The Role of Electric Vehicles in Grid Stability: A Deep Dive into the V2G Market

Vehicle-to-grid (V2G) is a technology that provides electric vehicles (EVs) to form a two-way association with the public power grid. The innovation of V2G makes it possible for EVs to not only utilize electricity from the grid but also recharge the framework in case power is abundant within the vehicle’s batteries or in case there is high energy demand. The increment in sales of EVs around the world is projected to be a considerable factor in the development of the vehicle-to-grid (V2G) market.

Besides, the V2G innovation incorporates many benefits for the end users. This is often made possible by the fact that the EVs and the power grid have a bidirectional energy stream. The shift towards EVs is gaining force around the world primarily since it helps decrease carbon emissions. It is, subsequently, not surprising that the developing popularity of EVs and EV-oriented innovations is anticipated to fuel the development of the V2G sector in the coming years.

In its report on the trends in EVs globally, the International Energy Agency (IEA), an international organization reported that the sales of electric cars in different countries for instance, developed countries like China were very high, selling an estimated figure of 6 million cars in 2022 which increased to 8.1 million sales value in 2023 and up to 10.1 million sales in 2024. In the same vein, in 2022, the number of electric cars sold in Europe and the USA was about 2.7 million and 1 million respectively, which increased to 3.2 million and 1.4 million sold in 2023 in Europe and the USA respectively. In 2024, about 3.4 million total EV sales were recorded in Europe while in the USA about 1.7 million.

Additionally, in various countries, governments advocate for the deployment of V2G and its associated technologies in the existing energy grid through incentives, regulatory policies, and investments. Smart grid systems and advanced metering infrastructures are being built to facilitate such usage. For instance, the funded project by the UK government known as Vehicle to Grid Britain (V2GB) strives to find out the relationship between the geographic spread of EVs and V2G technologies which needs many battery units of electric cars to support the energy system in the UK.  Emphasis is placed on key aspects such as the possible revenue generation of over £400 per year from a 7kW V2G residential charge point, prices reducing to below £1000 by 2030 to remain competitive, and cost benefits of £200million for investment in cumulative distribution networks and £40-90 million annually in GB by the year 2030.

There is a growing acceptance of V2G technology in the world, and this technology enables vehicle owners to earn passive income from electric companies, while power companies utilize energy from the batteries of EVs during demand time to avoid power deficits or brownouts. For example, in February 2024, Octopus Energy launched the V2G program known as the Octopus Power Pack, the first of its kind in the United Kingdom that comes with free electric car charging for drivers. The initiative is intended to speed up the transition of the nation to green transport and an average user of electric cars saves over 850 yearly on this service in comparison to a normal variable tariff.

Figure 1:  Increase in Sales of Electric Cars in the World, in Million, in 2022-2024

Source: International Energy Agency (IEA)

In addition, it is estimated that the Asia Pacific region will have a substantial share in the V2G market enfolding EVs in grid stabilization, which will primarily be due to increasing government policies and funding on EVs and V2G implementation. The emerging Asia Pacific region incorporates one of the largest and the most growing EV markets in the world with several developed and developing countries such as China, India, Japan, Vietnam, and Malaysia, and several others witnessing development in the EV industry which has resulted in increased energy and power demand in the region.

The Asia Pacific region is ranked among the largest regions carrying out vehicle electrification at the global scale with a large portion of EVs manufactured and consumed from Asia commencing with China, followed by India and Japan.  Development of important networks necessary for the functioning of EVs is witnessed in these countries which is further expected to accelerate several EV-centric technologies such as V2G, V2H, and V2X. According to the Malaysian Green Technology and Climate Change Corporation, total sales of electric vehicles in Malaysia increased in 2023 reaching a growth of around 286% when compared to 2022. The number of EVs that were registered and sold in Malaysia in 2023 was approximately 10,159 vehicles, while it was only 2,631 vehicles that were sold back in 2022. Also, the International Trade Administration of the USA stated that the number of registered EVs in Taiwan increased from about 7,064 in 2021 to 16,106 in the year 2022. Moreover, this organization indicated that in 2022, approximately 3.4% of all new vehicle registrations in the country were for EV passenger cars.

Key Developments:

Year	Development
November 2024	Nuvve Holding Corp. partnered with Las Cruces Public Schools in New Mexico and successfully commenced the deployment of its first-ever electric school buses with vehicle-to-grid connection (V2G) technology. The development is a big step towards growing the EVs in schools with the assistance of Nuvve and their platform is even due for rapid growth in the transport sector electrification.
June 2024	Toyota and Pepco conducted studies on V2G systems for battery electric vehicles (BEVs) in Maryland. The partnership focused on bidirectional charged power generated technology with redistributive capabilities that allow charging of the BEV and even provision of electric power back to the grid. This enhances energy reliability, and resilience, assists in better integration of renewables, and even helps in lowering energy tariffs. The partnership also focused on consumers’ EV ownership and use with the intent of encouraging the installation of V2G systems.
May 2024	Tata Power Delhi Distribution Limited, a prominent power utility in North Delhi, entered into a Memorandum of Understanding (MoU) with the India Smart Grid Forum for setting up a V2G Technology Demonstration Project. The purpose of the pilot project is to demonstrate the key components in the operation of EVs with the grid, to promote low-carbon transportation and energy systems.
November 2023	Blink Charging UK unveiled the new EQ 200 advanced charger technology set to be used in the UK and Ireland. EQ 200 is a V2G-enabled scalable bi-directional charging solution intended to facilitate the establishment of a robust EV charging ecosystem and bridge the gap between fixed charging and more active, renewable energy management. It consists of Bluetooth, Wi-Fi, and Ethernet connection, as well as 2G and 4G enabled to communicate with load balancing systems and intelligent energy management systems enabling the V2G and VTX, where the vehicle can communicate with everything.