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Working Paper #2011-21 – Can Vehicle-to-Grid Revenue Help Electric Vehicles on the Market
Department of Economics
University of Delaware
Working Paper #2011-21
Can Vehicle-to-Grid Revenue Help Electric Vehicles on the Market?
George R. Parsons, Michael K. Hidrue, Willett Kempton, and Meryl P. Gardner
Vehicle-to-grid (V2G) electric vehicles can return power stored in their batteries back to the power grid and be programmed to do so at times when power prices are high. Since providing this service can lead to payments to owners of vehicles, it effectively reduces the cost of electric vehicles. Using data from a national stated preference survey (n = 3029), this paper presents the first study of the potential consumer demand for V2G electric vehicles. In our choice experiment, 3029 respondents compared their preferred gasoline vehicle with two V2G electric vehicles. The V2G vehicles were described by a set of electric vehicle attributes and V2G contract requirements such as “required plug-in time” and “guaranteed minimum driving range”. The contract requirements specify a contract between drivers and a power aggregator for providing reserve power to the grid. Our findings suggest the V2G concept is mostly likely to help EVs on the market if power aggregators operate on pay-as-you-go-basis or provide consumers with advanced cash payment (upfront discounts on the price of EVs) in exchange for V2G restrictions.
JEL Codes:Q42, Q51
Keywords: electric vehicles, vehicle-to-grid, stated preference, latent-class model