How BMW is driving smart energy strategies

How BMW is driving smart energy strategies

BMW recently convened a group of transportation, electric vehicle (EV) and energy thought leaders in Silicon Valley to participate in a dialogue with their senior executives about sustainability, energy and mobility services. The discussion also focused on V2G (vehicle-to-grid) integrations pondering new smart grid convergences with sustainability principles.

BMW's guiding view is that sustainability along the entire value chain is inseparable from their corporate self-image. The company has been systematically reducing energy use in facilities through energy-efficient materials, products, and processes; and in vehicles through use of regenerative energy technologies.

The production facilities for its electric BMW i cars will incorporate renewable energy. Industrial plants and processes are major electricity consumers.  Adding renewables to their energy mix reduces reliance on fossil fuels, and in Germany, helps address the looming retirement of that nation’s nuclear fleet as well.  Co-located generation with consumption also reduces the need for build-outs of the transmission infrastructure and eliminates the energy losses that would otherwise occur in long distance, high voltage transmission.

All of these activities merit commendation, but the discussion group's consensus was that creating programs that encouraged BMW dealerships to adopt renewable energy production and energy–efficient building technologies and processes would be an even more powerful means to visibly demonstrate commitments to sustainable practices.

Since many of BMW's customers fall into the affluent and green categories, rooftop and parking lot solar installations and energy-efficient lighting could reinforce the brand’s image -- and particularly with the new all-electric BMW models. BMW doesn’t own dealerships nor their real estate, but some outside-of-the-box thinking combined with that strong corporate commitment to sustainability could yield surprising innovations.

For instance, car manufacturers, like GM, have become financial institutions to structure car loans for customers. Could BMW create their own green bank to help dealers finance renewable energy and/or energy efficiency investments? Could they help dealers in specific states like California, which continue to enhance building codes for energy-efficient operations, with guidance on how to leverage technologies to save electricity costs?

There are no easy answers, and BMW has to make money at the end of the day, so any programs targeted to dealers have to show some positive impact to the corporate bottom line.  However, helping dealers save money on operating costs by reducing energy use does contribute to the corporation’s sustainability philosophy and brand values.

However, there's another possibility for BMW to consider that integrates the principles of sustainability with their business models and has direct benefits to grid modernization. EV batteries are depleted over time but still have potential for other energy storage applications once their useful auto life is over. Community energy storage (CES) and home energy storage can potentially repurpose used EV batteries for supply during localized power outages to deliver grid resiliency. Used EV batteries could also supply electricity to homes during peak times to reduce grid loads and improve grid reliability. One electric utility, AEP, has already piloted community energy storage with used EV batteries.

There are many more questions than answers about repurposing EV batteries, and several studies are focused on providing those answers. A car manufacturer like BMW could think about batteries from a complete sustainable product lifecycle (cradle-to-cradle) perspective, and use battery technologies that have not only the best performance for autos, but the best performance for home energy storage or CES use.

Beyond battery technology itself, there’s a need to determine the best business models to cost-effectively repurpose EV batteries.  Could BMW innovations extend beyond sustainable product design to sustainable business models for repurposed EV batteries that create compelling economic value for their EV customers, dealers, utilities and help deliver grid resiliency and increased reliability?  It’s an intriguing thought.