More than a century ago a fierce technological and marketing battle raged between Thomas Edison and Nikola Tesla to establish the standard for electrical power distribution. One favoured Direct Current (DC), the other Alternating Current (AC). In the end, AC with its increased efficiency and flexibility won out. This enabled widespread electrification, the greatest energy revolution in human history.
A similar AC/DC battle is now raging in the world of automotive batteries and storage. It is holding back a new energy revolution.
Electric cars are batteries on wheels. They can be a major asset for an electricity system by charging our cars with electricity when there’s lots of wind and sun, while feeding back into our homes and electricity grids whenever needed. This type of flexibility is essential to operate grids with high shares of renewables.
The good news is that the potential is enormous. A 2024 study for T&E showed the EU could save €100bn in grid costs by deploying Vehicle-to-Grid (V2G) capable vehicles. For EV drivers, it offers the prospect of very cheap ‘fuel’ costs, worth up to €600 a year, almost halving charging costs.
Octopus and BYD, EON and BMW as well as Mobilize and Renault have recently launched attractively priced V2G bundles. This creates the impression V2G is finally about to break through. In reality, these pilot projects won’t translate into mass market deployment until the new war of the currents is settled.
Using your car as a giant home battery means electricity needs to flow between a home (or the grid) and a car. The grid runs on AC, but an EV battery runs on DC. So if you want to take electricity out of a car battery and feed it into the grid there needs to be a device, called an inverter, to turn DC into AC.
Every EV already has an unidirectional inverter in its on-board charger, to convert AC grid electricity to DC which the battery can absorb.
Carmakers like Renault and BYD have chosen to make that inverter bidirectional, so that the car itself can do bidirectional charging with a cheap and cheerful AC wallbox.
Other carmakers like BMW, Ford and Mercedes are – for now – forcing their customers to buy a special charger with a DC/AC inverter in it.
This mixed strategy prevents scaling of V2G for two reasons:
First, whilst having 490 GWHs by 2040 of additional, and ‘free’ storage from EVs would be a huge asset for Europe’s energy system, the savings for individuals are modest (€300-€600/year). If a charger costs €2000 before installation, the business case is not compelling.
Second, different standards means chargers and cars are not interoperable. Think for example of the millions of people leasing cars. Should they change the charger every four years? Or remain forever faithful to BMW or BYD? The risk of lock in and stranded assets is huge.
Third, all these systems are proprietary. That makes it impossible for third parties to build innovative solutions that deviate from what the OEM and energy partner have developed.
Settling the war of the currents
Just like over a century ago, only the ‘AC solution’ i.e., doing DC-AC on board the car will enable the energy revolution to reach the masses. The cost of making the existing inverter bidirectional is around €100 and becomes trivial once it is fitted as standard. AC charging equipment is cheap and will enable bidirectional charging – as required by EU law. Most, but not yet all carmakers understand this.
Solving these kinds of problems is the EU’s raison d’être. In the automotive package the Commission has given itself the power to regulate V2G. It must use its power, and require all EVs to become capable of interoperable, AC bidirectional charging.
Settling the war of the currents will unleash the next energy revolution. Since the automobile was invented, one of consumers’ biggest gripes has been the cost of filling up their tanks. Now consumers can be essentially paid to do so. Who wouldn’t want that?
