Energy Storage and Wind Power – Potential for Energy Storage in Plug-in Hybrid Electric Vehicles

Energy storage will best be used as a resource for the overall power system. It is not cost effective or efficient to couple energy storage resources exclusively to individual wind plants. It is the net system load that needs to be balanced, not an individual load or generation source in isolation. Attempting to balance an individual load or generation source is a suboptimal solution to the power system balancing needs. Hydropower and energy storage capacity are valuable resources that should be used to balance the system, not just the wind capacity. During this present stage of wind power integration and growth, wind simply adds to the existing opportunities for energy storage.

Is Energy Storage Needed?

At present levels of wind penetration on the electrical grid, storage has not been a priority consideration. But eventually, as a system resource and not exclusively due to wind or other renewable resource capacity additions, the nation’s electrical grid will benefit from energy storage technologies. Essentially, the power system already has storage in the form of hydroelectric reservoirs, gas pipelines, gas storage facilities, and coal piles that can provide energy when needed. Read more about how power is balanced on the electricity grid. Today, storing electricity is more expensive than using dispatchable generation. In the future, through advances in technologies such as batteries and compressed air, energy storage may become more cost-attractive. The prospect of plug-in hybrid electric vehicles holds great promise because they could provide many megawatts of storage for the overall electrical power system. This would also allow wind power and other renewable energy resources to directly displace consumption of transportation-related foreign oil. Energy storage will best be used as a resource for the overall power system.

Potential for Energy Storage in Plug-in Hybrid Electric Vehicles

Plug-in Hybrid Electric Vehicles (PHEVs) are one of a cluster of technologies that can provide a way to reduce carbon emissions (CO2), as well as pollutants such as nitrogen oxides (NOx), sulfur oxides (SOx), and mercury. PHEVs will also contribute to increasing energy security by reducing dependence on foreign oil as a strategic commodity. Finally, PHEVs will combat the rising costs of transportation.

Using a PHEV to provide energy storage is called vehicle-to-grid (V2G) power, and it leads to what some call the "cashback hybrid" approach.

It is likely that PHEVs that have an all-electric range of approximately 40 miles will penetrate the United States market in significant numbers in the near future. While the exact timetable is uncertain, many analysts expect that the trend will begin in 2010 and be in full swing by 2050. One study predicts a deployment of 30% of new light-duty vehicle sales by 2030. The study suggests that "plug-in hybrid vehicles, building upon the engineering and market acceptance of traditional hybrids, are expected to enter the U.S. market around 2010 and to gain market penetration through 2050 because of their superior fuel performance and environmental benefits."

Another study concludes that with "proper changes in the operational paradigm, [the U.S. electric system] could generate and deliver the necessary energy to fuel the majority of the U.S. light-duty vehicle fleet." The study does not address any additional benefits or costs of V2G electric power generation or spinning reserve services that PHEVs may provide in the future.

PHEVs will rely principally on the electric power grid for their fuel. At present, there are dozens of new hybrid vehicles planned for 2010 by various manufacturers around the world. It is estimated that by 2016, there will be two million

A hybrid electric vehicle (HEV), such as the Toyota Prius, has both an electric motor and a combustion engine. The battery pack is small (about 1 kilowatt hour [kWh]) because the electric drive is used only for assisting acceleration and generally managing the alternations that occur between electric and engine power. This system provides good overall performance using a smaller combustion engine. This configuration improves fuel economy by 20–35%, allows for optimized operation of the engine, can capture braking energy and store it in the battery, and can reduce engine emissions due to improved engine control. The batteries sustain their charge during the driving cycle and are not normally designed to be capable of accepting a charge from the grid. The HEV, like conventional automobiles with only combustion engines, has a range limited only by the size of the fuel tank.

Today, the average commuter drives less than 40 miles per day. A PHEV is an HEV with a much larger battery pack (5–10 kWh) and the ability to operate for 20–40 miles in an electric-only mode. The combustion engines are smaller and can be optimized by functioning as a generator that charges the batteries using onboard fuel. PHEVs store enough electricity, presumably from an overnight charge, to permit the first 40 or so miles to be driven solely on electric power. Beyond this range, PHEVs function like HEVs—they are intended to be charged from the grid, and the small combustion engine would only be used when the automobile’s battery is substantially depleted of charge.

In addition, some utilities are implementing a Smart Grid that will contain a high level of smart technologies—technologies with embedded computers that collectively can provide a network of distributed intelligence. The Smart Grid will incorporate standardized communication protocols, affording significant interoperability with other devices. It will be integrated with a smart electricity infrastructure at the distribution level, with the energy management system (EMS) at the transmission level, and with grid operations and planning. Some predict this vision will be implemented by 2025. One study suggests that "with parallel advances in smart vehicles and the smart grid, PHEVs will become an integral part of the distribution system itself within 20 years, providing storage, emergency supply, and grid stability."
The confluence of advances in batteries and grid intelligence may provide the potential to transform the transportation sector over the next 20 years.


Support for energy storage technology applications is growing. Recent projects implemented by the Institute of Electrical and Electronics Engineers (IEEE) and the American Institute of Chemical Engineers focused on PHEVs and "massive electricity storage" in the electric power grid, respectively.

In July 2008, General Motors (GM) announced that it is collaborating with utilities and the Electric Power Research Institute (EPRI) to prepare the nation’s electric power delivery system infrastructure for the widespread sale of PHEVs, such as the Chevrolet Volt, which will likely use a 1.4 L, non-turbo, 4-cylinder engine. This is a landmark, first-of-its-kind effort through which GM will work directly with utility companies and EPRI to ensure that codes, standards, and grid capabilities are in place so that the infrastructure will be able to support the Volt when it comes to market.19 This collaboration involves 34 utility companies spanning 37 states and 3 Canadian provinces. Most of the major utility companies are included and represent a very large volume of the U.S. population. Even so, neither EPRI nor GM can unilaterally speak for their respective industries and supply chains, making it important going forward to ensure that developing a successful PHEV is open and responsive to a broad range of industry participants from both sectors. 


At present, most experts agree that the adoption of PHEVs will begin in the short term with vehicle charging managed by pricing that encourages charging in off-peak times. This grid-to-vehicle concept gives cost benefits to those agreeing to charge their vehicles at night, thus filling in the load valley, and penalizes those charging during the day. However, there are only about 54 million garages for the 247 million registered passenger vehicles in the United States today. Because most consumers without garages do not have a way to charge a plug-in vehicle, there is a substantial amount of infrastructure that will have to be built. Fortunately, that work has already begun with companies such as Coulomb Technologies, which offers products and services that provide a smart-charging infrastructure for plug-in vehicles. Long-term, successful management of vehicle charging will require significant deployment of Smart Grid technologies, which will take time to design and implement.

Phase One

Today, the prospects for any PHEV charging are limited to vehicle owners who can provide a nightly parking location with access to a power outlet. As noted above, this need is a challenge for the vast number of owners who rely on street parking or parking facilities for nighttime parking. The distribution of early PHEV sales may skew only to owners who have garages, and the lack of a convenient charging location may also influence buying decisions. However, the long-term availability of charging locations is a critical infrastructure need, if PHEVs and HEVs are to become the dominant vehicle type in the United States. Even when owners have garages, it is not uncommon for automobiles to be parked in driveways—whether because the household owns more automobiles than they have garage space or because the garage is used for storage, as a workshop, or for some other purpose.

Owning a PHEV and recharging it every night for a minimum charge would increase the average U.S. consumer’s electric consumption by approximately 50%. For a 40-mile range PHEV, the maximum consumption would be about 14 kWh. An average household with a monthly consumption of 850 kWh would increase its demand by no more than approximately 420 kWh. According to a Pacific Northwest National Laboratory 2007 report, "providing 73% of the daily energy requirements of the U.S. light-duty vehicle fleet with electricity would add approximately 910 billion kWh" to the current load. While this is an energy load, it is also a potential source of energy storage. If it is assumed that there is a uniform distribution of battery charge, that automobiles are driven on average two hours per day, and that the automobiles are available for use by a utility when they are not being driven, the average energy storage available for discharge or charge would be 417 billion kWh. This capability is valuable to the electric power grid for peak shaving, valley filling, and reserve spinning for guarding against losses due to contingencies.

A major challenge to consider is how PHEV usage will interact with high levels of renewable energy generation capacity, especially wind and solar power. Some types of renewable energy generation have strong diurnal characteristics, which are obvious with sunlight limitations for solar power and which vary somewhat according to geography for wind power. If the PHEV charging load matches peak renewable energy production, then the electric power industry will be provided with an ideal situation. If the PHEV charging does not match daily renewable energy generation cycles well, then the mismatch is problematic, and deployment of energy storage technology has an even more important role in supporting the attainment of high renewable portfolio standards.

Uncertain Future

The most influential factors affecting the PHEV industry between now and 2030 are uncertain regulatory requirements, including consumption regulations, carbon taxes, and emissions standards. Technology breakthroughs, primarily in batteries, manufacturing technology advancements and deployment, incentives for early adopters, and the development of industry standards for components and technologies are also important uncertainties. Infrastructure design and associated costs are significant issues, but they are currently being addressed by several entities in anticipation of the successful adoption of PHEV technology. The next generation of vehicle purchasers is expected to be more conscious of "green" benefits and be aware of the negative effects of emissions. Nevertheless, the United States appears to be on a path to the adoption of a significant number of PHEVs, and the electric power grid will have a central role in assuring their adoption.

Phase Two

The next logical stage of infrastructure development is the vehicle-to-home (V2H) and/or the vehicle-to-building (V2B) concept. Here, a PHEV would have the ability to communicate with the home or small businesses. The PHEV battery might be operated in a way that makes it available for emergency backup for the home or business in addition to allowing the home to manage its charge/discharge schedule. Optimization of onsite renewable energy sources would be a strong benefit because the consumer could take advantage of the additional production of the on-site energy, such as wind power at night, when there is minimal demand from the home or business. This system would be the first instance of bidirectional flow with smart charging.

Phase Three

In the long term, the envisioned V2G concept allows for full bidirectional controlled flow between the vehicle and the grid. Control of the bidirectional electric flow could include payments to owners for use of their automobile batteries for load leveling or regulation and for spinning reserve (the cashback hybrid incentive). Kempert and Wellinghoff say that, "it is our opinion that the potential benefits of vehicle-to-grid PHEVs are so compelling that the technology is clearly an enabler of both the Smart Grid and the successful market penetration of the PHEV itself." An article in the magazine Public Utilities Fortnightly argued that the payments to individual PHEV owners using V2G technology could be as much as $2,000 to $4,000 per year per vehicle for just spinning reserve or regulation services. Because the flow of energy is bidirectional, electric service providers can benefit in addition to PHEV owners by controlling or at least monitoring the flow between PHEVs and the grid. Possible benefits to utilities include the ancillary services mentioned earlier, demand response / load management assistance from PHEVs, and green power credits.

Next Steps

In order to support this model, considerable work must be undertaken to develop the market protocols, information exchange standards, and possibly the electronic interfaces that will govern V2G integration and interaction. PHEVs will bring together the entire value chains of the automotive/transport sectors and the electric supply sectors—which currently do not share common standards or standards bodies.

To implement this concept, third-party ownership of batteries may be needed. The third-party entity would be a party other than the PHEV owner or the automobile manufacturer and may include an electric service provider, a generic profit center, an information technology company such as Google, or an emissions credit-trading organization. Consumer benefits may include a free or reduced-price battery accompanied with warranty service to ensure performance, reliability, and safety. In addition, automotive original equipment manufacturer (OEM) or third-party ownership would likely enhance the prospects of environmentally secure end-of-life disposal of the batteries, an issue of high environmental importance. Furthermore, there is a possibility that after batteries have reached the end of their useful life for vehicular purposes (after degradation of charge capacity has reduced vehicle range), they may still have economic use in power backup or utility applications when suitably repackaged. This repackaging prospect, coupled with the possibility of a vehicle retrofit with a future higher-performance battery is very real. However, the first-generation PHEV vehicles will not include V2G capability primarily due to warranty concerns about the batteries and a desire to avoid additional complexity and cost.


PHEVs, as distributed energy storage solutions for V2G applications, face the same issues as other energy storage projects. The lack of regulatory clarity on how energy storage is defined and regulated as well as how cost recovery issues will be resolved are potential barriers to investment. The extent to which PHEV owners can participate in V2G applications (such as providing load smoothing and ancillary services) and receive compensation for participating in these programs is still unclear.

Phase one, as described above, in which PHEV owners are encouraged to charge their vehicles at night, would require changes in pricing and/or metering policy to ensure that consumers fulfill their responsibilities. Policymakers could provide incentives to PHEV owners through time-of-day pricing, with higher rates at times of peak use and lower rates at night, to encourage PHEV "off-peak" charging. In phases two and three, additional regulatory approval would be required for meters or other communication technologies that can regulate the charging or discharging of PHEV batteries to occur at specific times. Charging would occur, as described above, at night or other times of low load, while discharging would occur at times of peak load or when necessary to provide other ancillary services. Regulatory approval would be most likely required to ensure that these strategies are properly implemented and that PHEVs are incorporated into a broader plan for overall grid transformation, the development of DG, or the implementation of Smart Grid technologies.

PHEVs and electric vehicles (EVs) were awarded incentives up to $7,500 per vehicle in the Emergency Economic Stabilization Act of 2008 passed by Congress on October 3, 2008. This incentive is intended to make the price of a PHEV competitive with other similar-class vehicles for early adopters. In addition, the development of these vehicles will likely benefit from direct tax incentives to suppliers or purchasers as well as locally specific indirect incentives, such as high-occupancy vehicle lane access, parking access, and incremental cost rebates. There is already concern from policymakers about how to replace declining gasoline tax revenues that are a crucial element in the support of highway infrastructure. In the event that PHEV adoption succeeds wildly, two important concerns will include how to fund utility infrastructure to support PHEVs and how to replace the gasoline tax revenues to fund highway infrastructure. Utility infrastructure modernization costs could be socialized through general T&D tariff increases, funded incrementally through a mechanism tied to local PHEV sales, or funded through some other mechanism. Funding grid modernization is an important question that emphasizes the importance of understanding the specific local and regional infrastructure needed to support different levels of PHEV and EV adoption.