IV A Business Model for Employing Electric Vehicles for Energy Storage

Aggregating the storage capabilities of electric vehicles is generally considered to be a promising method of supporting the integration of volatile renewable energy sources into the power grid. We analyze this concept from an economic perspective by developing and evaluating a business model for electric vehicle aggregation. Specifically, we investigate the case of parking garage operators using the electric vehicles located at their facilities to provide reserve energy for frequency regulation. We evaluate revenues and cost structures using extensive real-world data sets on the German market for frequency regulation, on battery states of charge at different times of day, and on occupancy rates of parking facilities. We find that possible revenues given current market conditions are far inferior to investment costs for charging and IT infrastructure. Even if the operator installs these features to enable customers to charge their vehicles for a fee, it would be more profitable to focus on this service and charge vehicles immediately when they enter the garage instead of delaying charging for frequency regulation. Overall, we conclude that a large-scale adoption of electric mobility may produce greater challenges to the power grid than is currently projected.