Polestar wants to save the grid with V2G Virtual Power plant trial in CA/Sweden

Polestar has announced that it will create two large trial virtual power plants in California and Gothenburg, Sweden, to examine how Polestar 3’s vehicle-to-grid capability could be leveraged to help stabilize grids and earn money for EV owners while their vehicle is parked.

We’re at Polestar Day in Santa Monica today, where the company is showcasing its future plans to media, investors and owners. For more news from the day, check out our Polestar Day News Hub.

Vehicle to grid, or V2G, is a concept in EVs that allows a vehicle to not only consume energy from the electrical grid, but also to discharge its batteries back into the grid to provide energy when needed.

This is all well and good on a single vehicle basis, but when you combine several vehicles across a large fleet, it has the potential to help stabilize grids by acting as large scale, immediately-dispatchable distributed energy storage.

These collections of distributed batteries have been referred to as “virtual power plants,” and they allow home batteries to take the place of “peaker” electricity plants, which typically run on fossil gas and are highly expensive and polluting. Tesla has launched several of these in various territories, including one in Puerto Rico that could become the world’s largest, and one that just recently got rolled out in San Diego.

But Tesla’s virtual power plants only combine stationary Powerwalls together, which each have a total energy capacity of 13.5kWh. Meanwhile, electric cars typically have much larger batteries than this, and could thus provide a lot more power to the grid, but Teslas don’t have bidirectional charging (and they’re being kinda noncommittal about it).

Enter, then, the Polestar 3. Polestar’s upcoming Polestar 3 SUV will have all the necessary hardware for V2G on release, along with a massive 111kWh battery, the same capacity as more than 8 Powerwalls. And Polestar is now examining how it can use those vehicles to serve as a virtual power plant.

Today at Polestar Day in Santa Monica, Polestar announced that it will run two pilot virtual power plant programs, one in Gothenburg, Sweden, where the company is headquartered, and one in California.

It is partnering with local grid operators in Gothenburg and with the California Energy Commission and Electric Power Research Institute to study V2G use in the two areas, and try to create plans that can be used across regions. Both studies are being funded by Vinnova, a Swedish government agency that funds R&D projects.

These projects will link all participating Polestar 3 vehicles into a central system that calculates the total battery capacity available and will discharge it to the grid based on demand, but also taking into account battery longevity on the vehicles.

Not only does a system like this help the grid, but it can also help owners make money. When “demand response” events happen and virtual power plants are called on, it’s often when electricity is the most expensive, and therefore, the most profitable to sell back to the grid.

Vehicle-to-grid has the potential to not only benefit individual customers, but whole communities. The average car is parked 90% of the time. With the bi-directional charging capabilities of Polestar 3 and the Polestar VPP, we can explore business models and community solutions that can unlock the true potential of V2G and enable owners to support the energy transition when they don’t need their car for driving.

Thomas Ingenlath, Polestar CEO

For example, in the most recent heat wave in California, wholesale electricity prices got up to around $2,000/MWh, because grid operators were desperate to buy electricity at any price in order to keep the lights on. If that number doesn’t mean anything to you, the current spot price of electricity while I’m writing this article is $56/MWh. So grid operators were paying almost 40 times as much for electricity during that event as they are on a normal November night.

At $2,000/MWh, you could theoretically make over $200 by discharging an entire Polestar 3 battery into the grid. Compare that to the normal cost of charging up, which is somewhere in the $20-$30 range overnight in California, and you can see how this could be a profitable venture.

Powerwall owners have already seen the effects of this, with owners making up to $500 over the course of the first year of Tesla’s virtual power plant in California.

V2G technologies turn EVs into virtual power plants, making homes and the grid more resilient while putting money into the pockets of drivers. The CEC is excited to have Polestar partner with innovators in California to advance their V2G plans

Commissioner Patty Monahan, California Energy Commission

But with vehicles, there are other considerations. Since vehicles are typically used to get places, rather than used specifically for home energy storage like home batteries are, this means that the needs of the grid and the desire for profit must be balanced with… using the vehicle for its intended purpose.

Further, V2G requires additional hardware off the vehicle, allowing homes to feed energy back into the grid, which is not generally the direction that electricity goes in. This is why it has mostly been trialed in fleets (as Nissan and Fermata have done with the Leaf), and in home battery/solar installations where homeowners are installing grid interconnects anyway.

Because of these two barriers, V2G has been more of a dream than a reality for many years, talked about as a theoretical future technology by the EV faithful but without many tangible applications of it in real life.

So Polestar’s trial will see how practical it is for vehicles to be used for this purpose. Since vehicles are parked most of the time, they can be connected and ready for use by the grid. But Polestar will have to see how owner behavior can contribute to this, and how much juice they’ll be able to pull from each vehicle before owners decide they need that range to pick up the kids from soccer practice.

For this last point, Polestar has the benefit of having control over its vehicle software, such that an app could be designed where users can set their own parameters for when and how much they want their vehicle to be discharged during demand response events. Then the system can automatically call on any plugged-in vehicles through the internet and draw whatever owners want to contribute to the cause.

All of this said – while the Polestar 3 does include hardware for V2G, that doesn’t mean the software is included right out of the gate. Polestar says that a software update to enable bidirectional charging will come later, after this study finds the best solutions for consumer adoption and a business model that works for the system. So you’ll have to stay tuned for the results of the trial before you start using your Polestar to save the grid.

The trial begins in the first half of 2024 in Gothenburg, and will run for two years, and Polestar aims for it to be one of the largest V2G pilots in Europe. As for California’s pilot, a “pre-study” will begin in December, and run until October of next year, to decide on a roadmap of how to implement V2G in California.