Case Study

Case study: Vehicle-to-grid business model investigation

A global automaker seeks to extract more value out of its car batteries


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The challenge

Wood Mackenzie was engaged by a global automotive manufacturer 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, with the intent of formulating a scalable power market strategy and better understand the various value (or revenue) streams.

The solution

To begin, Wood Mackenzie and the client 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.

Current or anticipated regulations broadly affecting US wholesale markets were outlined; 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 and expand into new market areas.

The results

Ultimately, the quantitative analysis was used to inform the client of an entry point for the broader corporate strategy framework to be replicated in several markets across the US.

The client has requested follow-on work to further define and detail the corporate strategy prescribed in Wood Mackenzie’s initial work.

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