The Mobile Grid: Secret Life of Electric Cars

Michael Chagala
Manager of Marketing Technology

It will be a billion-dollar industry...

long before you ever see one, perhaps even before the first one is built.

At any point in time, there are visionary people working in basements and coffee shops whose ideas will someday make them overnight multi-millionaires. They are able to make sense out of a seemingly infinite and random set of variables swirling around in what we call the future. They see intricate patterns where the rest of us see nothing. They invent brilliant things that revolutionize our habits and become part of our everyday lives.

I’m going to pull back the curtain and reveal something to you.

Much to their dismay, I’m going to pull back the curtain a bit and reveal to you something still in the basement stage. This will help you skip the “how did I not see that coming” feeling everyone else will have in a few years. Smart parking lots will eventually be an integral part of our everyday life, and will fundamentally change how the grid operates.

To begin to understand the upcoming paradigm shift, you need to stop thinking of electric vehicles as electrified versions of gas cars, and think of them as they truly are – portable power plants. Each one contains a very large lithium-ion (or similar) battery, much of the time charged from free solar electricity. If we pick a number between a Nissan Leaf’s 30 kWh battery and a Tesla 100 kWh, let’s say the average car battery is 50 kWh. To put this into perspective, just 10 kWh (plus solar) and you can take your house off the grid.

Let’s get an understanding of what battery sizes look like on the opposite end of the spectrum. The largest lithium-ion battery installation in the world, located in Escondido, is 120,000 kWh.

Large-scale energy storage projects are astronomically expensive to build. Batteries cost somewhere around $250 per kWh, this means the giant installation in Escondido cost 30 million dollars. These are conservative numbers, the final cost of building a complete energy storage system are actually much higher. The land alone might cost 30 million dollars. Or you can forget these calculations and just know that California’s major utilities have mandates from the state to install a certain amount of energy storage by 2020, and the spend will be in the billions.

So here comes the aha moment. The collective kWh of all the electric vehicles in California today amounts to over 112 Escondido installations! But wait, it gets even better. California Governor Brown signed an executive order to achieve 1.5 million zero-emission vehicles on the road by 2025. 1.5 million electric cars is the equivalent to an absolutely staggering 625 Escondido installations! Think about this for a moment; if you multiplied the world’s largest energy storage installation by 625, that’s how much battery power will be driving on California’s roads by 2025.

Electric vehicles represent a massive untapped resource of distributed energy storage.

It will start with parking lots. High volume. Densely packed. Predictable occupancy. Let’s say a shopping mall’s 7,000 parking spaces were reliably occupied with 10% electric cars. That’s 35,000 kWh, bigger than the battery currently powering an entire island in Samoa. Or how about San Diego’s Qualcomm stadium? If 10% of its 19,000 spots were occupied by electric cars, we’re at 95,000 kWh, surpassing the size of the 2nd largest lithium-ion installation on the planet. As more smart parking lots get built, the more the grid will begin to rely on them. Eventually, there will be a tipping point in which enough electric cars are parked in smart parking lots in any hour of the day to fully satisfy the grid’s energy storage needs.

The person who develops the technology to connect electric cars to the grid as a distributed energy resource will be an overnight multi-millionaire.

The physical infrastructure for a smart parking lot is not as complicated as you might think. If a developer was building a parking structure, they would lay a network of wires in the ground connecting each parking space. There would be a cable for the car owner to plug into their vehicle, which they are already accustomed to doing. These cables would all feed into a series of components like inverters and voltage regulators, then connect to the grid. This would hardly present a challenge to the construction companies and electrical contractors who already build parking lots. Even from the utilities’ point of view, there is nothing exotic about this, it’s just another large-scale energy storage installation.

where the overnight multi-millionaires (or billionaires) will be made

The uncharted territory, and where the overnight multi-millionaires (or billionaires) will be made, lies in the blockchain, smart contracts, and algorithms that control it all. A LOT of factors that I’ve skipped over the need to be taken into account. Who will write the software giving your car the intelligence to buy and sell energy while you’re in the mall buying yoga pants? How are car owners compensated? What percent of their battery are owners willing to designate for energy storage services? How full is the average battery when it enters the lot? Are all electric cars capable of exporting energy? How does it work when the utility needs to push energy, rather than pull it? If the car owner doesn’t have a cheap source of electricity to fill their battery, such as solar, does this make financial sense? If not, will these parking lots be empty when it’s overcast? Qualcomm is only guaranteed to be full on certain days a year. Mall parking lots are empty at night (maybe not, stay tuned for my future blog on the Secret Life of Self-driving Cars).

These questions need to be answered before utilities will see smart parking lots as a reliable source of energy storage. In the meantime, there is already a financial case for these lots, which will eventually provide the proof the utilities need to see. Qualcomm stadium might power its lights using the electric cars parked in its lot, or the mall might use its collective energy storage to avoid demand charges. Maybe joining as a ‘member’ of a smart parking lot network means you can pull into a lot and charge your battery at a discount from the cars parked around you. Put solar on the roof and the financial picture gets even brighter.

Instead of paying a parking meter, it will pay you.

In a few years, you’ll forget that you once had to pay to park. Smart parking will quickly become the new norm. You’ll come to expect 10% off your purchase because you parked in the mall’s smart lot. Instead of paying a parking meter, it will pay you. It might not feel ‘free’ since you may park your car with a full charge and return to half a tank – but energy storage works in both directions, you are just as likely to park with half a talk and return to a full battery. Your car will be smart enough to only engage in a transaction if it’s profitable (see my last blog on the Internet of Energy).

If you’ve always felt destined to be one of the world’s 1,810 billionaires but didn’t know where to start? This is it. There are only a few people working on it, well, prior to this blog anyway.