On the Horizon: Early Days for Utility Adoption of Bidirectional Charging

As more customers purchase bidirectional-capable vehicles and the necessary bidirectional charging equipment to enable them, utilities will need to understand how these systems interact with the grid and prepare for potential widespread adoption. Bidirectional chargers will be both a load and source of electricity. Utilities are beginning to study bidirectional charging systems through demonstration projects and allowing customers to participate in demand response and vehicle-to-everything (V2X) programs. SEPA conducted a stakeholder interview series with 37 utility subject matter experts (SMEs) to learn more about utility planning for bidirectional charging as part of their ‘State of Bidirectional Charging in 2023’ report. This blog highlights some of the trends and perspectives from those conversations.

Utility Interest in Bidirectional Charging Programs

While utility opinions on bidirectional charging differ, trends among the interview respondents revealed:

• Utilities have already begun to study bidirectional charging systems, and a few utilities have begun incentivizing customers to participate in utility programs.
• Utilities have interest in creating bidirectional charging programs in the near- and medium-term.
• Utilities are interested in a variety of bidirectional charging applications, with primary interest in customer and system-wide peak shaving (capacity) and grid exporting (ancillary services) use cases.
• School districts, commercial fleets, and residential customers are primary customer segments that utilities will target first for bidirectional charging programs.

Figure 1. Utility Interest in Different Types of Bidirectional Charging Applications.

As a precursor to developing and adopting full-scale bidirectional programs, 16 of the utilities indicated that they had already been testing bidirectional charging systems to understand grid operation impacts (Figure 2). Across the 16 utilities, from small co-ops to large IOUs, these demonstration projects and pilots were designed for:

• Testing the technology and understanding the reliability and responsiveness of bidirectional charging systems
• Understanding the local and system level grid impacts of bidirectional charging systems
• Developing utility confidence in bidirectional charging systems to support customers as they adopt this technology
• Understanding the efficacy of different bidirectional applications and beginning to assign value to different use cases

Figure 2. Utilities Adoption of Bidirectional Projects.

The utility SMEs also shared their perspectives on the types of barriers they may face when implementing and scaling bidirectional charging programs. Utilities may face different challenges depending on their present state in the implementation process. The SMEs identified the following barriers (Figure 3).

Figure 3. Barriers to Utility Implementation and Scaling of Bidirectional Charging Programs.

Utility SMEs have questions about establishing the value proposition of different V2X applications, and other industry stakeholders also often raise this issue. In order for bidirectional charging to be adopted at scale, the market needs to support compelling economic and other non-monetary benefits for utilities, customers, and manufacturers. For utilities, value streams include bulk energy, ancillary, and transmission and distribution services. For customers, value streams include resilience/ backup power, bill reduction, and compensation value streams. While the industry has begun to identify where bidirectional charging provides value, the exact economic value has yet to be determined and will largely depend on the utility’s service territory.

Early Utility Bidirectional Charging Programs

While many utilities have not yet developed customer-facing bidirectional charging programs, there are already some notable examples of how utilities are interacting with and incentivizing bidirectional charging (Table 1). These seven utility examples show a breadth of V2X interactions, incentive structures, and program types. In the early days of adoption, utilities are studying how different types of program structures and value streams work in their territories and with their customers.

As utilities continue to determine the value of bidirectional charging, the industry will see more utilities developing their own bidirectional charging programs, similar to how the managed charging space has grown and adapted over the past two years since our most recent State of Managed Charging report. Utilities are planning for customer adoption of this technology and are preemptively beginning to study, plan for, and incorporate these systems into their grids. While there is consensus that bidirectional charging presents a major opportunity, there are barriers that need to be addressed before the industry can fully capture its value. In the meantime, utilities should continue to expand their managed charging programs. In parallel, SEPA will continue tracking and disseminating learnings that come from these managed and bidirectional charging programs. Stay tuned for the next report in our State of Managed Charging series.