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The Smart Garage (V2G)

By Cam Burns

In the early 1990s, RMI researchers dreamed up a new energy paradigm integrating cars,buildings, and the electric grid. The only problem was that the technologies needed were either too expensive or not yet developed. Today, all that is changing.

Rocky Mountain Institute has long been a leader in the diverse fields of energy, transportation, and green building. But today the Institute stands on the cusp of a completely new era that will see all three coalescing into a new energy paradigm: the “Smart Garage.”

Smart Garage is an idea, a sweeping concept, about the seamless integration of vehicles, homes, and offices via the electric power grid. The components of the system would share power and share it in such a way that consumers would make better choices about the energy they use, they would have access to more reliable, cheaper, and cleaner energy, and they would need less of it. This shift—which could help change the way we interact with energy systems in our society—is occurring because of recent advances in both the grid and vehicles. These innovations are happening so quickly that RMI is gearing up to guide the hundreds of products, the thousands of players, and the billions of dollars that will come together in this next big energy solution.

A Simple Concept

Electricity is a beautiful but fickle mistress. It’s best made in the amounts that society needs, generally near where it’s needed, and nearly exactly when. And because it’s the life support system of everything from medical equipment to financial data, we are slaves to its ways. The simple problem is electricity cannot be cost-effectively stored in large quantities.
Seventeen years ago, RMI Chief Scientist Amory Lovins and a small group of transportation researchers—including Michael Brylawski, Vice President of RMI’s transportation group, MOVE—developed a concept about vehicles and the grid.

The idea was simple: vehicles with electric drivetrains would, by most extensions, include some kind of electric storage or conversion device or combination of devices—batteries, fuel cells, whatever. Even back then it was obvious that there was a lot more power in electrified vehicles and their storage devices than there was in all the power plants connected to the grid.

The real benefit of electric vehicles, however, is that they bring a new level of stability and control to the grid—including giving power back when it’s needed most (in blackouts or at times of peak demand). By some estimates, a battery-electric vehicle, with about 40 kilowatt-hours of usable energy, could power an entire residential block for over an hour if necessary.

In 1991, however, this technology was just a gleam in the eye of RMI’s researchers for several reasons. For starters, there was nothing close to an electric grid that could handle such operations. Cost-effective electric traction for vehicles was still years away. Batteries that could store the required power had yet to be developed. Integrated renewables and buildings were relatively unsophisticated. And digital, Internet-based, and wireless communications were mere infants. Today that’s all changed.

Green Trends for the Car, Home, Office, and the Grid

Even if you pay only passing attention to the electricity industry, you’re probably aware of talk about a so-called “Smart Grid.” Although the smart grid is largely an idea at this point, those exploring it are already touting its virtues.

The smart grid is basically the same grid you’ve grown up with except that it’s tricked out with modern equipment—sensors, rapid communications devices, and distributed intelligence. Its various components talk to each other and report problems and failures, update each other’s data, and send messages to users like homeowners and factory managers.

Proponents say its capabilities could range from turning parts of the grid off when power failures occur (so that they don’t propagate across wide areas) to energy management activities like “demand response” (a way of letting customers know when power is scarce, and thus expensive, so they can opt to trim or defer power use). The Smart Grid can also accept power in better, more intelligent ways from storage systems—like electric cars.

Numerous organizations are quickly investigating the potential of a smart grid, what it can do, what it might cost, and how to set one up. In the early 2000s, RMI was part of a multi-year project with PECO Energy in Pennsylvania, Nevada Power, and all three major California utilities to see how much demand could be reduced using smart technologies and demand response. Another example comes from Boulder, Colorado. In March 2008, Xcel Energy announced that it would start implementing a full-blown smart grid there sometime this year.

A second important trend is the vehicle sector’s rapid move toward fully electric or partially electrified vehicles, notably plug-in hybrid electric vehicles (PHEVs). The causes are many and varied ($4-a-gallon gasoline, greenhouse-gas emissions, consumer energy choices, etc.), but the reality is undeniable.

"Vehicle start-ups are sprouting like mushrooms, and we haven’t seen this in years,” notes RMI Analyst Laura Schewel, who manages the Institute’s Smart Garage project. She lists new automakers such as ZEN, Miles EV, Fisker, Phoenix, Aptera, Vectrix, GEM, Zap, and Venture Vehicles—all of which came on the scene within the past few years, or even months—as evidence of what’s happening.
Companies such as Tesla Motors and Th!nk are already selling electric vehicles in small quantities, and Toyota and General Motors have both committed to having a plug-in hybrid electric vehicle for the U. S. market by 2011. Renault-Nissan recently announced the development of a mass-market electric vehicle in conjunction with Morgan Stanley-backed Project Better Place, a business based on revenues from charging the new vehicles.

RMI got into the fray as well, spinning off a for-profit PHEV technology developer, Bright Automotive, early this year.

Green building design has also come a long way, as have photovoltaic (PV) cells. Increasingly, PV systems are being incorporated into the exterior walls and roofs of buildings, inconspicuously absorbing light and generating a charge.

“It would be potentially a minor adaptation in most cases,” says RMI Principal Architect and Senior Vice President Greg Franta, FAIA. “On the other hand, some situations would not just be suitable at all, and in some climates we’re going to have more problems than in others in terms of renewables. In new buildings it should be easy to incorporate.”

Several green building projects that RMI has worked on in recent years point the way to the Smart Garage paradigm, namely the University of Denver’s Sturm College of Law and the Missouri Department of Natural Resource’s Lewis and Clark State Office Building. Both have power outlets so visitors and employees can hook up electric vehicles for charging (the Law School planned to buy green power for those vehicles; the Lewis and Clark building has its own photovoltaic system).

Economic Motivations

The economic prize for developing a Smart Garage energy paradigm is considerable.

Utilities sell a disproportional amount of their power on hot summer afternoons. At night, business plummets. For the utility, that means their expensive generation and transmission equipment stands idle. “Night-charging” vehicles, therefore, could be a lucrative twist on the business of selling electrons.

The National Renewable Energy Laboratory recently estimated that if half the nation’s light vehicles were ordinary plug-in hybrids they would represent a night-charging market of 230 gigawatts. That’s good news for the U.S. wind industry. In many areas, wind tends to blow harder at night, creating more energy when the vehicles would be charging.

“The utilities are going to sell a lot more electricity with plug-in hybrid electric vehicles,” notes Brylawski. “[A] utility will be able to better match variable supply resources (like wind) with demand. … [C]ars will buy power mostly at night when the utility wouldn’t normally sell power. In other words, these kilowatt-hours would normally not even be used. The Smart Garage paradigm is like a discount store for the utilities because they can then sell their previously unwanted kilowatt-hours to a really hungry new market.”

The Smart Garage could even create revenue for the consumer. On hot summer afternoons, utilities often struggle to keep power flowing so offices are lit and buildings are cool. Electricity is sometimes in such demand that it could be worth dollars per kilowatt-hour, not cents. Under this new paradigm, car owners could let their batteries drain onto the grid during the day, then drive home from work on gasoline. The value of this “load shaping” could be credited to the car owner’s electricity bill.

Additionally, utilities must reserve some portion of their capacity to respond to second-by-second variations in the load and to provide “reserve” power in case of power plant or transmission line failure. The storage capacity of cars could be used to provide these “ancillary services” to the utility. And, again, the utility would pay the customer for using his battery.

Aside from utilities, many other industries stand to gain from the Smart Garage, too. Companies specializing in everything from the wireless telecommunications business to the financial sector to component-making to electric-load aggregation could see their markets expand or even find ways to enter entirely new markets.

The battery industry offers a stunning example of the potential: lithium-ion batteries—which are becoming popular with electric car companies—represent a business that’s less than fifteen years old. And yet, worldwide investment in lithium-ion battery technology R&D is well over $1 billion annually, and expected to grow to more than $5 billion by 2015, according to RMI’s survey of the industry.

Carbon Reduction Benefits

The carbon reduction benefits are also huge. A Smart Garage energy paradigm could simultaneously reduce the environmental impact of both the transport sector and the electricity sector. Driving a vehicle that uses electricity creates fewer greenhouse-gas emissions than driving a vehicle that uses gasoline, even if the electricity is made from fossil fuels (such as coal).

“There have been more than seventy studies on this question,” noted John Waters, a former RMI practice leader who left last year to lead The Bright Automotive spin-off. “Do we net a better carbon dioxide reduction by relying on the grid rather than relying on gasoline or diesel? Depending on how you evaluate it and which region of the country you study, there’s a 30 to 75 percent reduction in emissions by using coal-based electricity rather than liquid fossil fuels in cars and trucks.”

A fleet of 500,000 PHEVs could reduce carbon dioxide equivalent emissions by 40 million tons compared with the equivalent gasoline-powered vehicles over the ten-year life of the PHEV, RMI calculated last year.
A recent study by the Natural Resources Defense Council (NRDC) and the Electric Power Research Institute (EPRI), which RMI believes uses conservative estimates on achievable mileage, found that widespread deployment of plug-in hybrid electric vehicles by 2050 could reduce the U.S. greenhouse-gas emissions by more than 500 million tons annually.

Also, improving the finances of PHEVs by reaping benefits from the power sector, Smart Garage will accelerate the penetration of important green technologies—hybrid cars and wind turbines, to name two.
More importantly, wind turbines built to serve the night car-charging market would still spin whenever the wind blew and may eventually be able to meet a considerable portion of America’s electricity demand—a huge step toward reducing the country’s reliance on fossil fuels.

The Smart Garage Summit and Model

Rocky Mountain Institute is in a unique position to steer the Smart Garage paradigm.

“We know a lot about the grid, the needs of buffering wind and solar with some sort of storage, and we have a strong vehicles background,” notes RMI Vice President and Energy & Resources Team Leader Stephen Doig. “ That’s a nice combo that most can’t match. But in the end, this is going to take a lot of collaboration so for now we are really just instigators.”

RMI’s position today is somewhat analogous to the Institute’s position in 2003, when RMI devised and published a strategy around energy-efficient data centers. That effort required deep knowledge of the grid, power supplies, building design, and server architecture—among others.

“Obvious analogies will be in the development of the cell phone,” notes Lovins. “About twenty things came together to make a cell phone possible, like packet switching [in which messages are cut up into chunks before being sent then transmitted individually—often times via different routes—and then reassembled at their destinations] and developments in microelectronics and batteries and miniature antennas as well as the convergence between global wireless and the Internet.”

So how do you steer a massively complex paradigm shift? One way is to develop the leading analytical model to show how the implementation of the various aspects of the full Smart Garage concept might come together, and to hold a summit to talk it through with industry partners. To date, those partners include the Google Foundation, Ford, Johnson Controls, Duke Energy, and Danaher, with at least ten more expected to participate.

The model would include the obvious, like different kinds of batteries, different kinds of car models, the miles a commuter drives, and other characteristics of a wide range of scenarios.
Even within the battery sphere, as Schewel points out, differences in chemistry, cost, size, durability, environmental impacts, and other factors can mean very different outcomes. The greatest complexity lies in how those factors interact over time. Coupled with a dozen automobile configurations, there are hundreds of different scenarios the model will describe in the near-, medium-, and long-term.

“We’re trying to design it so that it has a very simple interface,” Schewel says. “And we’re going to publish it open-source on the Internet so the public can use it. They might log on and change, say, the 35 most relevant parameters like their region’s weather, or gas prices, or driving patterns, and each will get unique results.”

The results could include everything from emissions to energy prices to information about the optimal hours for charging. The state-of-the-industry analysis will include a description of the business case for all the sectors involved, an analysis of how to implement Smart Garage so that early investors aren’t penalized, and a description of how to influence investment in the various aspects of it. The report will also include a description of technical aspects of Smart Garage—how electricity flows from grid to car and back, what kind of connectors would work, what kind of standards for software are needed, how metering will work, and other nuts and bolts. The third component of the analysis will be an overall “Roadmap” of the way that the Smart Garage might come together. Obviously, coordination is critical.

“There are roughly 30 to 40 manufacturers of vehicles, there are 300 to 400 car and truck models, and there are 3,000 retail electricity providers,” notes Brylawski. “So you clearly need standards so that the hundreds of models of car can talk to the thousands of retail electricity providers and provide a somewhat seamless system. And you can’t do that without standards, and you can’t do that when you collaborate with only three automakers and three utilities. You really have to have a broad consortium of companies across the value chain.”

Clearly, with so many players, with such interwoven cross- sector participation, and with such huge financial, environmental, and lifestyle incentives, the Smart Garage might ultimately prove to be one of RMI’s most important projects ever.

“There are lot of people working very hard to implement major shifts towards a greener world, doing things like installing solar on their roofs, or pushing Detroit and Japan to come out with radically new cars, or fighting to get wind power mandated by the government,” Schewel says. “Sometimes, it feels like a lot of environmental movements are happening in isolation, or, worse, fighting for limited resources, public attention, and funding. Smart Garage gives us the opportunity to work together, on a mutually beneficial technology that drives all these threads of the green movement forward together.”

Cam Burns is RMI's Senior Editor

--Published July 2008