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Driving Change

The next tool in the climate toolbox: Your parked EV

John Wheeler, CFO of Fermata Energy, pictured near the company's technology in Brooklyn, New York

John Wheeler, CFO of Fermata Energy, is pictured near one of the company's smart chargers in Brooklyn, New York. Photo by CJ Clouse

This article was adapted for Mobility Weekly, our free weekly newsletter. Register for a subscription here.

The cathedral of a structure that houses the Newlab technology center is large enough to build navy ships in. It stretches across 84,000 square feet and rises 70 feet into the air on steel beams that support a ceiling made of glass. Located at the Brooklyn Navy Yard on the banks of New York’s East River, several generations of workers did, in fact, build ships and submarines for the U.S. Navy here, from 1801 to 1966. 

Today, tech entrepreneurs research, design and build all kinds of things inside Newlab’s shared workspace and "hatchery" for socially oriented tech manufacturing — from smart indoor farms to all-weather, four-legged robots. What I came to see, though, is sitting outside in the parking lot: a 2021 Nissan Leaf Plus with a 62-kilowatt lithium-ion battery, connected by a charger cable to a metal box that contains a bidirectional charger. The charger belongs to Fermata Energy, a Charlottesville, Virginia-based startup that has developed software that enables the electric vehicle’s battery to supply energy to the Newlab building towering above it. 

"Literally right now, this car is helping to power that building," said John Wheeler, Fermata’s chief financial officer, who’s been keeping an eye on the system on his laptop. "It’s not powering all of it, but a portion of it to help reduce electricity costs." 

The software in use at Newlab monitors the building’s electricity consumption to avoid demand charges, costs that kick in when usage rises above a certain threshold. When the building’s consumption climbs above the line that triggers the charges, the Leaf’s battery jumps into action, providing enough power to bring the usage back down to the base price. 

"Most cars are parked 95 percent of the time," Wheeler told me. "So our mission is to give a car something to do while it’s sitting there, so the owner can get the most value from it."

Founded in 2010, Fermata aims to accelerate the adoption of EVs and renewable energy in the United States in essentially three ways: by incentivizing EV ownership through lower electricity costs; by offsetting the rise in energy demand that will come as increasing numbers of electric vehicles plug in to recharge; and by supplying a portion of the energy storage necessary to make the transition to renewables possible. 

Most cars are parked 95% of the time. So our mission is to give a car something to do while it’s sitting there, so the owner can get the most value from it.

The company’s smart charging technology includes vehicle-to-home (V2H) capabilities, which allows EV drivers to power their homes during a blackout. V2H also gives households that pay "time-of-use" electricity rates the opportunity to save money, by powering their home with their EV battery during peak demand hours, generally evenings between 4 and 11 p.m., then charging the battery overnight when electricity rates go down. 

But even more important to Fermata’s mission is the software’s vehicle-to-grid (V2G) capabilities, which enable an EV hooked up to a bidirectional charger to go beyond powering the owner’s home or office building and actually return energy to the grid, essentially turning the car’s battery into backup storage that an electricity utility can tap during periods of high demand. 

Giving back to the grid

This ability will be crucial in the future to both alleviate stress on the grid and balance out supply and demand, according to energy analysts.

RMI has estimated that one in four cars and one in seven trucks on U.S. roads today need to be electric by 2030 to reach the country’s emissions reduction goals. Another challenge lies in how that demand ebbs and flows throughout the day. If most EV drivers are plugged in during the day or early evening hours when electricity consumption is at its highest, the system could easily become overloaded.

"So let’s say I make an agreement with the utility that, every night between 6 p.m. and 6 a.m., they can stop and start charging my EV whenever they want, as long as I'm fully charged at 6 in the morning, every morning," Britta Gross, managing director of RMI’s Global Carbon Free Mobility Global Program, explained. "This gives a utility the enormous capability to say, for example, ‘I want to stop all these vehicles in my network from charging right now, for the next hour, because demand is high and the wind’s not blowing.’ It’s the ability to take this very large load of electric vehicles, the smartest and most flexible load to ever hit the grid, and put them to use." 

V2G capabilities are already used in parts of Europe and Asia but, as with just about everything renewables- and EV-related, the United States is trailing behind. 

That’s because, from a technical perspective, V2G requires three elements: an EV with bidirectional capability; a bidirectional charger; and software that allows vehicles to communicate with the utility and supply power as needed. The latter two haven’t been readily available in the U.S. until now.  

This is where Fermata, which has dubbed its technology "vehicle-to-everything" or "V2X," comes in. It also explains why this software company ended up building its own bidirectional battery. It’s a complicated and technical story about bidirectional standards and the communication systems that allow EVs and chargers to talk to each other, but it boils down to this: It was easier to just do it themselves. 

"We're not in the charger business. We don't want to be in the charger business," David Slutzky, Fermata’s CEO and founder, told me. "I needed a [bidirectional] charger, and I talked to everybody on the planet that made chargers and spoke English, French or Spanish, and I couldn't convince anybody that V2X is real and imminent. So I ended up finding a small tech startup that was a spinoff from Virginia Tech, just down the road from us. And we entered into an agreement for them to develop a charger for us. Our charger is good enough for these early deployments, and we will continue to make them until better chargers come along."

Judging by the announcements from car manufacturers and charging companies, they don’t have long to wait. 

Fermata Energy's technology at a Nissan Futures event

Fermata Energy's technology featured at a Nissan event. Photo courtesy of Fermata Energy

 

2022: The year bidirectional charging becomes a thing

The first mass-produced EV with bidirectional charging abilities, the Nissan Leaf, remains the only one available — for the moment. After hitting the market in 2010, Nissan later introduced the Leaf’s V2H charging system in Japan in the wake of the country’s 2011 earthquakes. But Nissan’s V2H system remained a Japan-only technology for the next decade, and being that no one else was producing and selling bidirectional chargers for the U.S., American Leaf drivers have yet to take advantage of the capability.  

But things on the bidirectional charging front are about to change in the U.S., starting this year. 

Spain’s Wallbox, for example, expects to start selling its latest bidirectional home charger, the Quasar 2, which will have both V2H and V2G capabilities, in North America in the fourth quarter of 2022, the company confirmed in an email. 

On the car end of things, Volkswagen has said its EVs will have bidirectional charging capabilities, perhaps before the end of the year. And the new Hyundai Ioniq 5 and Kia EV6 will also support the tech.

We probably have 20 systems now across the U.S., many of them at commercial sites, making real money for the customer.

The big one, though, is the Ford 150 Lightning pickup, which as of this spring will be the first vehicle widely available in the U.S. that can directly integrate with your home’s electrical system. 

According to the U.S. Energy Information Administration, average U.S. electricity consumption is 32 kilowatt-hours (kWh) per day, although it varies a lot by state. The latest generation of EV batteries can hold roughly 60 kWh of energy, or enough to provide back-up power to an average U.S. household for two days. With its 98 kWh, the F-150 can fully power a home for up to three days, or as long as 10 days if electricity is rationed, according to the automaker. Ford has also said that it plans to introduce a smart V2G system in the future.

Perhaps not uncoincidentally, Fermata was one of five startups chosen by Ford in October to participate in the inaugural cohort of the Mobility Studio, a program at Michigan Central, a new mobility innovation district the automaker is developing. 

Fermata also recently got some good news on the funding front. In January, private equity firm Carlyle committed more than $100 million in joint funding to energy developer NineDot Energy and Fermata. 

Jumping in fleets first

The company has an existing partnership with NineDot and electric ride hailing startup Revel, and will soon be testing its V2G system in New York City. The initial pilot will include three chargers attached to three Leafs that will supply nearly 50 kWs to the grid managed by electric utility Con Edison, enough to power 50 homes. 

This is just one of a number of demonstration and pilot projects that Fermata has partnered on with various fleet owners around the country, including Danville Utilities in Virginia, the city of Boulder, Colorado, the Alliance Center in Denver and Green Mountain Power in Vermont, Wheeler said. 

"We probably have 20 systems now across the U.S., many of them at commercial sites, making real money for the customer," he said.

Indeed, a 2020 case study by E Source on Fermata’s demonstration project with Danville Utilities and technology company EIT, its first such project, found that Fermata’s system and just one EV could potentially save EIT as much as $1,900 annually in utility bills.

More recently, over the summer, Fermata teamed up with climate infrastructure startup Electric Frog Company, which provided a Nissan LEAF for a pilot at the Burrillville Wastewater Treatment Facility in Rhode Island. The project used energy stored in the car’s battery to help offset peak electrical loads at the treatment facility and on the grid itself as part of National Grid’s ConnectedSolutions program. The program was designed to reduce demand charges for homeowners who agree to connect their thermostat, solar system or home battery system to the grid. This pilot represented the first time a customer-owned EV had participated. 

The utility pays $300 per kWh for as many as 60 "peak energy demand events" between June and September. Fermata’s technology helped offset peak demand 27 times for a total of 57 hours over the summer in Burrillville, and Electric Frog received a cool $4,200 from National Grid. 

"These results help to give us confidence that electric vehicles can be a reliable partner in providing a clean and resilient electricity grid for the future," John Isberg, vice president of customer sales and solutions at National Grid, said in a statement.

"There's a couple of reasons why we started with fleets," Wheeler told me. "One is they do have access to large buildings with lots of power. Another is that typically fleets are 9 to 5. There are municipal fleet cars that are parked all the time, because city government needs to have plenty of capacity. But even the ones being used are parked by 3 or 4 o'clock. And it's the same in every county, every city in America."

Combined public and private sector fleets made up a total of roughly 8.14 million vehicles in 2020, and fleets are leading in EV adoption. On the government side, cities from Boston to Seattle have committed to electrification; New York alone accounts for 30,000 owned and leased vehicles, all of which the city plans to convert to EVs by 2040. Likewise, President Joe Biden has called for a 100 percent electric federal fleet — which comprises a whopping 657,000 cars, sport utility vehicles and trucks — and he started that process off by signing an executive order in December that requires all new light-duty vehicles purchased to be electric by 2027, and all federal vehicle acquisitions to be electric by 2035. On the corporate side, increasing numbers of high-profile companies with large fleets are committing to electrification, including Amazon, FedEx and Hertz. 

In other words, with bidirectional charging capabilities, future electric fleets could potentially feed a whole lot of power into the grid, and much of it just in time for evening peak demand.  

This will be especially interesting to cities and states that have committed to transitioning to renewable energy, which will require a significant buildup of battery storage capacity. Producing those batteries will be costly both in terms of dollars and in terms of natural resources. This makes all of those EV batteries — which essentially come free with the vehicle — sitting there in parking lots doing nothing look like an even more desirable resource.   

Still, fleets represent only a fraction of the 276 million vehicles registered in the U.S. The vast majority of these belong to individuals or families. 

Wheeler said Fermata hopes to begin testing its technology in homes toward the end of this year, or perhaps next year. But the company still has a long way to go in terms of commercialization, and how quickly it gets there will depend on the speed of adoption of bidirectional EVs and chargers.

Beyond that, there is no consistent set of regulations for vehicle-to-grid integration; every state has its own mix of rules or lack thereof. And electricity in the U.S. is supplied by a patchwork of more than 3,300 utilities — some investor-owned, some government-owned and some cooperatives — each governed by different policies and needs, which makes the benefits of owning a bidirectional EV and V2G charging system highly localized, and the business of predicting any future payoff tricky.  

"In every local community, you've got utilities and grid operators who will have to decide what grid services they value and what they are willing to pay for these services, so it's going to differ," Gross said. "And that's where the analysis and evidence out there has been insufficient. You'll see really aggressive analyses that say, ‘This is going to be worth $50 a month for any vehicle plugged into the grid — and implying that this is true nationally.’ Well, the jury's out on that."

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