The challenge
Our customer, a global automobile manufacturer, engaged Wood Mackenzie to help uncover the best ways to extract additional value from car batteries through their integration into power grids, in both V1G and V2G applications. The company's intent was to formulate a scalable power market strategy and to better understand the various value (or revenue) streams.
The solution
To begin, Wood Mackenzie and the customer narrowed the study focus to six markets, comprising of both regulated and deregulated (ISO/RTOs) markets, with the highest growth potential for electric vehicles (“EVs”) or EV infrastructure. These markets were focal points for the diligence of both the retail, or “behind-the-meter,” and wholesale markets.
Wood Mackenzie outlined current or anticipated regulations broadly affecting US wholesale markets; and to appropriately capture retail market dynamics for each ISO, Wood Mackenzie conducted a literature review of EV infrastructure commitments, retail rate designs, policy incentives (existing and anticipated), and regional codes and standards.
Leveraging both the literature review and internal forecasts of EV penetration by market, including both vehicle and infrastructure development, Wood Mackenzie developed quantitative models to demonstrate the potential value of the car parc across wholesale markets (energy arbitrage, ancillary services, capacity) and retail markets (cost savings).
To complete the analysis, Wood Mackenzie provided a strategy for the client to not only most profitably enter the V2G market, but one that allowed the client to quickly scale / expand into new market areas.
The results
Ultimately, the quantitative analysis was used to inform the customer of an entry point for the broader corporate strategy framework to be replicated in several markets across the US.