PG&E and BMW Partner to Extract Grid Benefits from Electric Vehicles

Pacific Gas and Electric Company (PG&E) and automaker BMW are teaming up to test the ability of electric vehicle batteries to provide valuable services to the electric grid. If successful, the pilot program could pave the way for significant utility payments that could stimulate further customer purchases of electric vehicles. PG&E selected BMW after a competitive solicitation to manage a minimum of 100 kilowatts of electric demand on PG&E's system, much as other large industrial and commercial customers do today as part of the utility's demand response programs. Those programs improve reliability, lower costs and help the environment by incenting customers to cut usage during periods of high peak demand. Demand response programs can save money by delaying the need to upgrade power lines, transformers and other equipment to handle infrequent peaks in demand. They can reduce the need to buy expensive and polluting fossil-fueled power to meet such spikes in demand. And, with further refinement, they may help utilities manage and smooth out the intermittent flow of energy from renewable sources such as wind and solar generation. BMW will help PG&E manage power demand on its grid in two ways. First, the automaker will create a large energy storage unit at its North American design and research facility in Mountain View, using lithium-ion batteries that were once installed in MINI E demonstration vehicles. Like other storage systems, these “second life” batteries can absorb cheap surplus electrical energy when demand is low and release it on request when demand soars. Second, BMW will enlist up to 100 customers of its new i3 plug-in vehicles to take part in the BMW i Charge Forward Program. If PG&E needs to curb customer demand for whatever reason, it will send BMW an alert over the Internet, indicating how much load to cut and for how long. BMW then will signal the telemetry equipment in each participating vehicle, telling it to halt its charging for the duration of the event. PG&E will pay BMW for these services, as it does other demand response participants. However, BMW will leverage these payments to lower the overall cost of ownership of owning an electric vehicle. BMW customers participating in the program will receive an upfront incentive to enroll and an ongoing incentive based on their performance in reducing load. Each customer in the program will be able to track the value of the ongoing incentive as well as opt-in/out for each event via a phone app throughout the 18-month pilot. PG&E hopes that this program, if successful, will pave the way for other automakers and demand response partners to leverage the value of grid services from electric vehicles, and similarly reward electric vehicle customers. “We have more than 60,000 electric vehicles in our service area,” said Aaron Johnson, senior director of Customer Programs at PG&E. “Collectively, they represent a huge and growing resource that we can potentially tap to provide more flexible, lower cost, and cleaner energy for our customers.” Johnson said the pilot program will help determine if automakers are able and willing to provide such managed grid services, evaluate the benefit of putting vehicle batteries to work for PG&E customers, and develop incentives to help grow the market for clean electric vehicles.