2.0.1 - is still being finalised and is the first version to formally support bidirectional as formal feature.

While stakeholders overwhelmingly considered OCPP 2.x as a cornerstone for remote bidirectional charge management, remote management is not essential in all charging scenarios. As discussed in the next section, Australia’s emerging smart grid architecture implies that customers with multiple generation devices will require some level of local orchestration meaning that local communication protocols may be more relevant in many cases.

CSIP-AUS

The Common Smart Inverter Profile – Australia (CSIP-AUS), is the protocol that facilitates communication between customer CER and grid operators in Australia. It is intended to ensure that CER (especially distributed generation) can communicate with grid operators in a standardised way to manage power flows. It is based on the US Standard IEEE 2030.5.

CSIP-AUS has four current and potential near-term use-cases, as described below.

1. Flexible export limits

Distribution networks have limited export hosting capacity that has traditionally been allocated using static export limits (e.g. 5 kW for a single-phase connection). As more solar systems connect, some areas of the grid are facing export congestion and per-customer static limits are being ratcheted down to 1.5 kW or even 0 kW. An alternative to static export limits is flexible export limits that are derived from actual network conditions and communicated to customer devices in near real-time. This generally means that customers can export more power (e.g. up to 10 kW), more of the time.

Flexible exports are currently offered in SA, WA and Qld and this will extend to all mainland jurisdictions in the next few years. They are especially valuable for bidirectional EV charging as price incentives for exports will mostly align with periods of peak demand (i.e., when export capacity limits are most permissive). Flexible exports will also increase solar curtailment during very sunny days, allowing connected EVs to self-consume solar at zero (or negative) cost.

Fall-back behaviour requirements are included in CSIP-AUS to ensure that CER can continue to operate safely and effectively even when communication with the utility or proxy server is lost:

• Default operating mode – In the event of a communication failure, CER must revert to a default operating mode that ensures grid stability and safety.

• Predefined settings – CER should follow predefined settings for voltage and frequency regulation to maintain grid support during communication outages.

• Local control – CER must be capable of local control to manage their output and protect themselves and the grid from adverse conditions.

• Reconnection protocols – Once communication is restored, CER should follow specific protocols to reconnect and resume normal operations without causing grid disturbances

2. Emergency backstop

Australia’s world-beating rates of rooftop solar uptake is resulting in increasingly low minimum demand on transmission networks (i.e., ‘duck curves’) and this can impact power system security. A requirement that new solar systems can be curtailed during critical minimum demand events is a mandatory requirement in SA, WA and Vic, and this is likely to extend to all mainland jurisdictions in the next few years. While emergency backstop schemes only apply to solar systems, system implementation architectures imply that only one CSIP-AUS client will be provided for at each customer premises. This means that where a customer has emergency backstop requirement for solar, and flexible exports for solar and bidi, these systems will need to be integrated through a local energy management system (EMS)

3. Dynamic load control

The Queensland Electricity Connection Manual24 requires that all EVSE >20A (i.e. hardwired) must participate in a network load management scheme. These include ripple control and DRM remote disconnection schemes, but also via CSIP-AUS which allow for more fine grain control (called ‘dynamic EVSE management’). enX understands that other jurisdictions are considering trailing similar requirements in the next few years. The main implication of dynamic load control schemes is that the EVSE must operate behind a single CSIP-AUS client, requiring an EMS able to coordinate multiple CER in the event of a loss of communications.

4. Dynamic pricing

The Distributed Energy Resource Integration Application Interface Technical Working Group (DERIAPIWG) is currently working on a pricing module extension for CSIP-AUS which would allow for pricing to be communicated from electricity networks and/or retailers directly to

agents appointed by customers to manage their CER. This will allow for more dynamic, and locationally specific prices to be published such that CER operation can be better aligned with customer’s interests. Dynamic pricing is recognised internationally as achieving efficient grid integration and system-value transfer to consumers.

The need for market guidance

Australia’s use of CSIP-AUS is considered favourably by international supply chain stakeholders once it is understood. However, information resources on these topics are diffuse and stakeholders are generally unclear how our approaches form a coherent smart grid architecture. There is a ready opportunity to address this issue through trustable national guidance on Australia’s emerging smart grid architecture models.

Similarly, Australia lacks clear direction on future standards requirements. This is considered salient in the context of behind-the-meter interoperability given our likely future reliance on local communication protocols to enable compliance with CSIP-AUS requirements and to ensure customers can interoperate CER devices to achieve the most value from their investments.

Support for local market homologation

Aligning international technology, standards, and framework development with local needs was also considered by stakeholders to lead to investment efficiencies, benefiting both product vendors and consumers.

Australia is adapting a range of globally common smart grid frameworks (including IEEE 2030.5) to address issues in distribution and transmission networks associated with CER and EV proliferation. Currently, IEEE 2030.5 firmware stacks are not widely used in developing EVSE solutions. These solutions mainly focus on creating a gateway for communication between EV, EVSE, and CSMS. Many CSMS vendors can support IEEE 2030.5 client functionality, as its commands are often replicated in Open Charge Point Protocol (OCPP) development (specifically in OCPP 2.x). This setup works well when the site only has EVSEs, but it doesn't when there are diverse types of CER at the site that need to be controlled under a single IEEE 2030.5 client. An on-site EMS can manage this, and in the future, a virtualised EMS in the cloud might do the same if permitted by the DNSP authorising the CER connection

Various stakeholders noted that policy and funding support processes for local market homologation could be directed to providing greater clarity on local market homologation needs to solution vendors, most of whom are based outside Australia. This could be supported by facilitating informal pre-certification testing with capable laboratories and events such as ‘testivals’ that have been highly successful in supporting industry development in other markets.25 This would help attract vendors to the Australian market ultimately benefiting Australian consumers with greater choice and lower prices

25 For example, the Open Charge Alliance runs regular ‘Plugfests’ in Europe

2.4. Summary of preconditions for mass-market bidi deployment

In summary, stakeholders consulted for this study indicate that the key preconditions for mass-market bidirectional charging product availability in Australia include:

Global conditions

• Commercial decisions on EV feature prioritisation by global automakers

• A competitive supply of charging equipment (AC & DC)

• Frameworks to manage concerns over vehicle battery health related to bidirectional charge operation

• Integration testing for EV<>EVSE communication (via ISO 15118)

Key end-market conditions

• Clear and supportive government policy

• OEM confidence in a compelling consumer value proposition

• Large addressable market relative to market entry costs

• Consumer understanding and willingness to engage

• Permissive national grid connection codes and market participation frameworks

• Clear and efficient processes for product homologation

3.

Exploring bidirectional charging value streams

This chapter explores the potential consumer value streams associated with bidirectional EV charging internationally and in an Australian market context. Energy arbitrate (retail or wholesale) is identified as the largest potential source of value. Providing support to local networks is also highly valuable but more dynamic tariffs are required to facilitate efficient value transfer to consumers. While backup power will be highly valued by some consumers, it may be less of a driver of consumer interest in Australia compared to markets with less reliable power systems.

The long-term future for bidirectional changing remains open-ended and we may not fully grasp all the ways in which it can be used. In this section, we will explore six potential bidirectional EV charging value streams that emerged from our literature review and stakeholder discussions:

1. Backup power supply – The vehicle can provide a back-up or mobile power supply

2. Energy arbitrage – The vehicle battery can be charged and discharged to arbitrage electricity prices or increase renewable energy utilisation

3. Network support - The vehicle battery can be discharged to mitigate local peak demand constraints

4. Frequency response – The vehicle battery can be discharged to mitigate underfrequency conditions in a power system (frequency raise). While vehicles can similarly be made to charge or cease exporting to support lowering power system frequency (frequency lower) this does not require V2G

5. Load balancing – The vehicle battery can be discharged to mitigate a local behind the meter power constraint such as a grid connection limit

6. System restart – The vehicle can be coordinated to provide power generation restart services to a system operator in the event of a wide-spread power outage (‘system black’).

3.1. Critical path assessment for bidirectional charging value streams

For each value stream we examine technology preconditions and commercial maturity in Australia the US and Europe. Risks to the market objective are as summarised in Table 6

Table 6 – The potential risk of value stream constraints on the Market Objective

Constraint Description Risk

Access to dynamic electricity tariffs

Access to network support value

Minimum bid size for FCAS

Residential and commercial customers currently have access to spot price passthrough tariffs which effectively value bidi market participation. VPP models are also readily able to be redesigned for customers opting for lower risk / lower value returns.

Solar soak tariff arrangements are emerging that would support bidi operation however dynamic tariffs (or network service contracting) are needed to ensure optimal operation. There are limited incentives for DNSPs to expedite dynamic tariffs and the regulatory pathway under the current pricing rules.

FCAS could be a complementary value stream for some commercial fleets and particularly, heavy vehicles. Overall, FCAS is considered by stakeholders as a secondary (and diminishing) source of value. AEMO’s 1 MW minimum bid increment requirement will provide a barrier to market entry for many small fleets and vehicle classes and provide a barrier to early scaling

3.2. Back-up power supply

Bidirectional charging can provide an alternative power source when the customer is unable to access power from the grid. This can include the vehicle acting as a mobile generator to power a worksite or campsite (V2L), or as a backup generator feeding a home or building circuit (V2H/B) during a power outage. Defining features of this use-case include:

• The AC output of either the vehicle (AC V2G) or bidirectional charging station (DC V2G) is ‘grid-forming’ and electrically separated from the power grid26

• The EV and EVSE do not need to be grid code (AS 4777.2:2020) compliant.

Stakeholder considered that the ability to access an alternative power source is likely to be highly valued by some consumers. Further, not requiring grid code compliance can reduce hardware and installation costs and using EVs as energy storage only for backup purposes implies a relatively low duty cycle minimising battery health concerns. For these reasons, the alternative power supply use-case has been early to market, with 72 models in the European market offering V2L capability27 and several products now offering V2H in the US

Stakeholders consider the addressable market size for V2L is very large, and that it will increasingly be a standard feature on new EV models. This extends across all residential, commercial and rental vehicles and some heavy vehicles. Trucks using MCS are typically DC only, meaning that additional costs would be associated with integrating an OBC for V2L purposes (which are likely small given the relative cost of commercial vehicles).

26 Grid forming in this context means the inverter can maintain 50hz frequency without reference to the grid 27 enX analysis of www.ev-database.org Accessed August 2024

Stakeholders had different views as to the long-term customer utility of V2H/B for back-up power supplies in Australia outside of off-grid situations. While V2H/B has been an early focus particularly in the US, Australia generally has more reliable power supplies which translates into a lower benefit for customers. This issue is compounded by the relatively high capital and installation costs of back-up power relative to the reduced benefits. Additional equipment and labour costs are required to install switching devices. It was considered likely however that this would appeal to a subset of engaged customers until such time as grid-connected (V2G) applications, that are also able to provide back-up power supplies, become more prevalent and lower cost.

A survey of 40 installers undertaken by enX and the Smart Energy Council found that 85% considered back-up power was likely to be a popular use case for bidirectional charging. The most popular use case was export-enabled V2G with backup power capability, providing both revenue and energy security benefits for the customer.

Case study 1 – AC backup power

Several Australian websites promote solutions to power residential circuits using on-board power conversion. Options include coupling via the auxiliary input on a hybrid inverter, allowing the invertersupplied load to be switched alternately from the grid or a V2L power supply. In one instance, an IONIQ 5 was configured to supply 3.6 kW to a home backup power circuit.28

In the US, Tesla’s Powershare Home Backup equipment, available with Cybertruck, can detect a grid outage and provide back-up power up to within 1 minute. The power capacity is large (11.5kW offering up to 123 kWh) which could power an average Australian home under most conditions for several days. This solution implements a Tesla-specific charging station and gateway to detect grid outages and switch between EV and grid sources in a ‘break-before-make’ manner.

3.3. Energy arbitrage

Case study 2 – DC backup power supply

In the US, Ford is offering an early V2H product that allows a home to run off the Ford Lighting F150 in grid islanded mode

The EVSE is electrically connected to, and communicates with, a supplied 'Home Integration System' comprising a bidirectional inverter. The inverter is not grid synchronised and only operates when the mains power is not connected Switching from mains to backup power is automatic and managed by the Home Integration System.

The backup power capacity is large (9.6kW, and up to 151 kWh) which could power an average Australian home under most conditions for a week.

Importantly, the DC side of the inverter has a DC bus to connect other DC power sources common to residential settings (e.g., solar PV, stationary batteries), enabling the vehicle to recharge from the solar while disconnected from the grid.

Energy arbitrage is the ability to charge when electricity prices are low and discharge during periods of high prices. This includes solar-self consumption when charging occurs during periods of excess local solar production. Stakeholders universally considered this the highestvalue and most scalable use-case for bidirectional charging across all transport sector contexts.

The value case for energy arbitrage is predicated on conditions where the Australian market has some comparative advantages including highly dynamic wholesale energy prices, the availability of time-varying consumer energy tariffs, smart meters and high uptake of rooftop

28

(2024) How to power your home from an EV with V2L

Wattever

solar. Flexible export limits also support the value case in Australia as they offer greater export capacity when electricity prices are high.

In a residential context, customers can arbitrage based on time-of-use (ToU) tariffs or dynamic ‘spot passthrough’ tariffs e.g., as offered to residential customers by Amber Electric. Bidirectional charging resources can also be aggregated into Virtual Power Plants (VPPs) and traded to offset a supplier’s wholesale market price exposure. Stakeholders indicated that EV smart charging was already benefitting from spot passthrough tariff arrangements in some residential and trucking contexts.

Case study 3 – Renault 5 E Tech V2G

Renault is currently launching Europe's first mainstream, commercial AC V2G offering for residential customers. Bidirectional charging will enable customers to make their electric car battery available to supply power to the energy system and receive a financial reward for doing so.

The Mobility House aggregator platform will enable owners of the Renault 5 and later models to participate in wholesale power and energy markets via a Mobilize electricity contract (a Renault Brand) Customers are being offered zero-cost, zero emissions EV charging 29

Case-study 5 – Team Global Express

Case study 4 – Nissan Platform V2G

Nissan has recently announced it has become the first car brand to receive G99 grid code certification in the UK for AC V2G and that it intends to offer bidirectional charging in its vehicles from 2026. Supporting both AC and DC configurations, Nissan notes that while AC involves lower installation costs, DC allows for direct charging from solar reducing power conversion losses.

Nissan claims customers can reduce their annual electricity costs incurred with an electric car by up to 50 per cent.

Team Global Express (TGE) is running Australia’s largest logistics EV fleet initiative, involving 60 rigid electric trucks at its Bungarribee site in Western Sydney. The aim is to explore the feasibility and benefits of integrating electric trucks into their logistics operations, focusing on sustainability and reducing carbon emissions.30 A key feature of the trial is the smart charging of trucks overnight against a dynamic electricity tariff.

While bidirectional-capable vehicles are not yet available to trucking fleet operators in Australia, TGE sees V2G as a natural extension to its fleet capability that can improve EV fleet ROI. Importantly, TGE considers the fleet has sufficient flexibility in their overnight recharging schedule to allow for some dynamic price arbitrage.31

EU market experience in energy arbitrage

Solar self-consumption is an important motivation among German consumers as recent research indicates. The first V2G tariffs/services launched (or announced) by carmakers Renault, Volkswagen, BMW and Volvo also explicitly target energy arbitrage The first commercial V2G tariff available in Europe is Octopus Energy's Power Pack in the UK. This tariff add-on works with dynamic prices for consumption, while exports are centrally managed under a VPP model

29 TMH (2024) Mobilize selects The Mobility House as technology partner for their vehicle-to-grid service

30 See TGE (2023) Project Cobra – Lesson Learnt Report

31 Information sourced via an interview with TGE

The announced V2G tariff by The Mobility House in cooperation with Renault in France, and at a later stage in Germany and the UK, will involve static prices for the consumer. In the background, however, optimisation takes place on various spot markets (day ahead, intraday). BMW has indicated that wholesale arbitrage is a second phase to be introduced (in combination with a dynamic energy contract) in its announced bidirectional charging bundle for 2025/2026 with energy supplier Eon.

In markets where dynamic energy contracts (wholesale spot market passthrough) have been around for longer, such as Norway, Sweden, Denmark and to a lesser extent the Netherlands, consumer batteries are active in day-ahead and intraday markets, with arbitrage being a key use case (alongside solar self-consumption). This is considered to extend easily to bidirectional EV charging. In Germany, dynamic energy tariffs are now slowly being introduced ahead of mandatory requirements for all major suppliers being introduced from 2025

US market experience in energy arbitrage

Consumer tariff arbitrage is seen as a relatively attractive offering to project proponents and equipment manufacturers, as it does not require updates to wholesale market participation models. Today’s implementation relies on market-informed retail pricing (e.g., PG&E’s V2X Pilots’ dynamic pricing rate32) or other real-time-equivalent pricing.33

Of note is that solar export tariff incentives across the US do not apply to bidirectional charging since the authorising statutes require exports be clean/renewable generation, and EV charging cannot reasonably be expected to be exclusively accomplished with clean/renewable generation. However, there are pending proposals to support greater retail energy arbitrage through bidirectional charging equipment, including in California (Southern California Edison (SCE) Vehicle-to-Grid Resource Proposal (VGRP34), Michigan35, and Maryland (DRIVE Act36).

The Federal Energy Regulatory Commission (FERC) issued Order 2222 in 2020 directing wholesale market operators to facilitate the participation of CER directly in wholesale markets. While the US system operators are at differing levels of compliance, those that are compliant have seen little to no wholesale market participation from CER Overall, addressing barriers to wholesale market participation is considered a low priority for industry advocates as dynamic retail programs have the potential to sufficiently support bidirectional charging.

3.4. Network support

Stakeholders universally acknowledged that, with the right incentives, off-peak charging of EVs can contribute to higher network utilisation (average-to-peak power ratio) thereby lowering network prices for all network customers. Bidirectional charging can amplify this benefit by discharging during network peaks to reduce stress on the grid and associated network capital expenditure. This is born out in small-scale modelling which shows that V2G

32 PG&E Resolution E-5326

33 Driscoll (2023). New Hampshire utility offers dynamic rates for distributed storage exports

34 SCE (2024) Phase 2 of 2025 General Rate Case. Amended Rate Design Proposals p.120-131.

35 MPSC (2024) Vehicle to Grid (V2G) and Energy Storage System Tariff Discussions

36 Martucci (2024) Bidirectional EV charging, VPP bill passes Maryland Assembly

operation can substantially reduce substation critical peak demand while mitigating solar demand troughs 37

enX surveyed 8 DNSPs (covering > 90% of the Australia’s population) on a range of questions including what they perceived as the main benefits of V2G. As shown in Figure 5 below, the most highly ranked benefits included peak demand mitigation, with significant secondary interest in volt/var (reactive power) support. It was noted that as V2G operates during nondaylight hours, this service, required under AS/NZ 4777.2:2020, would extend over a longer period and this could reduce need for investment in inductors at bulk supply points. This is generally not a paid service in Australia.

Figure 5 – DNSP ranked top benefits of bidirectional EV charging

Internationally, the two main forms of network support incentives are network support contracts (including via flexibility markets) and tariffs. While both approaches have strengths and weaknesses, Australia is going down a path of tariff reform, implementing more ‘cost reflective’ ToU tariffs with trials of dynamic tariffs that respond to power system conditions.38 Dynamic tariffs can be considered more efficient than ToU tariffs as they are able to more fully reward load curtailment and generation when the grid is stressed, and they do not encourage battery cycling outside of these times.

39

Supply chain stakeholders generally considered that, for these reasons, dynamic tariffs (or network support contracts) are a good way of harnessing bidirectional EV charging for network support. Of the DNSP’s surveyed, only three have an intention to introduce specific incentives for peak demand support, beyond ToU tariffs.

EU market experience in network support

Volvo & Polestar's bi-directional charging trials in Sweden involve distribution system operators who already have experience with distributed flexibility through a local flexibility

37 enX (2024) Network tariffs for V2G

38 e.g., Ausgrid’s Project Edith

39 enX (2024) Network tariffs for V2G

marketplace.40,41 V2X Suisse's rental fleet bidirectional charging has also been co-optimised with local grid conditions as dynamic input. A stated goal of We Drive Solar is to contribute to solving local grid congestion through bidirectional charging 42

Beyond these pilots, the pathway for broader-scale local grid support services is not immediately obvious. In Germany, Redispatch 3.0 is exploring potential Controllable Local Systems (CLS) interfaces for real-time coordination, and information exchange across voltage levels will be demonstrated within this project, as well as open HEMS interoperability standards.43 In the UK, EV participation in local flexibility markets via third party aggregators is more common.44

In September 2024, the European Commission issued guidance to Member States that they should ensure that dynamic price contracts are available to customers and ensure that distributed energy resources (such as EVs) can participate in balancing service markets, notably for grid congestion management 45

US market experience in network support

Industry progress in local network support services is closely linked to dynamic rate implementation. While dynamic pricing pilots in California incorporate a distribution pricing signal, the exact rate design methodology is still being experimented with, with PG&E’s upcoming implementation to leverage a ‘scarcity price curve’ and a ‘circuit clustering’ approach.46

3.5.

Frequency response

Frequency response involves the rapid increase or decrease in power levels (generation or load) to help keep power system frequency at around 50 Hz. Frequency response from bidirectional charging has been successful in a range of market contexts, going back to demonstrations by AeroVironment and AC Propulsion in 2001.47 The largest demonstration was the Parker Project in Denmark which, concluded in 2019, investigated the scalability and replicability of V2G frequency response services 48 In Australia, the REVS trial demonstrated the response of 16 V2G EVs to a frequency contingency event that occurred in the Australian

40 Lindholmen Science Park (2024) Results show great potential for balancing power grid with electric car batteries

41 Polestar (2023) Polestar supports the future of EV-supported power grids

42 Utrecht University (2021) World’s first integrated study into a city-wide, future-proof and flexible electricity system

43 NOW GmbH (2024) Enabling non-discriminatory bidirectional charging, p.11

44 Ofgem (2024) Ofgem lays the groundwork for consumer friendly flexible energy use

45 European Commission (2024) Guidance on Article 20a on sector integration of renewable electricity of Directive (EU) 2018/2001

46 Circuit-specific pricing has been referred to as computationally challenging. Instead, “circuit clustering” defines a few dozen representative circuits and calculates price schedules for each. A participating customer’s circuit is mapped to one of these representative circuits based on shared characteristics. When done across many customers, this creates circuit clusters. This avoids the computational burden of circuit-specific calculation but avoids the complete dilution that would come with a single, utility-wide distribution capacity component. For more information. See PG&E (2024) Resolution E-5326

47 Eisler (2023) False Starts: The Story of Vehicle-to-Grid Power

48 Anderson et al (2019) The Parker Project Final Report

national grid on the 13th of February 2024 The EVs were part of a fleet of 51 Nissan LEAF vehicles providing DC bidirectional frequency response.

Stakeholders had mixed views on the relevance of frequency response to the value case for bidirectional charging, noting:

• Low energy requirements – As frequency response services are based on enabled capacity rather than energy transferred, vehicles can earn revenue without significantly increasing the battery duty cycle.

 Shallow market – Frequency response markets are relatively shallow and are likely to be oversupplied in the medium term as large-scale batteries and demand response (including via unidirectional charging) becomes more abundant.

 Market enrolment – These markets often have high minimum bid quantities (e.g. 1 MW in Australia) which provides a significant barrier to market entry for smaller fleets Heavy MCS vehicle fleets, with larger capacities, may be able to reach these thresholds sooner.

Figure 6 (next page) provides an estimate of per-vehicle revenue potential in each of the ten frequency control ancillary services (FCAS) in Australia’s National Electricity Market.

The two regulation markets are considered not relevant to bidirectional charging as they currently require a direct SCADA connection to AEMO’s Automatic Generator Control (AGC) system which is not available to most electricity customers.

Outside of that, most of the value rests with the Very Fast Raise market which requires a full response within 1 second. This requirement was considered reasonable for DC V2G charging under 15118-20 Dynamic Mode but largely untested in an AC V2G context. For reference, BMW and Kostal have demonstrated response times of 250ms49 and some EVSE OEMS reported that 100ms response times are achievable in a DC charging context. While these are within the response limits of Very Fast markets, bidirectional charging may remain uncompetitive compared to faster assets in the market (e.g. large-scale BESS providing ‘synthetic inertia’). Based on 2024 YTD pricing however, the Very Fast Raise market could offer short term revenues in the order of $200-$300 per vehicle per annum.

Overall, stakeholder considered frequency response as a secondary use-case that may be valuable in specific applications such as heavy vehicle fleets which have sufficient scale to meet minimum bidding increment thresholds.50 This may especially impact market participation from EV fleets where aggregators will have to account for uncertainty associated with driver plug in behaviour.

49 Sibley (2024) Major car makers are rolling out V2G plans this year. Is Australia ready?

50 Various parties have argued that reducing the minimum bid increment to e.g., 100kW facilitate greater participation by CER in FCAS markets. See for example: Grids (2023) AEMC Rule Change Submission

Figure 6 – Estimated per vehicle potential FCAS earnings. Assumes 5kW of registered capacity per vehicle, available 50% of a year. FCAS prices are derived from Jan-Jun 2024 actuals.51

FCAS Market Description $/EV/year Applicable to V2G

Regulation Raise Corrects under frequency, controlled by AEMO AGC system

Regulation Lower Corrects over frequency, controlled by AEMO AGC system

Contingency

Very Fast Raise

Autonomous response within 1 second when frequency is below 49.85 Hz

Contingency Very Fast Lower Autonomous response within 1 second when frequency is above 50.15 Hz

Contingency Fast Raise Autonomous response within 6 seconds when frequency is below 49.85 Hz

$72 Not yet demonstrated

$39 Not yet demonstrated

$250 Demonstrated with DC V2G only

$7 Demonstrated with DC V2G only

$20 Yes

Contingency Fast Lower Autonomous response within 6 seconds when frequency is above 50.15 Hz $0 Yes

Contingency Slow Raise Autonomous response within 60 seconds when frequency is below 49.85 Hz

Contingency Slow Lower Autonomous response within 60 seconds when frequency is above 50.15 Hz

Contingency Delayed Raise Autonomous response within 5 minutes when frequency is below 49.85 Hz

Contingency Delayed Lower Autonomous response within 5 minutes when frequency is above 50.15 Hz

3.6. Load balancing

$13 Yes

$20 Yes

$0 Yes

Load balancing is a hypothetical use-case whereby the vehicle battery is discharged to mitigate a behind-the meter electricity constraint such as a grid connection limit. Stakeholders considered this may be potentially valuable in fleet applications to offset consumption of other energy using devices (e.g. air conditioning) to stay within connection limits and/or avoid demand charges under a commercial network tariff.

3.7. System restart

After a grid outage, power system operators need to coordinate the connection of new generation and load so that it remains roughly in balance. System Restart Ancillary Services (SRAS) are procured by AEMO to assist with this process. While it is conceivable that a bidirectional EV could be coordinated to provide power generation restart services to a system operator (it would need to ‘grid form’ and likely power large sections of networks), we found no evidence that this is considered a viable value stream in any transport sector context.

4. Consumer appetite and readiness

This chapter explores a range of issues relevant to consumer engagement with bidirectional charging. Potential barriers to consumer adoption include vehicle availability and concerns over battery degradation, EV charge readiness and upfront costs. Installation rebates are identified as key means to drive early market development. Our research concludes that while consumer awareness of the technology is currently low, some are already primed to embrace this technology, and enthusiasm is likely to spread to more mainstream consumers as product offerings mature.

4.1. Critical path assessment for consumer appetite and readiness of this technology

The potential impact of consumers’ acceptance of technology change on achieving the Market Objective are summarised in Table 7. Overall, we consider consumers’ acceptance of bidirectional charging products and services to have a moderate to high potential impact on the Market Objectives for both 2027 and 2030.

Table 7 – The potential risk of consumer appetite and readiness on the Market Objective

Constraint Description Risk

Acceptance of technology change

Interest and willingness to adopt

Concerns about bidirectional charging

Low appetite for export enabled bidirectional charging

Financial incentives

Rooftop solar and battery systems have primed consumers for gridfriendly energy use, creating ideal conditions to support the uptake of bidirectional charging.

Some consumers are holding off buying an EV until bidirectional charging becomes available, demonstrating strong interest among those familiar with the technology.

Some concerns, such as battery degradation and warranty limitations, need to be addressed upfront, while others will likely ease as the market learns from and adapts to consumer preferences

Initially, some consumers may prefer export-limited bidirectional charging. As familiarity grows, grid-enabled options may become more popular.

Most consumers will expect material and transparent financial returns in exchange for their investments. This could be supported by hardware rebates, favourable tariffs, and incentives for frequent plug-in behaviour

4.2. Consumer interest in bidirectional charging

Stakeholders considered that Australia’s widespread adoption of solar systems and home batteries has familiarised many consumers with ‘energy generation’ and ‘energy optimisation’

technologies and practices, creating a strong foundation for the acceptance of bidirectional charging

While a large portion of the population is likely to lack awareness of bidirectional charging,52 stakeholders regularly spoke of a cohort on the opposite end of the spectrum who are ‘desperate’ to introduce bidirectional charging into their lives Further, stakeholders have reported that many consumers were holding-off on buying an EV until this technology was available. This view was strongest among stakeholders who had direct contact with consumers or received insights via EV sales channels. Automakers are getting feedback through sales channels that a significant group of potential EV purchasers are seeking this functionality.

There appears to be a close link between the motivations of those currently inclined to buy an EV and those who will likely be early adopters of bidirectional charging technology Stakeholders reported that within the broader group of EV owners, there is a sub-group who purchased their EV with the belief that they would be able to utilise the EV’s bidirectional charging capability beyond just V2L, specifically owners if the Nissan Leaf and Mitsubishi Outlander PHEV, which have bidirectional charging capabilities. However, market limitations, such as compliant EVSE availability, have largely prevented bidirectional functionality in these vehicles being used.

In Project Sciurus in the UK, 61% of participants indicated they would likely choose Nissan for their next EV if it remained the only manufacturer offering V2G-enabled vehicles 53 A 2023 survey in the UK revealed that 49% of prospective EV buyers indicated a higher likelihood of purchasing an EV if it was capable of bidirectional charging 54 A 2023 Australian survey found that the availability of V2G features significantly impacts consumer choice, with willingness-topay for V2G ranging from AUD $2,319 to AUD $5,346, depending on implementation 55

A survey of 40 installers undertaken by enX and the Smart Energy Council found that there may already be strong on-the-ground interest in this technology in Australia, despite it not yet being available outside of trials As shown in Figure 7, this interest is expected to sharply increase as EVs become available and charger costs come down.

52 Battery Storage and Grid Integration Program and Realising Electric Vehicle-to-Grid Services (2021) The A to Z of V2G

53 Cenex (2021) Project Sciurus Trial Insights: Findings from 300 Domestic V2G Units in 2020

54 Dean et al (2024) Assessing Public Opinions of and Interest in Bidirectional Electric Vehicle Charging Technologies: A U.S. Perspective

55 Philip et al (2023) Adoption of electric vehicles in a laggard, car-dependent nation: Investigating the potential influence of V2G and broader energy benefits on adoption

7: Results from 2024 survey of 40 Australian installers of EV chargers

How do you see customer interest in bidirectional charging?

There is already strong interest

Likely to be strong interest once EVs become available

Likely to be strong interest only once EVs become available and charger costs come down

Unlikely to be strong interest

In Germany, where the public discourse on bidirectional charging is more advanced, 28% of surveyed installers reporting that they are approached about bidirectional charging for every second installation request.56

Potential motivators of bidirectional charging adoption

Financial rewards are consistently shown to be the most effective motivator for consumer participation in bidirectional charging programs. The SCALE trial in Europe found financial benefits are the a key priority for EV drivers when adopting smart charging and that willingness to participate in vehicle-to-grid increases significantly when participation is linked to financial incentives 57 Similarly, US studies indicated that 80–89% of consumers would be interested in purchasing an EV equipped with bidirectional charging if they received annual incentives between $300 and $1,000 58 The AGL Orchestration Trial found Whether it be charging via solar, or overnight at a cheaper “off peak” rate, evidence suggests EV owners seek to minimise their charging costs, supporting the belief that financial rewards are likely to be a highly motivating factors in bidirectional charging.59

Most stakeholders also felt that strong financial returns would be crucial in the early stages of bidirectional charging to offset initial high costs, uncertainties and inconveniences associated with a less-mature market. Section 5.2 – Near-term customer value (p.53) provides more information on the potential financial returns to consumers

Our desktop review and stakeholder consultations also identified a range of non-financial motivations for utilising energy management technology:

• Environmental concerns – Many consumers are motivated by the desire to reduce their carbon footprint and increase renewable energy use.

• Technological enthusiasm – Early adopters and tech-savvy individuals are often driven by the innovation and novelty of bidirectional charging systems.

56 EUPD (2024) Bidirectional charging: perspectives and challenges for prosumers, installers and legislation

57 Smart Charging Alignment for Europe (2023) Report on Consumer Behaviour

58 World Resources Institute (2022) Smart Charging and Consumer Behavior in the United States

59 AGL (2021) AGL Electric Vehicle Orchestration Trial

Figure

• Energy independence – The ability to use an EV as a backup power source for homes, especially during grid outages, appeals to those seeking greater energy self-sufficiency.

• Grid stability – Some consumers are motivated by the opportunity to help stabilise the grid by participating in energy balancing through bidirectional charging.

• Enhanced EV utility – Using an EV for both transportation and energy storage enhances its value and attracts consumers looking to maximise the utility of their vehicle. This especially applies to backup power use cases.

• Social and community benefits – Some consumers are motivated by the idea of contributing to broader community sustainability and energy resilience through their involvement in bidirectional charging.

• Government incentives – Rebates, tax credits, or other government programs that provide financial assistance encourage many consumers to adopt the technology by building awareness, trust and some ‘fear of missing out’.

Demographics and psychographics of early adopters

Research shows that early adopters of EVs are typically higher-income, well-educated homeowners with a strong interest in sustainability and new technology. 60 These consumers are more motivated by environmental benefits, novelty and the practical advantages of more active energy management. Bidirectional charging is expected to appeal to this same group middle-to-high income, environmentally conscious homeowners, most often older and male As with other CER technologies, access this technology will be easiest to access for customers in an owner-occupied, standalone dwelling.

Project Sciurus identified key adopter groups, including two archetypes that are useful to help identify potential early adopters in Australia – the Retired Professional, who can leave vehicles plugged in for longer, maximising energy export during peak demand, and the Tech Enthusiast, younger and drawn to the novelty of interacting with smart technology. Stakeholders regularly echoed these archetypes as the likely earliest adopters with particular focus on retirees with existing solar systems and time to invest in learning about the technology

However, stakeholders also cautioned against generalising the views and priorities of early adopters to the broader population who are likely very different in motivations and lifestyles. It was generally considered that bidirectional charging products would need to be simpler, with lower upfront costs and stronger financial returns, to achieve a level mainstream acceptance comparable to solar. This implies that early adopters would provide a testing ground for early market products, allowing them to evolve overtime in design, messaging and pricing. It is difficult at this early stage to predict how mainstream Australia will prioritise adoption of this technology, as by their nature, almost all trials of bidirectional charging, EV ownership and smart charging have involved only early adopters.

Self-consumption versus exporting to the grid

Some stakeholders reported that in the initial stages of bidirectional charging adoption, they expect that many early adopters will not want to export back to the grid. This is consistent with some of the findings in bidirectional trials, such as the SCALE trial, which found that many EV

60 Yozwiak et al (2022) Clean and Just: Electric Vehicle Innovation to Accelerate More Equitable Early Adoption

owners preferred to keep the energy stored in their vehicle for home use rather than exporting it 61

Both Project Sciurus and Australia’s REVS project noted that participants were hesitant to engage with grid export function due to concerns about the potential impact on battery lifespan 62 Additionally, consumers often lack clear information about the financial benefits of exporting energy, which further reduces their willingness to participate.

As financial incentives become more transparent and consumers grow more familiar with the technology, there could be a shift in preferences towards greater participation in exporting to the grid. For this shift to occur, it will be essential that consumer’s feel their concerns have been addressed. Encouragingly, in a US study, around 51% of participants said they would allow their power company to discharge energy from their vehicle during grid emergencies if they were compensated and guaranteed a minimum battery state of charge 63 This willingness to participate in bidirectional charging indicates that with clear communication and financial incentives, consumers’ views can be shifted.

Of the 40 installers surveyed for this study, there was an expectation that export-enabled V2G would, on average, be slightly more popular than export-limited V2G.

4.3. Changing consumer behaviours

Despite consumers’ vehicle purchase and driving behaviour often being highly personalised and closely tied to lifestyle, consumers upgrading to EVs are showing willingness to shift their behaviour to integrate this technology into their lives. Consumer attitudes towards EVs in Australia are evolving, with growing awareness of environmental benefits, EV price reductions and long-term cost savings driving practices as well as smart charging behaviours.

Early adopters in trials like the AGL Electric Vehicle Orchestration Trial have shown positive engagement with smart charging solutions, reflecting a readiness to embrace technologies that offer clear financial benefits64. The Jemena Dynamic Electric Vehicle Charging Trial also demonstrated that consumers are open to behaviour changes (within limits) to optimise charging to lower costs and increase the use of renewables. Bidirectional charging does not require any special behaviours beyond those demonstrated by participants in these trials such as plugging in the EV more regularly to take advantage of lower electricity prices and complementary incentives.

Stakeholders generally expected that in the early stages, bidirectional charging will mostly be used in conjunction with solar panels to ‘soak’ solar during the day and allow the user to use this during evening peak pricing hours. In Jemena’s Dynamic Electric Vehicle Charging Trial, participants with solar systems often aligned charging with solar generation and took advantage of ToU tariffs65 demonstrating behavioural change that will be needed for optimal bidirectional charging participation. An onboarding survey for this trial also revealed that 72%

61 Smart Charging Alignment for Europe (2023) Report on Consumer Behaviour

62 Battery Storage and Grid Integration Program and Realising Electric Vehicle-to-Grid Services (2021) Interim Social Report From the Realising Electric Vehicle-to-grid Services (REVS) trial

63 Yozwiak et al (2022) Clean and Just: Electric Vehicle Innovation to Accelerate More Equitable Early Adoption

64 AGL (2022). AGL Electric Vehicle Orchestration Trial

65 Jemena Electricity Networks (2023) Jemena Dynamic Electric Vehicle Charging Trial Project

of the participants had a solar system. The Origin Smart Charging Trial showed 71% of participants interested in smart charging already had a solar system66. Similarly, the Ausgrid NSW Electric Vehicle Owners Survey indicated that 60% of respondents owned a solar system, and 25% also owned a home battery, both significantly higher than the network average.67

Various studies have shown however that plug-in behaviour becomes more important with bidirectional charging as being plugged in more often increases the scope for automated charge/discharge operation, thereby increasing potential benefits 68 Plugging in more often will be a significant behaviour shift for some customers. In trials where participants were informed about the benefits of higher plug-in rates, they responded well and did exhibit higher plug-in rates than the general population.69 Similarly, the CrowdFlex Trial in the UK found that Ohme’s customers responded best to messaging focused on "getting paid," with non-fiscal messaging having a slightly lower effect. The trial saw overnight plug-ins increase from 30% to 45% and daytime plug-ins rise from 10% to 18%.70

Creating lasting behavioural change to increase EV plug-in rates appears achievable but will depend on perceived benefits (primarily financial), education, transparency of charging events, and ease of use through automation.

4.4. Addressing consumer concerns about bidirectional charging

While trial participants express interest in the financial and environmental benefits of bidirectional charging, several concerns might pose barriers to its widespread adoption. Among the most notable concerns are battery degradation and warranty issues, system complexity, loss of control, charge readiness, lack of clarity on financial rewards, and trust in service providers.

A list of consumer concerns raised in trials, academic research and consultations with relevant stakeholders for this project can be found below. These concerns are ordered roughly from the most prevalent and significant to the least. While the list is extensive, not all issues are significant enough to greatly impact the overall uptake of bidirectional charging technology across the population. Nonetheless, the concerns cover a broad spectrum, reflecting consumer uncertainties and challenges that need to be addressed to ensure the successful introduction of this technology.

Potential actual or perceived barriers to consumer adoption:

• Lack of bidirectional EV availability – Currently there are no bidirectional options available to Australian consumers other than V2L

• Battery degradation and warranty issues – Concerns that increased use could reduce battery lifespan and void the EV’s battery warranty

66 Origin Energy (2023) Origin Energy Smart Charging Trial Final Report

67 Ausgrid (2020) NSW Electric Vehicle Owners Survey

68 See for example Gschwendtner et al (2021) Vehicle-to-X (V2X) implementation: An overview of predominate trial configurations and technical, social and regulatory challenges

69 Cenex (2021) Project Sciurus Trial Insights: Findings from 300 Domestic V2G Units in 2020

70 National Energy System Operator (2024). CrowdFlex project successfully completes first phase of large-scale consumer trials | National Energy System Operator

• Return on investment – High initial costs for bidirectional charging infrastructure with unclear financial returns

• Loss of control and EV charge readiness – Concerns about losing control over when and how energy is discharged as well as the possibility the EV will not be ready to use when needed.

• Desire to avoid complexity – Difficulty in understanding and using bidirectional systems, including understanding how these systems will interact with electricity tariffs.

• Lack of energy literacy – A lack of understanding of how bidirectional EV charging products might work creates uncertainty about how to protect their personal interests, leading to hesitation and potential resistance.

• Trust in service providers – Mistrust of retailers or third parties managing the charging/discharging cycles and who’s interests are being served.

• Physical constraints – Barriers like a lack off-street parking and rental property constraints will impede uptake for some consumers.

• Interoperability and future proofing – Concerns over compatibility with products they already own or with future EV models, technologies, or energy systems, leading to potential costly upgrades or replacements.

• Data privacy – Concerns over how energy usage data will be managed or shared.

• Cybersecurity issues – Concern over the increased risk of cyber-attacks on the EV because of its increased network connectivity.

• Fire risk – Concerns about increased electrical fire risk.

• Grid service reluctance – Consumers may prefer not to engage as a ‘service provider’, and instead focus on satisfying their own needs

• Environmental impact – Uncertainty about the true environmental benefits of bidirectional charging

It is important to note that a key insight to take from the UK Sciurus trial is that it was able to alleviate most participants’ concerns regarding V2G technology. Overcoming these concerns meant that most participants reported that it was important to them that their next EV had V2G capability.

Several stakeholders suggested that an early focus on giving early adopters the smoothest possible introduction to this technology could result in them become product ambassadors –helping create a mainstream acceptance of this technology.

Key potential issues in consumer adoption that were raised by stakeholders were discussed further below.

Loss of control

The loss of control of charging and discharging is one of the top concerns that consumers have expressed in trials and studies This seems to break down into two main concerns:

• Firstly, that the benefits from control of the charging/discharging are not being passed on to the consumer (scepticism)

• Secondly, that the state of charge of the EV will not be appropriately managed so the EV can still be utilised for transport (charge readiness)

Stakeholders reported that they believed there is scepticism among many consumers that their interests will be upheld by retailers or a third parties managing their EV battery charge/discharge cycles. This distrust has been widely reported in international trials and studies. In the SCALE Project across Europe, it was reported ‘Trust in handing over control of charging varies, with original equipment manufacturers receiving the highest level of trust. However, many respondents prefer self-control and show low level of trust in third parties, posing a significant adoption barrier.’71 The Wattwatchers’ My Energy Marketplace (MEM) project looking at consumer engagement in energy data services noted Australian customers had a general mistrust of electricity retailers with participants suggesting they were sceptical about the information provided to them 72 This level of mistrust amongst consumers could pose a significant barrier to export enabled bidirectional charging if not addressed

There was also the concern that discharging of the EV battery by a third party could leave vehicles inadequately charged for transport. These concerns were identified as one of the major concerns for those considering bidirectional charging in the SCALE, EV-elocity and Project Sciurus trials 73 Interestingly, the participants of Project Sciurus reported significant anxiety about their EV’s state of charge at the start of the trial, but at the end of the trial, this was no longer a significant concern. The AGL Orchestration trial showed that participants were accepting of controlled charging if there was an opt-out option. The opt-out option was rarely utilised with around 1% of chargers opted out at a given time At the conclusion of this smart (unidirectional) charging trial participants generally found the impact of charging control events to be seamless and unobtrusive with 68% providing a positive rating for their experience. Only a small minority (4%) described the events as inconvenient and intrusive.74

These results suggests that consumers’ opinions on controlled charging/discharging are malleable with exposure to positive experiences.

Complexity and technology literacy

One of the most significant barriers to adopting bidirectional charging technology is the complexity involved. Consumers are required to be highly involved in multiple steps, from the installation process to ensuring that the system operates optimally. This level of involvement can be overwhelming for many people, and stakeholders generally agree that unless the technology becomes more user-friendly, it is unlikely to achieve widespread adoption. Most consumers expect transparent systems that require minimal effort to operate, and any technology failing to meet this expectation risks rejection.

Explaining the value of bidirectional charging, whether through financial savings or environmental benefits, will build motivation, but it will not necessarily offset concerns about

71 Smart Charging Alignment for Europe (2023) Report on Consumer Behaviour

72 Wattwatchers’ My Energy Marketplace (MEM) project (2020) Consumer Engagement in Energy Data Services: Recommendations Moving Forward

73 EV-elocity (2022) Project Final Report

74 AGL (2022) AGL Electric Vehicle Orchestration Trial

the complexity of the technology. A smooth customer journey, from product awareness through to installation and daily operation is vital.

While early adopters tend to be more comfortable with energy system discourse and complex technologies, the broader population may not be as prepared to navigate bidirectional systems. Some stakeholders argue that most consumers are not highly engaged with their energy usage currently, which could hinder their ability to engage with and achieve optimal benefits from bidirectional charging. On the other hand, some believe that ToU tariffs largely provide consumers with the cues they need to adjust their behaviour for both financial and environmental benefits. A well-designed system should automate many of the more complicated functions and offer intuitive, clear interfaces. For less-engaged users, providing simple, streamlined products, while also offering more advanced features for tech-savvy customers, can cater to different levels of technical ability and desire to be across the detail

The most important take-out is that consumers are diverse. It is expected that early bidirectional charging products will have some rough edges. Early adopters will be able to navigate these, and early market learning can pave the way for simpler, lower cost and more appealing products that are better candidates for achieving mainstream acceptance.

Trusted information

Stakeholders indicated that there is growing concern about the vast range of misinformation about this technology. This varies in scope and impact, ranging from over-inflated expectations to undue fear. On one end, stakeholders reported that some consumers believe bidirectional charging will deliver far more than the current technology is capable of, such as providing large-scale, uninterrupted backup power for homes or the grid over extended periods. These expectations may lead to disappointment when real-world applications of bidirectional charging fall short of these ambitious hopes

At the other end of the spectrum, stakeholder reported consumer concerns that the systems will be too risky for the average consumer to manage. Additionally, there are worries that bidirectional charging might be exploited by intermediaries To enable consumer willingness to adopt this technology, it will be crucial to address misconceptions with clear, accurate, and transparent information from an authoritative source.

Learning from consumers real-world market development

Several aspects of consumer behaviour still need to be understood to enable the widespread adoption of bidirectional charging. These include how consumers will integrate the technology into daily life, the level of incentives required to motivate participation, and how they will balance state of charge preferences with supporting the grid.

A key challenge is the ‘intention-behaviour gap’ where consumers express an intention to buy or use a technology but act differently in practice. While trials have provided insights into consumer intentions and behaviours, stakeholders generally agreed that further research is less necessary than real-world implementation experience. The focus should now be on creating market conditions that incentivise participation, alongside robust consumer protections in areas of potential concern.

Rolling out bidirectional charging in real-world settings will offer the data needed to refine products and back-end systems and better understand consumer behaviour. Early adopters should be drawn-in with clear and realistic benefits, while ongoing adjustments can be made based on actual user participation and evolving market dynamics. This process should be supported by continuous consumer education and feedback, ensuring products, information and regulation are able to adapt to real world experiences.

5. The economic value case for bidirectional charging

This chapter summarises local and international efforts to quantify the financial benefits of bidirectional charging. It finds bidi offers material consumer and economic benefits and that supporting a faster uptake of bidirectional charging is likely to be a no regrets activity. Estimates of individual consumer bill savings vary widely in the literature. The most current estimate is for average household savings of around $550 per annum. This can be enhanced were networks to offer more cost-reflective (dynamic) pricing.

5.1. Long term economic value

enX and Endgame Economics modelled the potential long-term value of V2G in the NEM under a range of scenarios. Results from this analysis are reported in a separate report that was provided to codesign workshop participants: National V2G Roadmap Market Modelling Report

The modelling assumptions were intended to strike a balance of potentially optimistic and conservative biases to produce credible results, with an overall conservative bias For example, in the most optimistic case, the rate of V2G uptake is less than half that already achieved for rooftop solar by Australian households to date. We also only modelled residential uptake and so other transport sectors may add significant upside benefits. Correcting for these conservative assumptions could more than double the estimated benefits.

The key findings of this analysis include:

• In a future high renewable penetration world, V2G can reduce firming needs from gridconnected generation and storage assets. This will provide a wholesale market benefit by reducing the associated investment and operation costs.

• The rate of V2G uptake has a large impact on the V2G benefit. The wholesale market benefit is between $0.7bn to $1.2bn in the slow uptake scenario and is between $1.7bn to $2.7bn in the fast uptake scenario.

• V2G operating according to market signals provide greater wholesale benefit than batteries with ToU tariff-responsive behaviour. This benefit could be further increased by enabling more daylight-hour charging

• V2G operation can also contribute to reduced distribution network costs by reducing local peak demand. We estimate the associated cost savings are between $0.6bn and $2.4bn with fast uptake and between $0.3bn and $1bn with slow uptake.

• A NEM-wide aggregate installation cost premium was calculated at $1.25 billion and $580 million for the fast uptake and slow uptake scenarios, respectively. This analysis produces a positive total system NPV across scenarios ranging from $2.96 billion to $740 million.

• In all scenarios, V2G produced positive net benefits.

In economic terms, this analysis indicates that supporting a faster uptake of bidirectional charging is likely to be a no regrets activity, and there is total net benefits pool of up to $2.96 billion that could be used to incentivise uptake (through electricity pricing or complementary incentives).

These results are directionally consistent with several international studies:

• EPRI (2019) found that potential grid service benefits in California translated to AUD $995 million to $1.51 billion in ratepayer benefits in the year 2030 assuming deployment of 3.3 and 5.0 million vehicles, respectively, with 50% of vehicles being V2G enabled.75

• Yang et al (2024) found that for China, V2G can substitute for 22.2% to 30.1% energy storage and accelerate the phase-out of coal-fired power. The value and emissions benefits of V2G was found to be corelated with the extent of renewable energy 76

• Fachrizal et al (2024) found that EVs had a high potential to provide flexibility to urban energy systems in Sweden They showed that a 2.4 GWh EV battery participating in a V2G scheme is comparable to 1.4 GWh stationary energy storage in improving urbanscale load balancing 77

• Türkoğlu et al (2024) used an EV charging model that considers both local network constraints and EV user preferences They found that active participation by V2G under a VPP arrangement presented material advantages for the power system and EV users simultaneously.78

Other international studies have produced less universally positive results:

• Yao et al (2022) showed that by 2030, the implementation of unidirectional smart charging and bidirectional V2G in China could reduce the total cost of power system by 2.02% and 2.08%, reduce the annual carbon emissions of the power system by 2.27% and 2.95%. Due to the assumed high cost of battery degradation and the current power mix dominated by coal-fired generation, additional benefits of implementing bidirectional V2G over unidirectional V2G were limited.79

• Heilmann & Friedl (2021) found that the studies undertaken between 2010 and 2018 on the economic benefits of V2G showed inconsistent and contradictory results. Increased bidirectional charging capabilities (power transfer and efficiency) were found to significantly improve the economic benefits even when taking battery degradation into account.80

• Zhang et al (2024) found that the value of V2G in different regions of Japan is primarily determined by the number of EVs in operation. They suggest that regions with lower V2G potential should explore alternative energy storage technologies, such as stationary batteries or hydroelectric storage, to complement V2G systems.81

75 EPRI (2019) Open Standards-Based Vehicle-to-Grid: Value Assessment (Converted to AUD 14/10/2024)

76 Yang et al (2024) A new model for comprehensively evaluating the economic and environmental effects of vehicle-to-grid(V2G) towards carbon neutrality

77 Fachrizal et al (2024) Urban-scale energy matching optimization with smart EV charging and V2G in a netzero energy city powered by wind and solar energy

78 Türkoğlu et al (2024) Maximizing EV profit and grid stability through Virtual Power Plant considering V2G

79 Yao et al (2022) Economic and climate benefits of vehicle-to-grid for low-carbon transitions of power systems: A case study of China's 2030 renewable energy target

80 Heilmann & Friedl (2021) Factors influencing the economic success of grid-to-vehicle and vehicle-to-grid applications A review and meta-analysis

81 Zhang et al (2024) Feasibility of vehicle-to-grid (V2G) implementation in Japan: A regional analysis of the electricity supply and demand adjustment market

5.2. Near-term customer value

International studies

Several US studies in recent years have assessed the avoided system costs of bidirectional charging. VGIC plans to publish a Value of VGI Literature Review around the end of 2024, which assesses over 80 studies on the topic. One standout study demonstrates that utilitydispatched V2G could yield from AUD $500 to $2,187 per light-duty vehicle per year in grid services benefit in California, depending on the scenario.82

Recent modelling for Germany puts the 2030 per-vehicle savings of bidirectional charging in the range of AUD $503-4,531 pa. compared to $454 –680 for smart charging 83 Other studies using 2019 energy market data have found an added value of bidirectional charging compared to uncontrolled charging of AUD $324-$2110 pa. (without considering network costs). A much lower return on spot markets (only $81) is assumed for Norway for that year compared to $1,136 for Ireland.84 The Octopus Energy V2G tariff addon promises zero charging costs (when meeting certain availability and yearly mileage requirements). This is also the vision of The Mobility House, enpal and 1komma5.

European results show the high relevance of the volatility of energy markets at that time. Since 2022, the fossil gas-related energy price crisis in Europe has led to wider spreads which can be expected to reinforce the benefits of flexible bidirectional charging into the future.

The consumer value case in Australia

It is difficult to cross-compare value estimates in different markets and between different studies due to different assumptions and differences in transitory market conditions between the study periods. The value proposition in Australia also varies by region and timeframe.

Modelling undertaken by enX in 2023 found that V2G was likely to be preferable to unidirectional smart charging for a significant proportion of users in all NEM jurisdictions. These differences were heavily influenced by different network tariff arrangements that reinforce or dampen energy spot market or retail tariff arbitrage behaviours. At the upper end, the average of total net benefits of V2G compared to smart charging ranged from between $1,560 to over $6000 in NSW and SA (NPV) 85

The study also found that V2G customers are nearly always better off on a dynamic pricing. Smart charging customers may be better off on dynamic pricing depending on their household energy usage patterns and local network tariff arrangements. The strongest benefits for V2G were in areas with simple bidirectional network support tariff arrangements (e.g., under the Ausgrid (NSW) and SAPN (SA) trial tariff arrangements). In NSW and Qld,

82 EPRI (2019) Open Standards-Based Vehicle-to-Grid: Value Assessment (Converted to AUD 14/10/2024)

83 Vollmuth et al (2024) Prospects of electric vehicle V2G multi-use: Profitability and GHG emissions for use case combinations of smart and bidirectional charging today and 2030 (converted to AUD 14/10/2024)

84 Kern et al (2020) Integrating Bidirectionally Chargeable Electric Vehicles into the Electricity Markets

85 enX (2023) Opportunities and Challenges for Bidirectional Charging in Australia p.14 Note that the Ausgrid bidirectional network support tariff used in the modelling is no longer available.

charging a V2G-enabled EV could generate a negative net cost (i.e., it can make you money even after factoring in you transport energy consumption).

enX subsequently applied a range of technoeconomic and powerflow modelling methods to assess the impact of alternative network and retail tariff structures on V2G operation within the Ausgrid network 86 This work concluded that (without accounting for capital outlays) V2G was cost-beneficial to smart charging for all customers under all modelled scenarios with average savings per household of $550 per annum. Importantly, customer bills came down with dynamic pricing and spot market exposure. Customers on dynamic network prices could receive a net payment of network variable costs (even after paying for transport energy consumption). One customer was even able to power their home, charge their EV and earn net revenue of $95 in a year

While smart charging is itself financially beneficial for many drivers, V2G contributed additional savings of between $118 and $960 across the users and incentive arrangement explored in this study. Most scenarios produced a simple payback on upfront costs of under 7 years (assuming relatively high cost DC charging hardware). Under spot passthrough arrangements, this dropped to under 4 years. The fastest paybacks were for customers on spot passthrough contracts with dynamic network pricing. A key conclusion in this study was that dynamic network and energy tariffs are most beneficial to both the network and customers. Importantly, customer revenues reflect the system value of the service the EV owner is providing, rather than a cross subsidy from other users.

As discussed under Frequency response (p.38) several hundred dollars may also be available through the provision of fast frequency response services. Unmonetised benefits are also associated with having an alternative or backup power supply

Unfortunately, the households who stand to gain from V2G in the early years are likely to be the same customers who can access other technologies like solar and household batteries: those in standalone, owner-occupied dwellings. While future commercial, regulatory and technical innovation may allow apartment dwellers and renters to benefit, in the early years social equity can be best supported by ensuring network pricing remains ‘cost-reflective’ such that some net benefit of V2G operation always spill over to other electricity customers.

Australia’s consumer-value advantage

Overall local and international stakeholders noted a range of factors which would contribute to Australia having a moderate to high value case for residential bidirectional EV charging:

• The availability of dynamic retail pricing products

• The trend toward time-varying network tariffs (including bidirectional and dynamic network support tariffs) and perceived broad-based consumer acceptance of timevarying tariffs

• The availability of flexible export limits that allow customer to access greater export capacity (kW) during peak pricing periods

• The positive predisposition of Australian customers to other embedded generation technologies such solar and battery systems

• The prevalence of at-home off-street parking which is considered a precondition for residential bidirectional charging

6. Potential roadmap directions

This chapter recommends a range of action that can be progressed to support the achievement of the Market Objective while ensuring alignment with consumers’ long-term interests. As presented in Figure 8, these initiatives are grouped into 5 categories including a foundational national policy commitment. Discussion of these initiatives is provided on the following pages.

Figure 8 – Action areas (A-E) that could unlock consumer choice and benefit the broader community.

This Background Paper canvasses stakeholder perspective under these categories (below) Specific recommendations in these action areas are set out in the National Roadmap for Bidirectional EV Charging.

6.1. National policy commitment

There is likely to be a delay between bidirectional products being released in comparable markets overseas, such as Europe and the US, and them being available for Australian consumers.

Despite our relatively small market size, international OEMs see Australia as a prospective market for bidirectional products and services With national policy leadership and consistent support from state and territory governments, there was a strong view among stakeholders in interviews and reiterated through the codesign workshop that Australia could bring forward bidirectional charging product availability delivering material benefits for Australian consumers and accelerating and supporting our transition to renewables. This can contribute to:

• Greater consumer choice and control over their energy use

• Reduced power system transition costs, reflected in lower energy bills for all customers

• Enabling reduced electricity sector emissions

• An accelerated uptake of EVs to reduce transport sector emissions by greatly reducing their total cost of ownership.

This leadership should take the form of:

• A strong national policy narrative that signals a clear alignment of bidirectional charging proliferation with Australia’s national interest

• Implementation of concrete actions to advance this interest.

These actions should seek to achieve:

• More EV and EVSE OEMs supplying bidirectional charging products to the Australian market, enabling greater choice for consumers

• Customers being able to receive fair value from their bidirectional charging investments

• Accelerated uptake to achieve targeted economic, environmental and consumer welfare benefits

• Rapid consumer and industry learning to support continued product innovation and costs reductions.

Support by Australian governments for this roadmap initiative is already signalling to supply chain stakeholders, that we may consider proactive measures to facilitate bidirectional charging uptake. This is viewed admirably by international EV industry stakeholders and has laid the groundwork for future positive engagement.

For residential customers, policy measures should focus on market enablement rather than trials Almost all local and international stakeholders considered that the time for early-stage residential trials was over, and that Australia should focus on catalysing at-scale residential bidirectional charging products and services. Funding for trials in not on the critical path to the Market Objective but can be beneficial in secondary use-case applications and in more challenging transport sector contexts such as public charging, commercial fleets and heavy

vehicles At the codesign workshop stakeholders noted that there may be the need for realworld, on-the-ground pilot programs to help kick-start the market or areas where research is needed to complement roll-out of bidirectional charging with a focus on implementation rather than proof of concept.

Building on the initiatives identified through this roadmapping process, a national bidirectional EV charging strategy, endorsed by Australian energy and climate change ministers, is considered an important building block to systematically addressing barriers to Australians achieving the full benefits of bidirectional EV charging products and services.

New Vehicle Efficiency Standard credits

Australia’s New Vehicle Efficiency Standard (NVES) provides a potential lever through which the Australian Government could promote greater availability of bidirectional EV charging capability. NVES works by setting an average CO2 target for all new vehicles covered (currently most vehicles under 4.5 tonnes) and the target is lowered overtime. Suppliers that beat the target are able to sell ‘credits’ to suppliers that are in shortfall and this helps reduce the relative cost of low emissions vehicles and encourages greater supplies 87

Several stakeholders raised the idea that the NVES could offer ‘super credits’ for vehicles that offer a minimum level of bidirectional charging capability (specifically, V2G) reflecting the scope 2 emissions savings that will result from bidirectional charge operation.

This approach, while involving legislation change and some political complexity, would deliver a firm response in terms of EV industry commitment While some stakeholders considered that this may be the lowest cost and most efficient means of ensuring the Market Objective is achieved, others noted risks associated with achieving broad-based industry support for the enabling legislation given that it will result in competitive advantage for automakers that are more advanced with bidirectional capabilities Stakeholders at the codesign workshop were generally supportive of this approach providing the flow-on effects were well considered.

Leveraging local leadership and innovation

National policy settings can capitalise on strong appeal of bidirectional charging among informed consumers while educating industry and the broader community of the value bidirectional charging offers Australia in our energy transition. It can highlight an additional utility and cost-saving advantage of EVs over internal combustion engine (ICE) vehicles, thereby supporting the transition to e-mobility. Policy support for bidirectional charging would recognise that ‘early adopters’ have a critical role to play in re-risking and reducing the costs of products for other consumer cohorts.

Policy settings can also leverage Australian industry and consumers’ experience in rooftop solar, and our flexible energy market frameworks that promote innovation in CER services This experience has resulted in homegrown digital innovations in CER and grid management, such as HEMS and VPPs, that have demonstrated export potential.

87 Department of Infrastructure (2024) Information for Industry

Addressing jurisdictional fragmentation

A key focus for national policy coordination should be to address the perception (and partial reality) that Australia’s network connection policies and smart-grid integration architectures are jurisdictionally fragmented (e.g. CSIP-AUS implementations and EVSE controlled load requirements in Qld). This is resulting in some international suppliers opting for a ‘wait and see’ approach rather than more actively developing products for our market. A bidirectional charging strategy would build on initiatives already committed to by energy Ministers under the national CER Roadmap, by recognising jurisdictional fragmentation as a further challenge to overcome 88 The need to have national consistency was a key theme that emerged from the codesign workshop, with all stakeholders supportive of a more concerted effort this this end

6.2. Ensuring fair value transfer to consumers

Bidirectional EV charging was universally viewed by automakers as a major advantage of EVs over ICE vehicles. All automakers expect that it will become ubiquitous in the long-term providing another reason for customers to switch to EVs This advantage rests on the ability of consumers to access fair value from their bidirectional charging investments, especially for V2G, and this will vary by end market.

Properly valuing flexibility

Australia already has a reasonably competitive proposition for consumer value realisation based on our world-beating levels of rooftop solar and reforms over the past decade that have allowed customers to access more cost-reflective pricing for network and retail electricity. Like BESS, V2G is highly flexible and operates most effectively in response to ToU or dynamic tariffs.

The transition to dynamic consumer electricity tariffs should be a focus for electricity pricing reform in Australia, as it is in the US and Europe currently. In the US, several publicly owned utilities are already offering ‘dynamic rates’ to reduce critical peak demand. The EU has advised member states to ensure that ‘dynamic tariffs’ are available to all customers to address grid congestion.

A focus on dynamic tariffs reflects:

• CER owners should be able to access the full value of the flexibility services they can offer

• There is a need, over the coming decade, to efficiently manage expected growth in distribution network peak demand associated with the electrification of cooking, heating and the transition to EVs in many parts of the grid

• ToU tariffs, while important for driving long-run consumer behaviour change, are not capable of reflecting the full value of automated CER such as bidirectional EV charging

• V2G is not well suited to daily cycling against ToU tariffs due to customer concerns around battery degradation.

The most efficient operation for V2G (including where it is export limited) involves discharging when, and only when it is contributing to network and energy market cost savings. This means

88 See ECCMC (2024) National CER Roadmap p.9

concentrating incentives at these times, thereby delivering the greatest benefit at the lowest cost for customers and the Australian economy.

For customers with highly flexible CER, making dynamic tariffs more widely available can contribute to national productivity. All stakeholders who raised this issue considered that dynamic tariffs should be available to all electricity customers and only on an opt-in basis. While several stakeholders did not believe many consumers would opt-in, most considered that, subject to appropriate consumer protections such as minimum interoperability standards, technology can manage dynamic price risks and deliver substantial benefits for consumers

Market catalyst incentives

DC bidirectional charging has the fastest potential path to market in Australia, but it will also face higher upfront costs until scale production and deployment is achieved. High upfront costs present a barrier to uptake other than for the most hardened enthusiasts. Early adopters will also be required to navigate significant complexity, uncertainty and potential scepticism about product benefits. The cost and effort they perceive in engaging in bidirectional charging will be weighed against the expected financial and other benefits. This contributes to a chicken and egg dilemma where our market may not be able to efficiently scale to a point where bidirectional charging products are simple, accessible and cost-effective for mainstream consumers.

It was generally agreed by stakeholders that a scheme of broad-based installation rebates would be the most effective way of getting product commitments by vehicle OEMs in our market and bring forward cost reduction and product maturation through scale production/deployment and greater competition.

If struck at the right level, financial incentives to promote uptake do not reflect a cross-subsidy to the owners of bidirectional EVs. This is an area that needs to be carefully navigated so as not to exacerbate real and perceived economic disadvantage, especially where some cohorts, such as renters and apartment dwellers, are unlikely to be able to access this technology for some time.

Most stakeholders, including consumer representative groups, acknowledged that it was reasonable for consumers that were most easily able to deploy bidirectional charging, to lead the first wave of adoption. However, at the codesign workshop stakeholders expressed strong views that this should be accompanied by sustained action by government to address barriers to EV charging by apartment dwellers, renters and low-income households.

Many stakeholders considered that bidirectional charging can be cost-effective in many situations without the need for subsidies (although some expressed the need to consider access for by those on low incomes in the longer term) It was agreed at the codesign workshop that the primary goal of any installation rebates would be to fix the attention of global automakers and other supply chain stakeholders on the Australian market, bringing forward the availability of bidirectional charging and its associated benefits.

To ensure a material impact of automaker decisions, stakeholder considered that rebates should target in the order of 50,000 to 100,000 customers with rebates at around $3,000 per installation, over a fixed period of approximately 3 years from announcement to completion It

was generally agreed that a scheme of broad-based installation rebates would contribute to materially faster product commitments by automakers and EVSE OEMs in our market. Stakeholders considered that any rebate scheme should be retrospective to the time of policy announcement so as not to create perverse incentives to delay market commitments. Any rebate program should also have a clear cap based on number of supported installations or available funding.

It was agreed at the codesign workshop that any market catalyst incentives should reflect the broader social benefits bidirectional charging can deliver. Tariff design and product rebates should be designed to ensure that they produce ‘public good spillovers’ for the broader community. These spill-over benefits potentially include:

• Reduced emissions

• Power system cost savings

• Improved power system resilience

• Accelerated learning that contributes to reduced costs and improved experiences for future customers

6.3. Maturing our smart grid and grid protection frameworks

Australia is at the global forefront of integrating CER into our power systems Australians have adopted rooftop solar at world-leading rates meaning that AEMO and DNSPs have had to move ahead of the world in ensuring effective controls are in place to preserve power systems security outcomes 89

Establishing clarity of direction

While stakeholders generally recognised that grid management measures to-date have been justified, they have been developed largely in an ad-hoc manner and in the absence of an overarching strategy for how this will all come together in consumers’ interests. Australia lacks an institutional framework to consider the integration of market operation and distribution network operation and energy industry policy, and there is no easy way for international stakeholders to readily discern our current requirements, objectives or directional of travel.

This is a challenge to Australia’s interest in bidirectional charging given our relatively small market size and our reliance on international product supply chains. An absence of transparency and clarity about our requirements is directly contributing to a significant portion of international suppliers adopting a ‘wait and see’ approach before enabling V2G products for the Australian market.

This barrier can be in part addressed by:

• More clearly communicating the building blocks of our smart grid and CER market integration at a national level (noting existing jurisdictional differences in approach and timing)

89 Examples of world-leading smart grid initiatives include Flexible export and solar backstop mechanisms, DER Register requirements and the disturbance ride-through requirements of AS/NZ 4777.2:2020.

• Articulating a future state CER Integration Architecture Objective to provide greater clarity to consumers, local industry and international supply chain stakeholders of our directional of travel and likely high-level functional requirements

• Governments committing to the institutional arrangements required to refine and implementing this vision over time.

In reality, many of the key building blocks for the technical integration of CER are already planned or in place. This includes our globally unique adaption of IEEE 2030.5 for emergency backstop and dynamic operating envelopes for managing flexible export and import limits. This, combined with the requirements of AS/NZ 4777.2, provide the foundations for a scalable smart grid architecture framework from which product requirements can be derived. Further interoperability standards requirements specific to EVs (such as ISO 15118 and OCPP) are explored in section 6.4 of this paper (p.63)

Recent updates to AS/NZ 4777.2 enable national certification of AC & DC bidirectional charging products providing a basis for national consistency and a streamlined product homologation process for vehicle and EVSE OEMs. A promise of national consistency offers a comparable advantage over EU and US markets which suffer from highly fragmented arrangements. However, it must be remembered many of the ‘fragments’ of comparable economies are larger than Australia in terms of addressable market size.

Promoting national consistency

Key inconsistencies exist between Australian network businesses both in terminology, current practices and future direction (as expressed in the scope of various pilots and trials). Queensland and South Australia were most frequently called out for having unique requirements for EVSE controlled load and interoperability (e.g. reliance on DRED control) While in some cases, jurisdictional differences can be regarded as ‘innovations’, in other cases they are regarded, on a first-principles basis, as inefficient and unsuitable to be scaled for national market coverage.

A central issue is that greater coordination and national consistency in technical requirements and smart grid management approaches, is not valued in current technical and economic regulatory frameworks for DNSPs. This may require legislative reform to achieve, and stakeholders generally expressed low levels of this achieving national alignment under business-as-usual and without explicit government leadership

Various projects are underway to harmonise network connection agreements and service and installation rules. The CER Roadmap also identifies Nationally consistent standards, including for V2G and National regulatory framework for CER to set and enforce standards as priority reform areas.90 The CER Roadmap does not clearly link these initiatives to the need to provide greater clarity and confidence to international supply chains, and the benefits this offers to consumers in the form of greater access to products that offer more choice and control over their electricity costs

90 ECMC (2024) National CER Roadmap p.16

6.4. Achieving interoperability with standards

Closely linked to the need to provide clarity on Australia’s emerging smart grid and grid connection frameworks is the reported need to establish clear direction on interoperability requirement across e-mobility ecosystems.

In the context of consumer energy, interoperability refers to the ability of different energy systems, devices, and applications to seamlessly communicate and work together. For bidirectional charging, this can include a wide range of devices including solar & BESS inverters, EVs, EVSEs, HEMs and cloud services, all of which may need to work together to achieve a compliant and effective outcome for the consumer.

Stakeholder routinely called up minimum interoperability standards as a foundation for streamlining product development and market homologation processes and ensuring baseline protections for consumers as they engage with new products and services.

Case study 6 – An early adopter experience

In 2021, Francis began an ambitious journey to integrate bidirectional charging into his home energy system. Equipped with a 13kW solar array, two Fronius inverters, a Tesla Powerwall, and a Nissan LEAF, Francis aimed to further cut his energy costs. A Wallbox Quasar 1 bidirectional charger was installed with a special grid code exemption he had to arrange with his network provider, Essential Energy. While all the required hardware was in place, he quickly encountered significant software integration issues

Francis signed up to a dynamic electricity tariff with Amber Electric which allowed him to export power from the LEAF to take advantage of electricity market price spikes. Once the charger was installed however, he found the charger required him to monitor energy prices and discharge the car manually an impractical, time-intensive process. Further, in early May 2024, during a wholesale market price spike, he set the car to discharge only to find the Powerwall started charging from what it thought was cheap solar electricity. He only made $19 from that price spike. When on May 8, two units at Eraring went offline and the wholesale price peaked at over $16/kWh - he was prepared. In two and a half hours he earned $564 while supporting the NSW grid. Total earnings for May were $800.65.

Amber Electric put their engineers onto the case and provided a custom software solution for Francis’ setup. With both the Powerwall and Wallbox under Amber control, vehicle charging and discharging is basically optimised against wholesale prices and the LEAF always has the charge he needs to get where he needs to go. However, Francis still experiences occasional bugs and glitches and there is still a way go before the solutions are suited for mainstream adoption.

E-mobility interoperability standards

Following years of innovation and some standards divergence, e-mobility interoperability standards are undergoing a process of exnovation and convergence91. This includes convergence on:

• ISO 15118-20 for EV<>EVSE communications

91 Exnovation refers to the deliberate process of phasing out outdated or less efficient technologies, practices, or standards to make way for newer, more effective ones.

• OCPP 2.0.1 (IEC 6358492) for remote EVSE communications

Both standards are required to support interoperable bidirectional EV charging. In the case of OCPP, this is via the extension OCPP 2.1 which uses 2.0.1 as a base. In the case of ISO 15119-20, this currently supports DC bidirectional charging use cases, with specifications for AC usecases to be fully specified in the next few years.

There was almost universal agreement among stakeholders that Australian consumers would benefit from the Australian government establishing a clear market direction on minimum interoperability requirements for EVSE, based on these standards, noting that a transitional period will be required to ensure we maintain adequate equipment supplies.

Setting minimum standards ensures that EV charging infrastructure remains up-to-date, cyber-secure, and capable of supporting advanced features (like bidirectional charging) when and where consumers chose to embrace them Various stakeholders suggested this could also be applied to ensure that public charging infrastructure is software-capable of supporting relevant bidirectional charging use cases in the future.

Some early EV bidirectional product releases are likely to rely on legacy and proprietary protocols (e.g. custom ISO 15118-2 and -20 extensions or OEM APIs). Most stakeholders considered this should be allowed to facilitate early market development and to reduce product complexity for customers before the technology matures. However, there was strong and widespread concern that a reliance of proprietary protocols could lock customers into ongoing products and service offerings if it persists beyond a few years Some stakeholders noted that customers will not generally be in position to make informed choices in this area, and this is regarded first as a consumer protection issue.

Local access standards

Australia’s emerging smart grid architectures have material interoperability standards implications that need to be addressed specifically for our market. Specifically, dynamic operating envelopes and emergency backstop schemes are intended to be implemented at a customer-site level which means that customers with multiple export capable devices such as solar, batteries and bidirectional EVs will need have these devices orchestrated to comply with site level constraints.

Australian CER service providers (such as HEMS and VPP operators) are currently wrestling with this requirement, with some more advanced than others. Universally however, they are constrained by a lack of standardised ways to interface with the wide range of inverters and EVSE and other flexible load devices that need to be managed to achieve optimal customer outcomes. This is especially pronounced where multiple devices need to be orchestrated to comply with site-level constrains during a loss of communications (such as during a network outage or where a customer Wi-Fi password is changed).

Several stakeholders pointed to the need for minimum local interface and communication standards to ensure CER can be orchestrated locally. Bidirectional charging will expose and exacerbate current local interface limitations as it will trigger a new network connection

92 On October 20th, the IEC published the approval of OCPP 2.0.1 as an IEC International Standard (IEC 63584) See OCA (2024) OCPP Achieves International Standard Status

approval process that may incorporate solar backstop and dynamic operating envelope requirements. In many cases this will result in customers facing additional (inefficient) costs and complexity or punitive export limits which will provide a barrier to uptake or diminish the value of their investments.

Non-discriminatory access standards

There were different views among stakeholders as to whether automakers should be required to offer enabled bidirectional charging features for third party control. A few stakeholders considered it reasonable that automakers ‘own’ the ongoing service offering with customers consent. Most however considered it preferable (and/or inevitable) that automakers and EVSE OEMs be required to facilitate reasonable third-party control. This direction is also explored in the work of the National Centre for Charging Infrastructure in Germany.93

Support for EV and EVSE product homologation

Various stakeholders noted that additional policy and funding support processes for local market homologation would provide a clear view of Australian market needs to solution vendors, most of whom are based outside Australia. This would help attract vendors to the Australian market ultimately benefiting Australian consumers with greater choice and lower prices.

Homologation support could apply to:

• Allocating funding to support EV and EVE OEMs homologate products for the Australian market

• Establishing a formal test scope for international test labs for certification testing against shared and unique national and jurisdictional requirements (e.g. AS/NZ 4777.2. AS 4755, CSIP-AUS, Energy Queensland EVSE connection requirements, OCPP etc.)

• Supporting informal industry events such as ‘testivals’ where local and international technology developers and supply chain stakeholders come together to test end-toend interoperability within Australia’s unique smart grid architectures and BTM energy system contexts.

International engagement

Various international stakeholders suggested that Australia could be better represented in international fora focussed on vehicle-grid integration. Where there is representation, this is generally by individuals with private interests or that do not have direct connections with Australian regulatory or standards bodies. It is noted that Australia has recently increased its engagement with IEEE to support the coevolution of CSIP-AUS and IEEE 2030.5, and this is expected to support:

• Australian use-cases being effectively represented in forthcoming versions of IEEE 2030.5, and

• Australia being able to benefit from IEEE expertise as in input into ongoing CSIP-AUS development 94

Several requests were made for the Australian Government, through various formal multilateral energy fora, to more fully support international standards processes to ensure standards to develop in-line with our domestic needs. This includes grid codes (e.g. via ANSI and IEC) and EV/EVSE interoperability (e.g. via ISO, IEC, CharIN, the Open Charge Alliance and IEA Task 53).

Of note is that Australia is not represented on the IEA Implementing Agreement on Hybrid and Electric Vehicles Technology Collaboration Programme (HEV TCP) HEV TCP recently initiated Task 53: Interoperability of Bidirectional Charging (INBID). This task aims to test the conformance of the upcoming ISO 15118-2X amendments related to bidirectional charging. It has two main objectives:

1. Ensure interoperability between EVSE and EV, and

2. Ensure interoperability between EVSE and distribution grids 95

Several stakeholders highlighted benefits of Australia joining Task 53 considering our globally unique grid integration frameworks that will apply to bidirectional charging.

6.5. Supporting consumers

Stakeholders overwhelmingly considered there was strong potential for mainstream Australian consumers to engage with, and benefit from, bidirectional EV charging products and services. There was broad agreement that financial returns and climate action are likely to be the most resonant and enduring reasons for customers to invest and that consumers would need to be supported by effective and trusted information, including through sales channels.

Strengthening consumer engagement with consistent sources of information

Many of the stakeholders we consulted will play a direct role in educating consumers, influencing purchase decisions and helping them navigate the onboarding process for bidirectional charging products and services. Ensuring these channels, particularly CER installers, energy retailers and EV retailers (including dealership and agency models), are equipped with consistent, high-quality information about bidirectional charging will facilitate smoother sales and onboarding processes and help build consumer confidence.

Stakeholders regularly spoke of a role for government in building consumer awareness and literacy around the benefits of bidirectional charging and its potential role in the energy transition. This would provide a foundation of understanding and a common knowledgebase for industry and for consumers engaging in this area, on which trustable product messaging can be developed.

It was often clear in consultations that many stakeholders operated in silos and lacked knowledge of the broader ecosystem. Government could assist this process by supporting an

94 This engagement has been led by the Distributed Energy Resources Integration API Technical Working Group, chaired by the Australian National University

95 IEA Task 53 (2024) Interoperability of Bidirectional Charging

industry-led forum to allow for ongoing collaboration and knowledge sharing among all bidirectional charging researchers and stakeholders, ensuring that information and training resources are consistently updated and available across industries, while identifying and addressing education gaps for consumers and across supply chains. Without such a forum, it is likely that competitive market tensions and interests will result in more inconsistent and fragmented messaging that can erode consumer confidence and engagement with bidirectional charging

This forum could include representatives from OEMs, utility companies, installers, car retailers, advocacy groups and relevant regulatory bodies. It could oversee the development of standardised training materials designed for front-line sales staff and information for endconsumer audiences ensuring they reflect the latest technological advances, regulatory requirements, and market conditions. Regular information sharing could also ensure industrywide consistency, and that consumers receive clear and cross-comparable information across all touchpoints. A starting point for forum discussions could be the consumer concerns outlined in section 4.4 (p.46). Implementing customer journey mapping can also help stakeholders better understand the various stages that consumers go through when considering and adopting bidirectional charging. Mapping out the journey from initial awareness to everyday usage can help identify key moments where consumers may need additional support or information, such as during the research phase, installation, or their first use of the technology. This tool will also enable stakeholders to pinpoint friction points, streamline the onboarding process, and optimise communication strategies to address common concerns, such as battery degradation, cost-benefit analysis, and energy management.

Significant journey mapping has already been undertaken in the context of EV ownership in Australia96 and there may be benefit updating this in the context of bidirectional charging.

Communication strategies to increase Australian energy literacy levels and increase awareness of bidirectional charging

Australia’s electricity transition is making flexible CER more valuable, but this value is often paid for in the form of additional complexity for consumers. To effectively navigate decisionmaking processes, consumers who chose to engage need to be aware of how new technologies and services align with their values and interests and they need to see a pathway through (or around) complexity to an outcome that is advantageous, accounting for all costs and benefits.

Boosting CER technology literacy in Australia was frequently noted as a strategy to empower consumers to make informed decisions about choices they can make now and into the future. In stakeholder interviews, many stakeholders held the view that there was already a lot of reliable information materials about bidi available. However, in the codesign workshop, some stakeholders believed that communication would be better received if delivered through a government funded central source such as a dedicated website. Another potentially effective communication tool could be an online decision-support tools that demonstrate the real-

96 E.g. Energex (2021) Electric Vehicle Customer Experience Journey Mapping, ESB (2023) Customer Insights Collaboration (p.21)

world financial advantages of using bidirectional charging under different tariff arrangements and for different types of drivers

Financial incentives to help consumers utilise bidirectional charging

Stakeholders noted that government incentives, such as installation rebates for charger installation, would lower the financial barrier to adoption (particularly for lower income consumers), but would also help build trust in the technology among all consumers. Government support would signal that this technology is considered reliable, safe, and beneficial for both individual users and the broader energy system.

Supporting owners of bidirectional-capable vehicles that cannot access EVSE

It is estimated that within a few years there could be tens of thousands of Nissan LEAFs and Mitsubishi Outlander PHEV customers in Australia who will not be able to access bidirectional EVSE that supports CHAdeMO and meet Australian grid codes, simply due to issues with prior AS/NZ 4777.2 drafting. Stakeholders have mixed views on how many of these EVs were purchased with the intention of utilising their bidirectional capabilities and cannot access this due to governance failures outside of the owners’, or the automakers’ control.

While the issues with this standard are now rectified, this constitutes a legacy of poor consumer and industry experience, and a wasted resource in Australia’s energy transition. Some stakeholders believed that there is an opportunity for Government and industry collaboration to rectify this situation by supporting a suitable EVSE vendor to enter the market to service this consumer cohort97 ,

97 Other markets such as the US, EU and Japan have CHAdeMO EVSE that have met their local grid code requirements. Recent updates to AS/NZ 4777.2 may provide a pathway for homologation of these EVSE in Australia.

Appendix A – List of major bidirectional charging trials

The following provides a select summary of major bidirectional charging trials. The below projects do not list all bidirectional trials globally (which number over 150 to date).

2001 - AC Propulsion (US) - One of the earliest V2G experiments, conducted using vehicles converted by AC Propulsion, demonstrated that electric vehicles could supply power back to the grid. A range of experiments were conducted, including using EVs to provide regulation frequency response services. Cost-benefit metrics were established for flexible trading initiatives which proved V2G to be a promising addition to the Californian power system. These foundational projects helped prove the feasibility of V2G and influenced future developments in both EV and V2G technologies.

2011 - Nuvve's UCSD V2G Trial (US) - Nuvve Corporation collaborated with the University of California, San Diego to conduct one of the first commercial V2G trials. The project focused on using fleets of electric vehicles to balance grid demand during peak periods by discharging stored energy into the grid.

2016-2018 - Parker Project (DK) - The Parker Project, led by Nissan, Enel, and other partners in Denmark, focused on proving the technical viability of V2G systems and how they could integrate into different energy and energy services (e.g., frequency response) markets. It tested V2G using Nissan LEAFs and developed regulatory frameworks to allow for V2G participation in grid services.

2018-2021 e4Future (UK) - Funded through the UK government’s V2G competition and supported by partners such as Nissan, E.ON Drive, and Imperial College London, the project focused on using V2G technology to aggregate EV fleets to provide energy services to the grid, such as network services, frequency response, load balancing during peak demand periods.

2018-2021 – Project Sciurus (UK) - Project Sciurus, a large domestic V2G trials led by OVO Energy, with technical input from Indra, Kaluza, Nissan, and support from government agencies showcased the potential of V2G technology to optimize energy usage by providing arbitrage The trial provided 320 Nissan Leaf owners with V2G chargers developed by Indra, allowing EV owners to charge when electricity prices were low and sell it back to the grid during periods of high demand for profit which helped reduce the participants' energy costs. On average, some participants earned up to £725 annually, effectively making their driving "free" in terms of energy costs.

2018-2020 – V2Street (UK) - The V2Street projected aimed to address the challenge of urban residents without off-street parking who cannot install home EV chargers. By developing a novel consumer value proposition, V2Street leverages Vehicle-to-Grid (V2G) technology to provide support services to the energy system. The project explores the use of lamppost chargers to enable on-street charging. Additionally, it seeks to create viable business models to make these services attractive to various user groups.

2019-2021 - Powerloop: Domestic V2G Demonstrator Project (UK) – This project was completed in partnership with Octopus Electric Vehicles, UK Power Networks, and the Energy Saving Trust. Supported by Innovate UK, the trial aimed to demonstrate how V2G technology could be used to provide energy services to the grid while offering financial benefits to EV

owners. Powerloop involved the installation of V2G chargers in participants’ homes, allowing them to charge their EVs during off-peak hours and discharge energy back to the grid when demand was high. Backup services were also demonstrated. The trial tested how V2G could help balance the grid, reduce energy costs for EV owners, and support the integration of renewable energy.

2020-2023 - The Realising Electric Vehicle-to-Grid Services trial (REVS) (AU) – This project involved the integration of V2G-capable electric vehicles into government and commercial fleets across the Australian Capital Territory. The trial, backed by ARENA, included partnerships between key industry players such as ActewAGL, the Australian National University, and the ACT Government. REVS focused on testing how electric vehicles can provide grid stability services including frequency response. The project aims to showcase the financial and operational benefits of V2G, helping to reduce grid strain, lower energy costs, and contribute to Australia’s transition to a renewable energy future.

2020-2024 - V2Build (UK) - Explored the economic and technical potential of Vehicle-toBuilding (V2B) technology. Led by ERM and supported by partners such as Wallbox and UK Power Networks, the project focuses on using bidirectional chargers to allow electric vehicles (EVs) to both charge from and supply energy to commercial buildings.

2022-2025 – Smart Charging Alignment for Europe (SCALE) (NO, NL, FR, GER, HU, SE) - The SCALE project is funded by the Horizon Europe Programme. Its goal is to advance smart charging infrastructure and facilitate the large-scale deployment of EVs across Europe.

SCALE focuses on developing and testing V2X solutions, including V2G, to improve energy efficiency and integrate renewable energy into the grid. By enabling smart, bidirectional charging, the project aims to reduce the need for grid reinforcement, enhance energy flexibility, and support Europe’s transition to a low-carbon economy. SCALE includes real-life demonstrations in various European cities, such as Oslo, Rotterdam, and Munich, to validate these technologies and ensure interoperability

2018-2022 - EV-elocity (UK) - The EV-elocity project aimed to demonstrate and advance V2G technology. Funded by Innovate UK, the Department for Business, Energy and Industrial Strategy (BEIS), and the Office for Zero Emission Vehicles (OZEV), the project tested V2G in real-world settings, partnering with local councils, universities, and other organisations to gather technical, customer, and commercial insights.

By enabling electric vehicles to both charge from and supply energy back to the grid, the project explored how V2G could reduce carbon emissions, lower energy costs, and even improve EV battery life through controlled charging and discharging.

Appendix B –

List of vehicles with known bidirectional charging capabilities

Platform

CLAR BMW i3 DC Third party test

https://lnkd.in/gKB-XegK

CLAR BMW i4 DC Third party test https://lnkd.in/gKB-XegK

CMF-EV Alpine A290 Electric AC Announced

CMF-EV Mitsubishi Outlander DC Trial

CMF-EV Nissan eNV-200 DC Yes

CMF-EV Nissan Leaf DC In-market

CMF-EV Renault 5 E-Tech AC Announced

E-GMP Hyundai Ioniq 5 AC Trial

E-GMP Kia EV9 AC Yes

EMP2 Citroen Jumpy DC Third party test

Ford T3 Ford F-150 Lighting DC Yes

Honda e Honda E DC Trial

J1 Porsche Taycan DC OEM test

https://ev-database.org/car/2269/Alpine-A290-Electric-220-hp

https://www.drive.com.au/news/mitsubishi-v2g-power-plug-inhybrids-adelaide/

https://v2g.co.uk/2018/01/the-40-kwh-nissan-e-nv200-the-lcvmarket-game-changer/

https://ev-database.org/car/1317/Lucid-Air-Touring

https://ev-database.org/car/2135/Renault-5-E-Tech-52kWh-150hp

https://electrek.co/2022/04/22/hyundai-and-we-drive-solar-deployioniq-5s-with-v2g-tech-in-the-netherlands-to-create-the-worldsfirst-bi-directional-city/

https://ev-database.org/car/1834/Kia-EV9-998-kWh-RWD

https://lnkd.in/gjYH3PfX

https://thedriven.io/2022/03/15/ford-f-150-lightning-to-test-v2g-incalifornia-to-boost-grid-reliability/

https://sun2wheel.com/en/honda/

https://zecar.com/reviews/porsche-tests-bidirectional-charging-onthe-taycan

LEAP Lucid Air DC, AC Announced https://ev-database.org/car/1316/Lucid-Air-Grand-Touring

MEB Audi Q4 e-tron DC Announced

MEB Cupra Born DC Third Party test

https://ev-database.org/car/2013/Audi-Q4-e-tron-45

https://wallbox.com/en_us/newsroom/wallbox-announces-its-latestbidirectional-ev-charger-quasar-2-has-confirmed-compatibilitywith-cupra-born-77kwh.html

MEB Skoda Enyaq DC Announced https://ev-database.org/car/2024/Skoda-Enyaq-Coupe-85

MEB Volkswagen ID. Buzz DC Announced

MEB Volkswagen ID.3

https://ev-database.org/car/1651/Volkswagen-ID-Buzz-Pro

DC Announced https://ev-database.org/car/2210/Volkswagen-ID3-Pro-S

MEB Volkswagen ID.4 DC Announced https://ev-database.org/car/2028/Volkswagen-ID4-Pro

MEB Volkswagen ID.5

MEB Volkswagen ID.7

DC Announced https://ev-database.org/car/2152/Volkswagen-ID3-GTX

DC Announced

Skateboard Rivian R1 DC Announced

Skateboard Rivian R2

DC Announced

SPA2 Polestar 3 DC, AC Announced

SPA2 Volvo EX30 DC Third party test

SPA2 Volvo EX90 DC, AC Announced

Ultium GM Chevrolet EV DC Yes

Ultium GM GMC Sierra EV Denali DC Announced

Ultium GM Cadillac LYRIQ DC Yes

Various Tesla Cybertruck DC Yes

https://ev-database.org/car/2119/Volkswagen-ID7-Tourer-Pro-S

https://electrek.co/2024/03/08/rivian-ceo-rj-scaringe-interviewhidden-r1-bidirectional-charging-r2-nacs-mind-bending-r3-buildtimeline-more/

https://electrek.co/2024/03/08/rivian-ceo-rj-scaringe-interviewhidden-r1-bidirectional-charging-r2-nacs-mind-bending-r3-buildtimeline-more/

https://ev-database.org/car/2229/Polestar-3-Long-Range-Singlemotor

https://lnkd.in/gRJSX6Ds

https://ev-database.org/car/1775/Volvo-EX90-Twin-Motor

https://gmenergy.gm.com/for-home/products/vehicle-to-homesolutions

https://gmenergy.gm.com/for-home/products/vehicle-to-homesolutions

https://gmenergy.gm.com/for-home/products/vehicle-to-homesolutions

https://www.tesla-mag.com/cybertruck-une-nouvellefonctionnalite-powershare-inaugure-le-v2g/

Various Tesla Model 3 DC Third party test https://lnkd.in/gKNuMeAj

Various Tesla Model Y DC Third party test https://lnkd.in/gcJgmPy7

* Not all model variants may be bidirectional

Appendix C – European Market summary

Current state of the market

Initial products (hardware and tariffs) have been announced but are not yet available on a large scale. For example, in the UK, energy supplier Octopus Energy is offering a V2G tariff addon in combination with a CHAdeMO wallbox, and in France, Renault is partnering with The Mobility House to offer a combination of energy tariff, service and (AC) bi-directional wallbox using the newer 15118-20 standard. Other carmakers such as Volkswagen, Volvo/Polestar, Hyundai/Kia and BMW have also announced collaborations with hardware and/or energy partners in selected markets, but these have yet to be scaled up beyond these controlled environments. With no new CHAdeMO-based vehicles entering the market, this technology is disappearing. The European standard Type 2 plug (for AC) and CCS2 (for DC) have been the standard connection on new EVs for several years.

At the European level, bidirectional charging/V2G has been identified as a potentially important technology in the Alternative Fuels Infrastructure Regulation (AFIR)98 and other directives and regulations. From the AFIR, member states (governments, together with their system operators) are required to analyse the potential of V2G in their areas. Specifically, Article 15(3) and (4) of AFIR apply to both public and private recharging points and require undertaking specific assessments related to bi-directional recharging by June 2024 and every three years thereafter, on the potential contribution of bidirectional charging to reducing user and system costs and increasing the renewable electricity share in the electricity system (Article 15(4))

TSOs, such as National grid ESO in the UK, consider V2X charging as an important building block in their Future Energy Scenarios. At European level, TSO and DSO organisations are involved in updating network codes to include V2G. Several TSOs and DSOs in European countries such as Germany, France, the Netherlands and Sweden are actively involved in applied trials of bi-directional charging technology.

Commercial readiness of different bidirectional charging use-cases

Figure 9 – Estimated Commercial Readiness Level of bidirectional charging against the various use cases in Europe

Residential

A key area of focus in the announced bi-directional charging offers in the residential segment is load balancing behind the meter, e.g. to optimise solar self-consumption (retail arbitrage) and stay within subscribed capacity limits at the grid connection point, in addition to dynamic optimisation for spot markets. This is usually optimised for day-ahead and intraday market positioning but can also serve to help a supplier optimise its portfolio. Users usually do not see this translated 1-to-1 into energy costs/revenues, but into static, predictable rates.

In markets like France, Italy and Spain, consumers subscribe to a certain capacity, whereas in other markets – depending on the DSO – like Sweden, Belgium and Norway, consumers may be subject to monthly peak capacity (demand charges). On-site energy management with bidirectional charging technology in combination with a HEMS is marketed as a solution in both use cases, like how current unidirectional smart charging solutions in these markets already work.

Business fleets

In France, EDF and Nuvve's joint venture, DREEV, is currently focusing on bidirectional charging of corporate fleets. While the process is underway to transition from CHAdeMO to CCS vehicles and chargers, CCS deployments not yet beyond the concept stage. Official support for bidirectional charging on commercial vehicles is limited to the Volkswagen ID.Buzz Cargo for which charging hardware is not yet commercially offered. The large overlap in EV technology between passenger cars and vans is likely to enable bidirectional charging simultaneously for both vehicle segments.

Rental fleets

The largest applications in numbers of vehicles and hands-on application of bidirectional charging are with carsharing fleets. The longest-running project is We Drive Solar in the Netherlands (City of Utrecht), which has been experimenting with AC bi-directional charging in public spaces, among other locations, in 2022. After initial trials with adapted vehicles from Renault, it is now working with adapted vehicles from Hyundai. With the national car sharing fleet provider, MyWheels, cooperation is underway to deploy the vehicle fleet bidirectionally in more charging locations in the future.

In Switzerland, a large-scale trial for V2G took place with a fleet of 50 Honda-e vehicles from Swiss car share provider Mobility. Here, an aggregator optimised the (dis)charging of the vehicle fleet for both local grid conditions and the national energy market balancing.

Public charging

Although the We Drive Solar project includes the installation of bidirectional charging infrastructure in public places, and several Dutch municipalities and charging station operators claim that their public (AC on-street) charging infrastructure is ready for bidirectional charging, there is no movement in practice yet due to a lack of vehicles as well as services/tariffs available to consumers.

Heavy vehicles

Bidirectional charging of heavy duty vehicles is still an under-explored topic, largely due to MCS not being completely finalised enough to have tangible market proliferation (high-power charging solutions are only recently emergent). The technical standards (CCS and MCS) support the use case of bi-directional charging. For trucks, there are announcements of pilot projects such as SPIRIT-E involving heavy vehicle manufacturers. All heavy vehicle manufacturers (Volvo Trucks, MAN, Scania, Daimler) have set up separate business units to help their customers set up charging infrastructure and energy management, where bidirectional charging would be a logical, but not yet available, application.

Retail energy arbitrage (including solar self-consumption)

Solar self-consumption is an important consumer motivation for bi-directional charging, as recent research among German consumers shows. 28% of surveyed installers reporting that they are approached about bidirectional charging for every second installation request.99 The first V2G tariffs/services launched (or rather announced) by carmakers Volkswagen, BMW and Volvo also explicitly target this use case. This partly involves an ecosystem with a connected solar inverter, DC wallbox, HEMS and, in some cases, a home battery.

Wholesale energy (spot market) arbitrage

The first commercial V2G tariff available in Europe is Octopus Energy's Power Pack in the UK. This tariff add-on works with dynamic prices for consumption, but not for export yet

The announced V2G tariff by The Mobility House in cooperation with Renault in France, and at a later stage in Germany and the UK, will involve static prices for the consumer. In the background, however, optimisation takes place on various spot markets (day ahead, intraday). BMW has indicated that wholesale arbitrage is a second phase to be introduced (in combination with a dynamic energy contract) in its announced bidirectional charging bundle for 2025/2026 with energy supplier Eon. In markets where dynamic energy contracts (wholesale spot market passthrough) have been around for longer, such as Norway, Sweden, Denmark and to a lesser extent the Netherlands, consumer batteries are active in day-ahead and intraday markets, with arbitrage being a key use case (alongside solar self-consumption). This could easily extend to bi-directional EV charging.

In Germany, dynamic energy tariffs are now slowly being introduced ahead of mandatory requirements for all major suppliers being introduced from 2025. In France, there appears to be less of an appetite for dynamic tariff offerings.

99 EUPD (2024) Bidirectional charging: perspectives and challenges for prosumers, installers and legislation

Local network support

Volvo & Polestar's bi-directional charging trials in Sweden are also looking at interaction with the local grid through the involvement of distribution system operators who already have experience with distributed flexibility through a local flexibility marketplace.100 101

V2X Suisse's rental fleet charging has also been co-optimised with local grid conditions as dynamic input. A stated goal of We Drive Solar is to contribute to solving local grid congestion.102

Beyond these pilots, the pathway for broader-scale local grid support services is not immediately obvious. In Germany, Redispatch 3.0 is exploring potential Controllable Local Systems (CLS) interface for real-time coordination and information exchange across voltage levels will be demonstrated within this project, as well as open HEMS interoperability standards.103 In the UK, EV participation in local flexibility markets via third party aggregators is more common.

Frequency management

While many early trials of bidirectional charging, such as the Parker Project in Denmark, had frequency management as an important component, this seems to be less in the foreground for the now upcoming commercial trials. Qualification of decentralised, small units to provide frequency services is not straightforward (e.g. metering, time availability) and the growth of stationary battery storage has also changed the market. In the coming years, two-way charging seems to focus less on providing these services in residential applications.

An interesting example of high-value (if limited-application) EV-provided frequency response was recently demonstrated by Fiat Chrysler Automotive delivering 25MW of fast reserve frequency response services from their V2G plant working in conjunction with Terna (TSO) and ENGIE EPS through a combination of pre-delivery vehicles at plant and second-life EV batteries working as an aggregated asset (the project runs from 2023 to 2027).104

Local load balancing (for constraint management)

Constraint management, with bidirectional power flows from one vehicle enabling the use of other equipment/charging of other vehicles, seems to be the focus, particularly for corporate fleets. In the private sector, the focus is more on staying within building capacity limits, not necessarily with bidirectional power flows.

For the German and Swiss markets, the ability to respond to a temporary capacity restriction set by the DSO is also a feature, supported either by the bidirectional charger or by a

100 Lindholmen Science Park (2024) Results show great potential for balancing power grid with electric car batteries

101 Polestar (2023) Polestar supports the future of EV-supported power grids

102 Utrecht University (2021) World’s first integrated study into a city-wide, future-proof and flexible electricity system

103 NOW GmbH (2024) Enabling non-discriminatory bidirectional charging, p.11

104 Stellantis (2020) FCA and ENGIE EPS: Italian technology combining the power grid with sustainable mobility through V2G

connected HEMS. For Sweden and Norway, communication with a HEMS to stay below certain capacity limits (linked to demand charges) is also considered a necessary feature.

The economics of bidirectional charging

Older studies (2018 - 2020) from the UK calculated per-vehicle annual savings, compared to unmanaged charging in the £200-400 pa. range. High plug-in ratios and local grid bottlenecks (supporting market-based flexibility services) resulting in higher returns.105 106

For Germany, using 2019 energy market data, an added value of bidirectional charging compared to uncontrolled charging of €200-1300 pa. is assumed (without considering network costs). A much lower return on spot markets (only €50) is assumed for Norway for that year compared to €700 for Ireland.107

More recent modelling for Germany puts the 2030 per-vehicle savings of bidirectional charging in the range of €310-2,780 pa. compared to €280 –530 for smart charging 108

More recently, the Octopus Energy V2G tariff addon promises zero charging costs (when meeting certain availability and yearly mileage requirements). This is also the stated vision of The Mobility House, enpal and 1komma5.

This shows the high relevance of the geographical spread and volatility of energy markets that was assumed at that time Since then, the fossil gas-related energy price crisis in Europe in 2022 has led to wider spreads which can be expected to reinforce the benefits of flexible bidirectional charging

Expected timeframes for new products and services

The Octopus Energy V2G tariff is already available in the UK. The tariff option guarantees zero charging costs, provided the user connects for a minimum number of hours per year, and allows the operator to control the charging (with user override via an app). It is available for customers with a Nissan Leaf, Nissan e-NV200 or Mitsubishi Outlander PHEV (i.e. it is CHAdeMO-based)

Within Europe, automakers prioritise home markets for new feature releases (e.g. Volkswagen in Germany, Ranaut in France) as they have more influence on regulation, and/or shorter lines with research and development, and relatively larger car markets.

The launch of the Renault 5 with AC bi-directional charging capability in France is imminent. For Germany and Britain, introduction is planned for 2025.

105 Cenex (2021) The commercial viability of V2G, Cenex (2019) Understanding the true value if V2G

106 Based on (optimistic) V2G uptake assumptions set in 2018, V2G was associated with potential savings of around £200 million in deferred network expenditure by 2030. Source: Skoufa & Abrahams (2018) Long term estimates of V2G opportunities p.59

107 Kern et al (2020) Integrating Bidirectionally Chargeable Electric Vehicles into the Electricity Markets

108 Vollmuth et al (2024) Prospects of electric vehicle V2G multi-use: Profitability and GHG emissions for use case combinations of smart and bidirectional charging today and 2030

Volvo/Polestar and Hyundai/Kia seem to be also targeting 2025 launches with AC and/or DC chargers, depending on local market partners. For Volkswagen, DC charging looks set to be offered in 2025, with BMW targeting 2026. These are initial product offerings, with approved hardware and service/tariff to accompany the EV, for specific markets.

By 2027/2028, interoperable EV and bidirectional charging solutions are expected to be more widely available, meaning that new EVs will be able to work with any available bidirectional charger on the market and vice versa, moving away from an early market phase where only approved combinations of vehicles, charging hardware and flexibility operators are certified to work.109

Consumer appetite and engagement V2G products and services

Research to date indicates that consumers are positive about bidirectional charging and strong latent consumer demand. One of the largest consumer trials of V2G was Powerloop in the UK where 87% of participants reported that they would recommend it. The main concerns were in technical problems in the charger and/or the app which could be resolved in future market offerings. 110

A recent survey shows that 68 % of Europeans are positive towards the idea of a V2G-capable car 111

Among German households with PV, the bidirectional charging capability was reported as a decisive factor in the decision to purchase or recommend an EV or charging stations. One of the main reasons not recommending an EV or a charging station was the absence of bidirectional charging capability. The potential to optimise solar self-consumption was perceived as a key benefit. As mentioned above, 28% of installers reported that they are queried on bidirectional charging with every or every second installation request.112

Key regulatory or policies issues and initiatives

The issue of double taxation and/or double network fees is a hot topic in Europe. This relates the fact that taxes and/or network charges are applied on energy imports and exports eroding the earnings available from energy market arbitrage. Exceptions for stationary battery storage on energy tax and levies, as well as network fees, often do not apply to mobile batteries. The European Commission has requested Member States introduce methods to apply energy taxation only to final consumption.113

While dynamic energy retail tariffs are becoming more available across European markets, direct market access for CER (including for the provision of local flexibility / ancillary services) is considered low. Barriers to market participation include limited smart meter uptake (a problem in Germany) and minimum bid size or individual unit size requirement for the provision of flexibility services. New European energy legislation introduces device-level

109 NOW GmbH (2024) Enabling non-discriminatory bidirectional charging p.6

110 Energy Savings Trust (2023) Powerloop V2G Trial - Customer insights and best practice guide

111 European Alternative Fuels Observatory (2023) Consumer Monitor 2023 – Aggregated Report

112 EUPD (2024) Bidirectional charging: perspectives and challenges for prosumers, installers and legislation

113 European Commission (2021) Revision of the Energy Taxation Directive

measurements for participation in demand-response in the absence of, or in parallel to, smart meters to ease the inclusion of CER in flexibility programs.114

At country and EU level, accelerated by the 2022 energy price crisis, there is an intensified focus on enabling the exploitation of decentralised flexibility and the potential of bidirectional charging (especially V2G). Operationalisation of this intent is still in many cases still pending, but it is expected governments will try to address many of the current barriers in the next few years. Of particular note is the Germany-led initiative to resolve technical and regulatory barriers to V2G through a co-creating process with a wide group of European stakeholders from the energy and mobility sectors. Outcomes/recommendations from this are expected by the end of 2024, targeting areas such as standardised data exchange across relevant technical standards, market communication (including metering and settlement of flexibility) as well as recommendations on market access, network fees and taxation.

A new European Network Code on Demand Response is also under consultation that would contribute to more uniform access arrangements for new charging products and services. Automakers are directly involved as stakeholders in this process to make V2G standardised possible in Europe. It is likely that the outcome of these network codes can be expected in the period after 2025.115

Interoperability between vehicles, chargers and home or build energy management systems is also a key consideration. Interoperability is a particular consideration in Germany. These efforts focus on interoperable, non-discriminatory operation of any EV with any bidirectional charger by using the ISO 15118-20 standard and resolving outstanding compatibility issues, such as through transatlantic collaboration

In Germany, the EEBUS in-home energy standard has gained traction with widespread support by equipment and smart meter manufacturers (in Germany, control signals relevant to energy market operations, both from DSOs as well as other market participants, will have to pass through the secure smart meter gateway). However, outside Germany this standard is getting less attention, especially with energy suppliers emerging as the main operators of residential flexibility on behalf of consumers.

In September 2024, the European Commission issued guidance to Member States to abstain from adopting national standards or technical specifications and use instead the existing European standards to enable a smooth European market of bidirectional charging. In particular, it references ISO 15118-20 and notes the mandatory implementation of this standard will be the subject of upcoming secondary legislation under Regulation (EU) 2023/1804. The Commission further stated that when Member States deploy bidirectional charging, EVs and recharging stations hardware should rely on ISO 15118-20. The Commission also advises that Member States should ensure that dynamic price contracts are available to final customers and ensure that distributed energy resources (such as car batteries) can participate in balancing services, notably for grid congestion management 116

114 European Parliament (2024) Regulations (EU) 2019/942 and (EU) 2019/943, Article 7b

115 ACER (2024) Public consultation on the draft network code on demand response

116 European Commission (2024) Guidance on Article 20a on sector integration of renewable electricity of Directive (EU) 2018/2001

It is also considered likely that future interoperability mandates will extend to and OCCP 2.0.1 after its admission into the IEC realm as standard 63584 117

Many European countries are expected to expand existing EV charging infrastructure support – either directly with subsidies, or through tax rebates - to bidirectional charging equipment once more products arrive onto the market. Belgium currently has a tax deduction for bidirectional charging equipment118, but the only qualifying equipment is currently the marketdeprecated CHAdeMO standard (Wallbox Quasar 1).

117 OCA (2014) OCPP on fast track to an IEC International Standard 118 ACEA (2024) Tax benefits and incentives

Appendix D – US Market summary

Current state of the market

While the bidirectional charging is widely recognised as having significant potential in the US, the market for products and services is relatively nascent.119

Several commercially available systems are focused on providing V2H (islanded emergency backup power) for light-duty EV customers living in single-family homes (e.g., Ford F-150 Lightning, Tesla Cybertruck, Kia EV9, and Chevrolet Silverado EV/Equinox EV/Blazer EV/Cadillac LYRIQ120). However, total installation costs remain high.121

Meanwhile, commercially available systems leveraging electric school buses are being deployed for grid-parallel operation at increasingly larger sites in California (e.g., Oakland Unified School District122, Cajon Valley Union School District123) and states in the northeast (e.g., Beverly, Massachusetts124). These projects generate revenue in exchange for providing system net peak load reduction.125 However, the high cost of electric school buses and the associated infrastructure (with or without bidirectional capability) and technical implementation challenges leading to high transaction costs per project have hampered more significant scale-up of these types of installations.

Lastly, several well-funded pilots are just beginning for other use cases, including residential grid-parallel exporting bidirectional charging (e.g., PG&E’s V2X Pilot Program126, Baltimore Gas and Electric & Sunrun’s V2H/VPP127, and California Energy Commission REDWDS awards), nonelectric school bus medium/heavy-duty exporting bidirectional charging (e.g., agricultural tractors),128 and light-duty fleets in commercial and industrial customer sites (e.g., Nissan LEAF + Fermata129). Across the market, one persistent barrier is the limited availability of bidirectional charging equipment certified to UL 1741 Supplement B (SB).130 While more manufacturers anticipate receiving this certification from Nationally Recognized Testing Laboratories (NRTLs), it remains a bottleneck for the industry.

119 Smart Electric Power Alliance (2023) The State of Bidirectional Charging in 2023

120 Ford Home Backup Power, Tesla Powershare, Wallbox EV9 x Wallbox Quasar 2, GM Energy Tap Into an Amazing Source of Backup Power

121 PG&E (2023) Vehicle-to-Grid System Integration Focus p.7

122 St John (2024) The country’s biggest electric school-bus fleet will also feed the grid

123 The Electric School Bus Initiative (2023): Powering the Grid with Cajon Valley Union School District

124 Highland Electric Fleets (2022) Supporting Local Grid with Vehicle-to-Grid Technology

125 E.g., California utilities’ Emergency Load Reduction Program or New England utilities’ Connected Solutions program

126 PG&E V2X pilot program

127 Walton (2024) Sunrun, BGE launch first US electric vehicle-to-home virtual power plant

128 CEC Responsive, Easy Charging Products with Dynamic Signals (REDWDS), see also Results Table

129 Letendre (2024) Interconnection Opportunities and Obstacles for V2H and V2G p.60–70.

130 CEC Vehicle-to-Grid Equipment List

Commercial readiness of different bidirectional charging use-cases

Figure 10: Estimated Commercial Readiness Level of bidirectional charging against the various use cases in the US

Islanded emergency backup power is an intuitive value proposition for customers who are informed of its value. This is reflected in the early market offerings by Ford, Kia and Tesla and others.

PG&E’s V2X Pilot directs over $7 million toward implementing >1,000 residential customers leveraging dynamic retail pricing for light-duty bidirectional charging equipment.131 Notably, this effort will waive the UL 1741 SB certification requirement which otherwise represents a significant barrier to widespread deployment. This will be the first relatively large-scale test of retail arbitrage, local network support (a dynamic marginal distribution capacity price signal is built in132), and general load balancing.

Meanwhile, the CEC has awarded $20 million to 10 companies to support developing and deploying solutions capable of responding to dynamic price signals, including at least three companies focused on bidirectional charging.133 The $20 million awards can expand to $208 million in a later Phase 2, pending future state budget decisions. In short, these residential use cases – retail arbitrage, local network support, and load balancing – sit at a CRL precipice between 2 and 3, with many utilities, state and federal agencies, and industry stakeholders eagerly awaiting positive results from the next 12-18 months of these initial large-scale pilots.

Business fleets

PG&E’s V2X Pilots also direct $2.7 million to support commercial fleets, including light-duty and medium/heavy-duty business fleets.134 75% of this funding has already been used to support bidirectional school buses in PG&E’s service territory.135 The scale and scope opportunity is roughly equivalent to the Residential case noted above, albeit with some key differences.

131 PG&E (2022) Resolution E-5192

132 PG&E (2024) Resolution E-5326

133 CEC (2023) GFO-22-609

134 PG&E (2022) Resolution E-5192

135 PG&E V2X pilot program

Currently, the Nissan LEAF is approved for use with Fermata’s FE-20 charger, the only lightduty vehicle/charger pairing that does not currently cater to islanded home backup power.136 Instead, this equipment allows for business fleets to engage in retail arbitrage, network support, and load balancing. Fermata has publicly pointed to several such projects.137 Some of these examples are carshare fleets discussed below in Rental fleets. Notably, the Fermata/Nissan pairing leverages the CHAdeMO connector and communications standard. CHAdeMO is presently more market-ready for bidirectional charging operations than the newer ISO 15118-20 standard. However, federal, state, and utility funding requirements steer industry stakeholders towards CCS, which, in turn, changes the state of play for business fleet use cases in the U.S., given the limited availability of equipment tailored to these use cases. In short, business fleets can be expected to have roughly the same CRI as residential use cases. However, the product availability, while arguably more “plug and play” today, is relatively small due to the few available hardware options.

Rental fleets

US car rental agencies currently appear uninterested in bidirectional charging. However, to the extent that carshare fleets can be categorized as rental fleets, it is reasonable to assess them as an opportunity for bidirectional charging nearly comparable to the above Business fleets use case. Fermata Energy leads bidirectional charging operations for carshare in the northeast, where low-income customers and disadvantaged communities can access mobility solutions at a more reasonable cost.138 Several federal and state agencies prioritize low-income customers and disadvantaged communities, so funding is expected to be more widely available for these projects, especially when partnered with community-based organizations.

Public charging

US public charge point operators currently appear uninterested in bidirectional charging.

Heavy vehicles

Heavy-duty vehicles offer an exciting and intuitive bidirectional charging opportunity, especially electric school buses as they have predictable duty cycles that support availability during system net peak load hours. Increased funding for the buses and associated equipment is being deployed at progressively larger sites with more frequency.

The latest example is Oakland Unified School District’s 74-bus depot.139 These buses will participate in retail arbitrage, local network support, and load balancing through the same dynamic rate design as PG&E’s V2X Pilots. Additionally, the buses will participate in the Emergency Load Reduction Program (ELRP). This out-of-market demand response program guarantees at least 30 hours of dispatch per summer, compensated at $2/kWh. Compensation with the dynamic rate will be netted to ensure customers are not double paid for the same kWh contribution.

136 Nissan (2024) Nissan approves enhanced Fermata Energy bidirectional charger

137 Letendre (2024) Interconnection Opportunities and Obstacles for V2H and V2G p.60–70.

138 Ibid, Colorado Careshare (2024) EV Carshare, Affordable Housing & Bi-directional Charging

139 St. John (2024) The country’s biggest electric school-bus fleet will also feed the grid

Bidirectional electric school bus developments are underway across the country, although not all projects are publicly reported. Most sites outside of California will likely be initially limited to supporting load balancing to reduce system net peak load, as other revenue opportunities have not yet been established by utilities and grid operators.

Additional heavy vehicle sites are also rumoured to be in development, including agricultural equipment and refuse trucks in the US and, in Canada, seasonal tour buses and marine vessels. In sum, heavy vehicles, namely electric school buses, offer significant commercial opportunities for stakeholders, although key barriers remain to achieving greater scale, as detailed below.

Retail energy arbitrage (including solar self-consumption)

This service is emerging as a relatively attractive offering to site developers and equipment manufacturers, as it does not require updates to wholesale market participation models. Today’s implementation relies on either event-based programs, market-informed retail pricing (e.g., PG&E’s V2X Pilots’ dynamic pricing rate140), or other real-time-equivalent pricing.141

School bus sites participating in California’s Emergency Load Reduction Program142 (e.g., Cajon Valley Union School District143, Oakland Unified School District144) and National Grid’s ConnectedSolutions145 program (Beverly Public Schools, Massachusetts146) are compensated through net peak load reductions achieved through emergency demand response. With relatively high static prices for dispatch, clear total dispatch hours and dispatch windows, minimal integration requirements with utility systems, no penalties for non-performance, and exemptions from UL 1741 SB certification requirements for bidirectional chargers, these eventbased utility programs are compelling for the bidirectional charging market’s first movers. Additional event-based programs with similar streamlined designs have and will continue to emerge, including CEC’s Demand Side Grid Support: Option 3, which may further stimulate investment in this service by offering capacity payments.147

Note that “net energy metering” tariffs across the U.S. do not apply to bidirectional charging since the authorising statutes require exports be clean/renewable generation, and EV charging cannot reasonably be expected to be exclusively accomplished with clean/renewable generation. However, there are pending proposals to allow for large-scale retail energy arbitrage through bidirectional charging equipment, including in California (Southern

140 PG&E Resolution E-5326

141 Driscoll (2023). New Hampshire utility offers dynamic rates for distributed storage exports

142 CPUC, Emergency Load Reduction Program

143 The Electric School Bus Initiative (2023): Powering the Grid with Cajon Valley Union School District

144 St John (2024) The country’s biggest electric school-bus fleet will also feed the grid

145 National Grid US, ConnectedSolutions

146 Highland Electric Fleets (2022) Highland Electric Fleets Coordinates Electric School Buses' Summer JobSupporting Local Grid with Vehicle-to-Grid Technology

147 CEC (2024) Demand Side Grid Support (DSGS) Program Guidelines, Third Edition p 22-27

California Edison (SCE) Vehicle-to-Grid Resource Proposal (VGRP)148), Michigan149, and Maryland (DRIVE Act150).

Wholesale energy (spot market) arbitrage

This service is slow to emerge, although we may see projects in Maryland and/or New York be the first to participate in wholesale energy arbitrage.

The Federal Energy Regulatory Commission (FERC) issued Order 2222 in 2020 directing wholesale market operators to facilitate the participation of DERs directly in wholesale markets. While the U.S.’ ISO/RTOs are at differing levels of compliance, those that are compliant have seen little to no wholesale market participation from DERs. This is because several crucial barriers remain.

First, the jurisdictional friction across FERC-regulated ISO/RTO tariffs and state-regulated utilities delays tariff revisions for each entity. Second, energy storage connected to the distribution grid is charged retail rates for energy taken from the grid (to charge a battery, for instance). However, these DERs are only compensated at wholesale prices when they export back to the grid. This mismatch makes creating viable business cases for DERs participating in wholesale markets difficult. They face retail costs for charging but can’t fully recover those costs through wholesale revenues alone.

Third, wholesale market participation requires more technical, legal, and administrative costs, including for bid optimization, complying with telemetry requirements, and managing data. Bidirectional charging aggregators may find these costs overly burdensome at this early stage of market development.

Addressing these barriers will likely be a low priority for industry advocates, customer groups, and other stakeholders while other viable compensation mechanisms are available. In other words, if there are retail programs that can sufficiently support bidirectional charging project economics, it may not be worth the time and resources required to address each of these wholesale market participation barriers, and the additional barriers for ISO/RTOs that are not yet compliant with FERC Order 2222.

Local network support

Industry progress in local network support services is closely linked to dynamic rate implementation. While dynamic pricing pilots in California incorporate a distribution pricing signal, the exact rate design methodology is still being experimented with, with PG&E’s

148 SCE (2024) Phase 2 of 2025 General Rate Case. Amended Rate Design Proposals p.120-131.

149 MPSC (2024).Vehicle to Grid (V2G) and Energy Storage System Tariff Discussions

150 Martucci (2024) Bidirectional EV charging, VPP bill passes Maryland Assembly

upcoming implementation to leverage a “scarcity price curve” and a “circuit clustering” approach.

151

Frequency management

While several academic studies and consultant exercises have modelled compelling revenue generated by bidirectional charging equipment for this use case,152 current implementation efforts appear disinterested in frequency regulation and other ancillary services opportunities. This is likely due to three sets of barriers.

First, the frequency management opportunity is limited to wholesale market products, and the above-noted wholesale market participation barriers apply to all wholesale market products. Of the five US ISOs, most have allowed aggregated DER participation in frequency response schemes only in the last two years (CAISO from 2016, ERCOT from 2018).

Second, the revenue opportunity for frequency response service delivery may wane as DER and large-scale BESS penetration increases. Frequency response markets are considered shallow and easily saturated, particularly with respect to some US ISOs operating relatively highly synchronous power systems (particularly the US Eastern Interconnection).

Lastly and with respect to frequency regulation services, the battery cycling behaviour required for frequency regulation likely exceeds the battery cycling behaviour currently approved/warrantied by automotive OEMs, i.e., for islanded backup power (e.g., GM, Kia, Tesla) or retail arbitrage, local network support, and local load balancing services (e.g., Ford, BYD, Nissan, BlueBird153).

Local load balancing (for constraint management)

Bidirectional charging that supports demand charge management for commercial and industrial customers is feasible in the US, although implementation details are not widely public information due to competitive concerns.154 Fermata has publicly pointed to one such project in Colorado.155 Many EV charging infrastructure funding programs encourage or may even require that commercial and industrial customers install separate service drops and meters for their EV charging equipment. This separates the EV charging equipment from the site load that is being assessed demand charges. As more states and utilities embrace submetering solutions, including solutions embedded in the EV charging equipment, these commercial and industrial customers may no longer be encouraged or required to separate

151 Circuit-specific pricing has been referred to as computationally challenging. Instead, “circuit clustering” defines a few dozen representative circuits and calculates price schedules for each. A participating customer’s circuit is mapped to one of these representative circuits based on shared characteristics. When done across many customers, this creates circuit clusters. This avoids the computational burden of circuit-specific calculation but avoids the complete dilution that would come with a single, utility-wide distribution capacity component. For more information, see PG&E (2024) Resolution E-5326

152 See for example Sridhar & Holland (2023) Economic Analysis of Vehicle-to-Grid Fleets for Grid Services; Cutter et al (2019) California Framework for Grid Value of Vehicle Grid Integration; De Los Rios et al (2012) Economic Analysis of Vehicle-to-Grid (V2G)- Enabled Fleets Participating in the Regulation Service Market

153 OEM projects are as cited throughout this report.

154 Letendre (2024) Interconnection Opportunities and Obstacles for V2H and V2G p.60 – 70.

155 Ibid

their EV charging equipment from their site load, which can expand the opportunity for demand charge management.

The economics of bidirectional charging in the US

Customer Benefits:

School bus sites in the ConnectedSolutions program offered by some New England utilities can earn a $200 USD/kW-summer participation incentive for 30-60 events lasting 2-3 hours each. This is for peak load reduction alone, and these sites may also be generating and monetising Clean Peak Energy Credits under Massachusetts’ Clean Peak Energy Standard program.156 However, project-specific details are not publicly available under the Clean Peak Standard, so it is not possible to confirm the extent to which this is occurring.

Meanwhile, any bidirectional charging systems in California could receive $60 and $90 USD/kW-summer under the ELRP and DSGS programs, respectively.157

Residential customers participating in PG&E’s V2X Pilot may receive up to $2,175 USD in performance-based incentives, while commercial customers in the pilot may receive up to $3,625 USD for performance.158

In addition to these rates and program compensation mechanisms, there are various upfront or ongoing equipment incentives to support the deployment of infrastructure and enabling tools. These vary by site, but PG&E offers up to $2,500 USD in upfront technology deployment incentives for residential customers and up to $5,000 USD for commercial customers.159

California’s Zero Emission School Bus and Infrastructure (ZESBI) funding offers a $95,000 USD incentive for bidirectional DCFC in school bus projects, a premium of $20,000 USD compared to the unidirectional DCFC incentive in the same program.160 Additionally, there are several opportunities for funding that are not specific to bidirectional charging equipment, but for which bidirectional charging equipment is eligible. This includes the federal Section 30C tax credit, offering commercial customers a 6% tax credit up to $100,000 and residential customers a 30% tax credit up to $1,000.161 There are also utility make-ready programs that help offset a percentage of EV charging project costs, up to a pre-determined maximum.

Customer Costs

Total installation and construction costs can vary substantially from site to site. Some examples include early work from PG&E demonstrating 6 residential islanded backup power customers ranging from $10,000 USD to $60,000 USD.162 Meanwhile, analysis from Guidehouse shows

156 Massachusetts Department of Energy Resources, Clean Peak Energy Standard

157 CEC (2024) Demand Side Grid Support (DSGS) Program Guidelines, Third Edition p.22-27

158 PG&E, Vehicle-to-Everything (V2X) pilot program

159 Ibid

160 California HVIP, Zero-Emission School Bus and Infrastructure (ZESBI)

161 IRS Alternative Fuel Vehicle Refueling Property Credit

162 PG&E (2023) Presentation – Vehicle-to-Grid System Integration Focus p.7

school bus V2G charger costs at $65,650 USD and power management equipment and installation costs at $129,952 USD for a total deployment cost of $195,602 USD.163

Utility/Grid Operator/Ratepayer Economics

Many academic and consultant exercises in recent years have assessed the avoided system costs of bidirectional charging. VGIC will be publishing a Value of VGI Literature Review in 2024, which assesses over 80 studies on the topic. One standout, credible study demonstrates that utility-dispatched V2G could yield from $337 USD to $1,472 USD per light-duty vehicle per year in grid services benefit in California, depending on the scenario. The base case scenario yields $407 USD per light-duty vehicle per year in grid service benefit in California, which translates to $670 million USD to $1.018 billion USD in ratepayer benefits in the year 2030 assuming deployment of 3.3 and 5.0 million vehicles, respectively, with 50% of vehicles being V2G enabled.164

Expected timeframes for new products and services

Several new products and services are in late stages of development and are awaiting approval for the UL 1741 SB certification, which demonstrates compliance to IEEE 1547-2018. There is currently only one device with UL 1741 SB approval (i.e., InCharge ICE-22 V2X 22 kW165). There are several manufacturers seeking compliance. It is reasonable to anticipate a significant wave of UL 1741 SB approvals by December 2025.

Another timeframe gate is conformance and interoperability under ISO 15118-20 to support bidirectional power transfer (BPT) between vehicles and chargers. It may be several years until widespread adoption of ISO 15118-20 facilitates a more interoperable bidirectional charging ecosystem.

While there are other barriers to new product and service development, including product design and manufacturing capacity, the timeframes for addressing these barriers cannot be fully assessed from publicly available information.

Consumer appetite and engagement V2G products and services

Data on customer appetite and demand for V2G in the US is limited currently. In January 2023, MotorTrend reported that “about 1,000 of the F-150 Lightning’s 13,258 new owners have opted for the Home Integration System thus far (according to a Sunrun spokesperson.”166 It is possible that a similar ~7.5% opt-in rate has held through 2023 and 2024, when Ford sold ~24,000167 and ~21,000 (YTD)168 F-150 Lightning vehicles, respectively. If so, there may be ~4,400 Ford F-150 Lightning customers with backup power systems. However, it is possible that the ~7.5% opt-in rate has not held since the January 2023, as early adopters may have been more inclined to elect additional features with higher costs, such as home backup power.

163 Xcel Energy & Guidehouse (2023) The Potential of V2X p.18

164 EPRI (2019) Open Standards-Based Vehicle-to-Grid: Value Assessment

165 InCharge Energy, ICE-22 V2X 22 kW Bidirectional DC Fast Charger

166 Seabaugh (2023) For Us, It’ll Cost $18K to Power a House with our Ford F-150 Lightning

167 New York Times (2024) How Ford’s F-150 Lightning, Once in Hot Demand, Lost its Luster

168 Johnson (2024) Ford F-150 Lightning sales surged 160% in August, but gas cars still dominate the total

Although there is limited quantitative data, many important qualitative learnings regarding engagement in V2G products and services have emerged in discussion forums.169 Based on experiences in PG&E’s bidirectional charging demonstrations and V2X Pilots, the utility has shared that customers seek empowerment over their equipment, specifically an override function which would allow customers to opt-out of bidirectional charging when needed. Customers have also reported a desire to limit the number of apps that they need to engage in. One interesting finding is that residential customers do not appear concerned with data privacy violations, while commercial fleets consider their data privacy to be a highly sensitive matter.

Another particularly valuable finding is that customers first set a high reserve battery percentage/range when they begin participating in a V2G program, and over time they trust the configuration and lower the reserve battery percentage/range. This may indicate that as customers develop a deeper understanding of the technology and partners, additional grid support capability may be unlocked through customer action.

Key regulatory or policies issues and initiatives

The US Vehicle-Grid Integration Council (VGIC) is a national membership-based advocacy group focused on advancing the role of flexible electric vehicle charging and discharging VGIC has developed Four Pillars to V2X Bidirectional Charging:

Interconnection

Utilities may not always provide adequate information and support to guide customers/developers through the interconnection process. For example:

• customers may be unclear on whether to request interconnection as an energy storage system or an EV charger (utilities may not provide adequate guidance on their interconnection application forms).

• The application fees may be prohibitively expensive, since it is a new type of system not subject to the cost-based fees afforded to more popular types of systems.

• Interconnection studies may take a long time because the systems, although certified to the relevant UL safety standards, are newer than rooftop solar systems.

• The kW cutoff for sites that receive “fast track” treatment were historically developed around the solar generation capacity that would fit on a typical residential or commercial rooftop. However, today’s bidirectional charging equipment can be much

169 CGIC (2024) Empowering and Enhancing the Customer Experience for Vehicle-Grid Integration

higher capacity than these cutoffs, which means these systems are treated as large distributed-connected generators, resulting in both delay and costs 170

Compensation mechanisms

While today’s compensation mechanism are beginning to represent a respectable portfolio of approved (ELRP A.5, DSGS Option 3, PG&E V2X Pilots, PG&E and SCE Expanded Dynamic Rate Pilots, SDG&E Dynamic Export Rate Pilot, NY Value of Distributed Energy Resources, MA ConnectedSolutions) and proposed (MI ESS and V2G Compensation, MD DRIVE Act, SCE VGRP) mechanisms, there are still relatively few mechanisms relative to other DERs.

VGIC considers there is a “chicken-or-egg” challenge in the relevant policy and regulatory spaces: there is hesitancy to direct or approve compensation mechanisms when equipment availability is limited, and there is limited equipment availability partially due to the lack of compensation mechanisms.

Upfront cost / Capex support

Site design, equipment purchase, construction, installation, permitting, and interconnection phases all incur upfront cost long before customers begin generating revenue. These costs are particularly high during this nascent stage of market development, where economies of scale and important learnings from early adopters have not yet reduced upfront costs, as they can be expected to do.

However, due to overarching cost pressures for electric utility ratepayers and recent shortfalls in state tax revenues, regulators and lawmakers are hesitant to provide funding opportunities to offset these upfront costs. There are some examples of upfront cost support specifically designed for bidirectional charging equipment, including PG&E’s V2X Pilots, CEC’s REDWDS, and CEC’s ZESBI.

Additionally, the federal Section 30C tax credit may help to offset costs of bidirectional charging equipment, although there are no credits specific to bidirectional charging.

Technical Standards and Requirements

Bidirectional charging equipment must directly interact with a complex web of interconnection safety standards and grid codes (UL/IEEE), OEM/EVSE industry interoperability standards (ISO/IEC), EVSE/CMS industry interoperability standards (OCPP/OCPI/OCA), OEM standards (SAE), and metering and weights and measures standards (NIST). Most of these are required by regulators and policymakers, who are new to this diverse ecosystem of standards development organizations. Similarly, the standards development organisation stakeholders may not be accustomed to close coordination with policymakers. This creates natural tensions and process friction and, due to the highly technical nature of standards development, can cause ineffective coordination.

Additionally, policymakers may impose specific functional requirements related to bidirectional charging. For example, the CEC’s ZESBI program requires new school buses

170 For more information on interconnection-related barriers, see VGIC (2022) V2X Bidirectional Charging Systems: Best Practices for Service Connection or Interconnection

funded through the program to have “vehicle-to-grid (V2G) functionality via use of type 1 combined charging system (CCS).” 171 Recently, California’s governor signed Senate Bill 59, which authorizes the CEC to require any EV sold in the state to be bidirectional capable if the CEC determines there is a “sufficiently compelling beneficial bidirectional-capable use case to the operator and grid.” 172 The CEC is directed to consider “vehicle readiness and duty cycles required of vehicles operated by essential service providers.” It is too early to determine the impact this new law will have on the bidirectional charging market.

Striking across all four of these barriers is an inherent challenge to US market development: there are 3,000 utilities spread across 50 states, each with a different regulatory and business environment. Some state regulators have over a hundred staff while others have a single diligent DER expert. Some utilities operate as vertically integrated, investor-owned utilities, others operate in a competitive, deregulated environment with a wholesale market but no capacity construct. Some are run by municipal officials or member-owners. Some systems see summer peaks, duck curves from excess solar generation, wildfire and drought, while others experience ice storms, hurricanes, and winter gas supply constraints threatening widespread outages. Some distribute power radially over miles to individual rural customers while others maintain complex meshed distribution systems. Given this diversity, creating market accessibility by developing any of these four pillars demands a delicate balance of bespoke policy solutions for each jurisdiction and consistent implementation of standard best practices across all service territories.

Overall, the above-mentioned policy and regulatory barriers, including the lack of consistency across regions, remains the most pressing barrier for the U.S. market. These are reinforced by a significant education challenge regarding the state of the technology, market, and the value proposition, not only with customers, policy makers, and utilities, but also with industry leaders who determine product development and strategic investment priorities. Lastly, cost support, to spur early market development and a wider array of product offerings is needed to be needed to help mature the market past pilots and toward full-scale deployment

171 California HVIP, Zero-Emission School Bus and Infrastructure (ZESBI)

172 CLI (2024) California Senate Bill 59