Vehicle to Grid
Assessing barriers to upscaling Vehicle to Grid in the
Netherlands
Ernst Koppen
11797614
28-5-2021
Professors: Katinka Wijsman & Jannes Willems
Word count: 8.120
Abstract
The Netherlands is facing an energy transition that requires a shift from non-renewable natural gas to renewable energy sources. In the context of urban climate mitigation, the vehicle to grid innovation is designed to make car batteries a flexible asset. Electricity from car batteries is used more efficiently, as discharging them helps to stabilize peaks in demand.
This paper aims to explain the vehicle to grid innovation in the Netherlands as well as investigate various possible socio-institutional barriers that arise in the process of upscaling V2G from an idea to an integrated system. The upscaling process is scientifically backed by the MLP theory on transitions and the SNM model that is derived from it. By using a combination of qualitative content analysis and semi-structured in-depth interviews, data was gathered to map out the different barriers. The results clearly show the principal barrier to large-scale integration of V2G, which is a long standardization process. This barrier exists out of multiple smaller barriers that concern laws, regulatory aspects, and financial factors.
Table of Contents
1. Introduction ... 4
2. Theoretical framework ... 7
2.1 Vehicle to Grid & Smart Charging ... 7
2.2 Multi-Level Perspective ... 10
2.3 Upscaling & Socio-Institutional barriers ... 11
2.4 Strategic Niche Management ... 13
2.5 Where does V2G stand? ... 14
2.6 Actor analysis (current regime) ... 16
3. Methodology ... 17 3.1 Content analysis ... 18 3.2 Interviews ... 18 3.3. Coding in Atlas.ti ... 19 3.4. Possible Biases ... 20 3.4 Operationalization ... 21 4. Results ... 22 4.1 Market barriers ... 23 4.2 Legal Barriers ... 24 4.3 Financial Barriers ... 26 5. Conclusion ... 27 6. Discussion ... 28 7. Bibilography ... 30
1. Introduction
The human-induced climate change as a consequence of excessive carbon emissions is a problem that is of global concern (Haines & Patz 2004). In order to combat climate change and mitigate its warming effect, many countries in the world have signed the Paris Agreement in 2016, including the Dutch government. (Sterl et al., 2016). By doing this, goals were set to reduce global CO2 emissions. To achieve these goals, different strategies on urban climate mitigation have been introduced. One of the strategies to reduce CO2-emissions is the increase in the use of electric vehicles (EVs). EVs are considered the most promising alternative to internal combustion engine vehicles towards a cleaner transportation sector (Casals et al., 2016). It is a major technological transformation in the way societal functions are fulfilled (Geels, 2002). Therefore, the shift from vehicles with an internal combustion engine towards EVs is considered a technological transition.
Problem Statement
However, the adoption of electric vehicles into the market has affected various fields significantly, among which the power grid, as the demand for energy increases rapidly (Yong et al., 2015). The increasing penetration of renewable generation in electricity markets as well as the rising number of electric vehicles pose new challenges for transmission grids. Additional demand and regionally clustered energy generation force system operators to consider costly expansion plans and employ expensive redispatch measures (Staudt et at., 2017).
The vehicle to grid (V2G) initiative can provide a solution. Both plug-in hybrid electric vehicles (PHEV) and regular EVs can act as controllable loads to stabilize the demand on the system during off-peak conditions and as a generation or storage device during the day to provide capacity and energy services to the grid (Guille & Gross, 2009). In this proposal, the term EV includes both PHEV and EV. Technically, V2G has been around for a while. It is currently a niche innovation that is experimented with on a smaller scale. A few initiatives have used the technology to store energy, and use this energy to provide households with it.
The use of V2G is slowly entering the phase of commercialization with off-the-shelf charging points becoming available on the European market (van Heuveln et al., 2021). This phase of commercialization allows the innovation to grow into the current energy supply market. This process is called upscaling. Upscaling is usually constrained by a range of factors in the wider context of the innovation, typically a context of interconnected urban socio-technical networks and institutions (Dijk et al., 2018). These constraining factors are also called barriers. Overcoming these barriers allows initiatives to be implemented on a larger scale.
Among these institutional bottlenecks are financial, legal and market barriers, obstructing V2G to be integrated in the Dutch EV-market. Consequently, this thesis is aimed at identifying the main barriers to this process of upscaling. Through this research, an answer will be provided to the main question: ‘what are the socio-institutional barriers to upscaling the vehicle to grid
concept in the Netherlands’
First, the theoretical framework will provide the reader with background information on the concepts that are used in the research question. Two theories are used to explain the developing process of a technological niche: the Multi-Level Perspective (MLP and the Strategic Niche Management framework (SNM). In the research this framework is applied to the case of V2G in the Netherlands to provide context to the upscaling process of V2G, as well as insight into the position of V2G relative to the current regime. Second, the methodology provides the necessary strategies that were used to gather and analyse the obtained data. Third, the results will show the most important barriers that prevent V2G from commercialization. Lastly, the discussion and conclusion section are used to reflect not only on the findings of the research, but also on its process.
Relevance of the research
Most of the globally produced energy sources utilize fossil fuels involving the emission of environmentally hazardous carbon dioxide and depletion of fossil fuel resources. This has added a major concern on the sustainable use for future energy requirements (Khan & Arsalan, 2016). Therefore, researchers and policymakers are confronting the challenge of restructuring energy systems into more sustainable forms (Kern & Smith, 2008). Since 2012, a new subsidy scheme caused an increase in the market share in photovoltaic (PV) energy in the Dutch energy supply system (Huijben, & Verbong, 2013). Simultaneously, a strong growth in sales of EVs in the Netherlands has occurred (Helmus et al., 2018). This combined growing interest in PV systems and EVs could be of great value, because EVs can be charged with renewable solar Photovoltaic power (Solar PV). Consequently, EVs can contribute to the integration of solar power in the electricity network via V2G systems (Van der Kam et al., 2018). However, during the large-scale integration of V2G within the current mobility network, barriers are encountered that reduce the pace at which these processes occur. Conducting research on identifying barriers to implementation of renewable energy in mobility systems in the Netherlands contributes to the scientific knowledge on this topic. Identifying these barriers is an essential step in the process of overcoming them, proving the societal relevance of this research.
Research gap & choice of scale
In the preliminary stage of this research, data was gathered to see what scientific literature was available on the rollout of V2G in the Netherlands. Although some scientific articles were found on managing interactions between EVs and the grid, the main focus was on the technical aspects of V2G, notably renewable energy storage, batteries, or load balancing to minimize electricity costs (Sovacool et al., 2018). Even though the technical aspects of V2G are essential to its integration, institutional aspects (e.g. legal, financial, market) are also considered highly important, and should not be left out. Because this research focuses on the socio-institutional barriers to V2G, it fills up the knowledge gap that exists on this topic.
The reason for the choice of a national scale based on multiple reasons. Because the field of V2G covers markets around the entire globe, it was impossible to map the entire field of V2G. It was therefore chosen to reduce the scale to a smaller market. The Dutch market was a logical choice as the chances of finding respondents outside of the Netherlands were small, especially within the short period of time that was available to conduct the research. A smaller scale, such as a regional or local scale, would not be logical because the market for V2G products and services, as well as the energy supply markets, are nationwide.
2. Theoretical framework
In the following section the theories and concepts that are used in this research are scientifically explained. This theoretical concept analysis first describes the researcher’s interpretation of the concepts of Smart Charging and V2G. Additionally, two theories from general transition theory are introduced: the multi-level perspective (MLP) and the strategic niche management model (SNM). The models provide a theoretical background to V2G, and help get a better understanding of the process of developing and upscaling new technological innovations. Subsequently, the concept of upscaling and the socio-institutional barriers are defined and elaborated on, and the SNM model is used to assess the current stage of development of the innovation. This is done by linking the five steps that the model comprises to V2G. Lastly, a table is provided with the most important stakeholders that exist in the current regime, that is, the energy supply market and the EV market. The table also shortly discusses the role of every actor in the system.
2.1 Vehicle to Grid & Smart Charging
The future solution for the fossil fuels scarcity, as well as to the environmental problems associated with their wide usage, will most likely involve an extensive use of EVs (Lopes et al., 2010). However, this poses challenges to power systems, as additional power demand is injected in the context of increasingly volatile supply from renewable energy sources (Daina et al., 2017).
Figure 1 shows the demand curve for grid energy. The shape of the curve can be best explained as a mismatch between production and consumption: electricity is generated by renewable solar PV installations during the day, and consumed during the morning and evening (Niesing, 2015). Every day, charging peaks occur as the majority of EV-owners charge their vehicle during morning hours (6 to 10 a.m.) and evening hours (3 to 9 p.m.) (Quiros-Tortos, Ochoa, Butler, 2018).
This situation is worsened by the presence of EVs that risk to overload the grid if they are charged at the same time (for instance during the evening, when users come back from work) (Niesing, 2015). This so-called congestion limits the amount of electricity that can be sent to and taken from the grid.
Smart charging of EVs allows customers and network operators to schedule EVs charging profiles. That is, Smart Charging seeks active control of loads and can be programmed with optimization or algorithms to control car battery loading (García-Villalobos et al., 2014). This means that Smart Charging deals with available energy resources and grid restrictions at each moment in order to minimize grid impact (de Haan, 2016). This will partly level out peaks in energy demand, because cars can be charged at times where energy production reaches its highest capacity. This has proven to be not only a valuable tool to stabilize the grid, but is also profitable for various actors, including EV users. Charging during a period of high availability of energy resources will lower the price of energy, and therefore lower the costs for EV users to charge the battery of their EV. Furthermore, researchers have acknowledged that V2G provides various other potential grid services: ancillary services, energy trading, back-up power and frequency regulation. Smart Charging can thus be considered a promising concept, but can even be taken one step further.
Sovacool & Hirsh (2009) elaborate on a possible way to solve this issue. V2G technology provides a solution to the increased electricity demand and the temporal shifting of demand peaks. Instead of only charging EVs, it is possible to create a bidirectional flow of electricity between the EV and electrical grid, adding the ability for EVs to not only store electricity from the grid, but also to give or sell it back at desirable times. In other words, EVs operate as vehicles when drivers need them, but switch to become power sources or opportunities for energy storage during peak hours, recharging at off-peak hours such as later
Figure 1: Up: Graphical overview of demand for energy due to increasing number of EVs. Under: Potential effect of V2G on this demand curve (Niesing, 2015).
at night (Sovacool & Hirsh, 2009). Figure 2 provides a schematic overview of the V2G concept. Multiple applications exist for V2G to be realized.
Figure 3: Why is V2G important? (Cenex, 2021).
V2G can be applied on a small scale, when EV drivers produce their own energy using PV systems, and store this energy in their EV to be used or sent back to the grid at desired times. Alternatively, V2G could be applied on a larger scale, making use of a larger fleet of cars in a car park. In figure 3, the most important benefits of the V2G technology are schematically displayed. Multiple benefits are mentioned regarding financial reward, technical advantages because of enhanced battery management, and stabilized power supplies due to a back-up power generation system.
2.2 Multi-Level Perspective
In general transition theory, the multi-level perspective is a theory that explains interactions of transition processes in society. Geels (2010) states that MLP distinguishes three analytical levels: niches (the locus for radical innovations, micro-level), socio-technical regimes, which are locked in and stabilized on several dimensions (meso-level), and an exogenous socio-technical landscape (macro-level). The different levels, as well as the dynamics between them, are schematically illustrated in figure 3. The landscape consists of a set of deep structural trends, and is considered an external structure or context for interactions of actors. While regimes refer to rules that enable and constrain activities within communities, the landscape refers to wider technology-external factors (Geels, 2002). In this research, different landscape factors can be defined, such as climate change, public awareness of energy issues, and high oil and gas prices. Landscape developments put pressure on the existing regime, which opens up, creating windows of opportunity for niche innovations (Geels, 2010).
The regime is defined as a semi-coherent set of rules, that is, mainstream activities, norms and structures, carried by different social groups. The regime in this study consists of multiple systems, such as the energy sector and the EV market, because V2G not only influences the current EV sector, but also brings about changes in the energy sector. Hence, factors such as energy generation, transmission infrastructure, regulatory infrastructure and incumbent actors (e.g. manufacturers, users, distributers) represent the regime.
Figure 4: Multi-Level Perspective (MLP) (Geels, 2002)
Niche innovations are emerging social or technical innovations that differ radically from the prevailing socio-technical system and regime, but are able to gain a foothold in particular applications or markets (Geels et al., 2017). Because these niches are protected or insulated from ‘normal’ market selection in the regime, they act as incubation rooms for radical novelties (Schot, 1997). Subsequently, innovations that are created in niches are further developed through a process of research and learning, during which networks and contacts are created. The MLP proposes that transitions, which are defined as regime shifts, come about through interacting processes within and between the niche, regime and landscape level. Transitions do not come about easily, because existing regimes are characterized by lock-in and path dependence, and oriented towards incremental innovation along predictable trajectories (Geels, 2010).
2.3 Upscaling & Socio-Institutional barriers
In the process of upscaling, innovations are integrated within the incumbent system. This process is called upscaling. Upscaling literally means: making greater in size or amount. Upscaling requires research, as it is important to gain knowledge on the best strategy to support this expansion. Urban experiments, like those concerning sustainable innovations, are often focused on small-scale performance tests and technology-user interactions, largely ignoring the
wider socio-institutional context (Dijk et al., 2018). In transition theory, these experiments are formed within niches of society. To enable a wide-scale integration of these innovative social innovations within the current system, upscaling is critically important (Naber et al., 2017). Therefore, upscaling within the context of MLP means spreading the innovation to other areas via changes in the socio-technical regime (Aalbers, & Sehested, 2018).
It is unlikely that a certain niche development is scaled up directly into the current system without encountering problems. These problems are called barriers. In general, barriers can be understood as physical or immaterial obstacles hindering, delaying or preventing access to a certain goal (Świgoń, 2011). They can delay the implementation of adaptation measures or exclude the issue from the policy process (Uittenbroek, 2013). These barriers have to be overcome in order to integrate the innovation within the incumbent system. In this research, the socio-institutional barriers are analyzed and discussed. Social institutions are embedded organized systems and societal structures that shape our actions and values. They range from political decision making to economic production and exchange, often strengthened by the law (Knight & Jack, 1992). The socio-institutional focus of this research covers a selected number of institutional factors, that were determined by studying various V2G literature documents. The factors that are analyzed in this paper consist of financial barriers, legal barriers and market barriers. These factors were chosen because they were found to have the most obstructive effect on the upscaling process of V2G.
Technological factors to upscaling were intentionally left out of the research question. The reason for this is the fact that many scientific articles have already conducted research on the existing technological factors, which means they would not directly add to the scientific relevance in this research. Furthermore, limitations in time to execute the research, as well as limitations in the word count, made it difficult to include technological barriers in this thesis.
Figure 5: Strategic Niche Management Model (Geels & Raven, 2006).
2.4 Strategic Niche Management
Strategic Niche Management (SNM) focuses on the processes that are formed between the niche and the regime. It is a framework that is derived from the MLP model, but aims at specifically shaping and evaluating the process from niche application of an innovation to mass market application. SNM focuses on concrete available technologies that are tested on a small scale (Harahap, 2014). V2G is a niche innovation that could make a successful transition. That is, a niche innovation that resulted in a structural change to the fundaments of the incumbent regime. V2G has the possibility to help bring about a regime change within both the existing energy sector and EV sector, by initiating shifts in their current practices.
SNM can be applied to the innovation. This makes it possible to structurally analyze the initiative and assess at which point in the process the innovation is currently located. This is done by using a model that is created by Geels and Raven (2006) (Figure 4). This schematic model gives an illustration of niche development from local, pre-experimental phase (1) until global niche (5). ’Local’ relates to experimentation in local contexts supported by local networks and generating locally applicable lessons. ‘Global’ refers to an emerging institutional
field supported by a network of actors that is concerned with knowledge exchange transcending local contexts, defending niche interests and interacting with the wider world (Raven, 2010). These five steps can be translated to the upscaling process of V2G. The first step requires for the current regime and landscape to inform on possible experimentation, and create expectations on the technology. Often, this happens in the form of small-scaled civil society projects.
Second, emerging local networks experiment with novel socio-technical configurations and learn how to make that configuration work within a specific context (Raven, 2010). Third, the lessons learned from the second phase, are now converted into more generic rules. In other words: the findings of the experiment are shared with actors that are interested in using the innovation (e.g. through the publication of manuals or an adaptation in policy and regulations) (Raven, 2010).
In the fourth phase, rules and networks that originated from the newly created innovation form a solid base for further experimentation by new actors, who no longer need to invent new applications (e.g. new municipalities interested in using V2G at a specific location, or car manufacturers that are looking to implement it in a new project).
This, in turn, may generate a new cycle of local re-framing and learning, aggregation and coordination (Raven, 2010). Subsequently, this cycle has to repeat over and over, until a solid institutional context is built around the innovation. Lastly, during the fifth phase of the development process, the innovation has become a strong and viable product, which is able to compete with existing regimes, or even change them.
2.5 Where does V2G stand?
The current position of the Dutch V2G market can be assessed by walking through the five phases of the SNM model. The beginning of the process is the provision of information by the regime and the landscape, to create expectations and interests for local actors to start experimenting with the innovation. V2G passed this phase already for a simple reason: it already exists.
V2G also passed the second phase of the SNM model, which requires local experiments to be supported by local networks. Although V2G is still experimented with, and cannot yet be regarded as a fully integrated system, actors on the regional, national and even global level (e.g. energy supply markets, EV producers and government institutions) are already supporting the technology.
The third phase, in which the lessons learned are transformed into generic rules that are used by the ‘global’ niche network, has just been passed. This can be concluded from the fact that worldwide charging protocols are already being experimented with: the CHAdeMO and the Combined Charging System (CCS) protocol are already produced in divergent ways across Asia, Europe, and North America (Kester et al., 2019; Cenex, 2021).
Currently the innovation has passed the fourth phase, where the rules and networks connected to the technology form a solid base for further experimentation. V2G is on the verge of integration in the current energy supply system (fifth phase). It has entered the cycle of re-framing, learning and coordinating which can be seen as the standardization process. As soon as all systems enabling V2G are standardized and operational, the technology will be applicable on a much larger scale.
2.6 Actor analysis (current regime)
The regime that is subject to change with the rollout of V2G in the Netherlands, consists of a combination of actors and institutions from the market for EVs, as well as the energy supply market. In the process of analyzing the development of a niche, it is not only crucial to define the niche and its context, but also the regime that it will affect. Hence, a table is provided in which the most important stakeholders within the upscaling process of V2G are discussed. The table also shows the role of the actors within the current system.
Table 1: Different actors in the regime.
Actor Relation to V2G
Original Equipment Manufacturer (OEM) Providing EV to customers. Controlling the degree to which EV connects with the CPOs charging infrastructure (use of identical charging protocol)
Charge Point Operator (CPO) Providing charging infrastructure to EV owners. Must guarantee that their charging infrastructure matches with EVs
Distribution System Operator (DSO) Maintaining medium and low-voltage networks. Performing congestion management to prevent temporary shortages in transport capacity
Transmission System Operator (TSO) Maintaining high-voltage network. Balancing system through primary, secondary and tertiary energy reserve markets
Municipality Providing public charging infrastructure
for EV owner. Controlling standards for charging infrastructure
3. Methodology
The following section provides insight into the methods for collecting and analysing data. Throughout this research, the choice of method is a deductive qualitative research design. Deductive reasoning is a theory testing process which starts with an established theory or generalization, and seeks to see if the theory applies to specific instances (Hyde, 2000). Qualitative research puts an emphasis on description and explanation, and makes it possible to describe phenomena in context (Taylor & Trujillo, 2001). It also enables the researcher to interpret processes and meanings and use theoretically based concepts to seek better understanding of the situation. The main purpose of this research is to systematically describe and explain the socio-institutional barriers to upscaling the V2G initiative. Therefore, a descriptive research question was selected. This was done through application of the five steps of the SNM model by Geels & Raven (2006) to the case of V2G innovation. The process of upscaling requires a niche innovation to evolve within a new context. Since V2G is considered a niche innovation, it is essential to determine the context in which the innovation has emerged. Based on the SNM model, the stage of the development process in which the V2G innovation is currently in, was explained. However, it is also important to describe the new context (existing regime) and its influence on the innovation, to assess possible barriers. Qualitative research seeks to embrace and understand these contextual influences on research issues like V2G, and is thus the preferred research method (Hennink et al., 2020).
Data for qualitative research is non-numerical, and can be obtained through different methods such as in-depth interviews, focus group discussions, observation, content analysis and visual methods (Hennink et al., 2020). For this research, all methods for data collection were considered. However, there were multiple limitations that caused certain methods to be ineffective. For example, due to a short time span of only three months in which the research needed to be conducted, and a limited word count of only 8000 words, the use of focus group discussions and observation are not suited to reach the desired outcome. Because of their emphasis on context, as well as the descriptive elements, both content analysis and interviews are seen the most viable option to gather data on this topic. Throughout this research, visual methods are also used to improve the quality of the data, and provide context to the text.
3.1 Content analysis
Qualitative content analysis is the main strategy for processing data throughout this research. Bryman (2004) states that qualitative content analysis is probably the most prevalent approach to the analysis of documents and that it comprises a searching-out of underlying themes in the materials being analyzed. Because this thesis has scientific foundations, most documents that were used to structure the theoretical framework and methodology are scientific articles about V2G innovation and transition theory. They were utilized to back claims or provide scientific relevance to the case. However, because V2G is a relatively new technology, and has not yet been implemented in the Netherlands on a large scale, the number of scientific articles that specifically examine the Dutch situation regarding V2G is currently insufficient. Therefore, grey literature is also used as a source of information.
This literature mainly consisted of reports from pilots and experiments with V2G in the Netherlands, such as SEEV4-city, Invade and Lomboxnet (Bons et al., 2020; Bierman, Kroon, van Loon, 2016). Furthermore, several news articles were used, as well as policy documents from the municipality of Amsterdam (Gemeente Amsterdam, 2020). The scientific documents and grey literature that are used for information are written by other authors and are thus secondary data. The documents undergo a surface scan to assess their usefulness. Documents that contain useful information that contributes to the thesis in a scientific way are saved and analyzed in order to extract further useful information.
3.2 Interviews
Another strategy for collecting data throughout this research is semi-structured in-depth interviews. Semi-structured in-depth interviews are considered primary data sources. It is the most widely used interviewing format for qualitative research. Semi structured in-depth interviews are generally organised around a set of predetermined open-ended questions, with other questions emerging from the dialogue between interviewer and interviewee (DiCicco‐ Bloom & Crabtree, 2006). Interviews are believed to provide a ‘deeper’ understanding of social phenomena than would be obtained from purely quantitative methods, such as questionnaires (Gill et al., 2008). In this research, a deeper understanding about upscaling the V2G initiative in the Netherlands was provided through interviews. Three experts within the field of V2G were selected and questioned. Initially, the selection of respondents was retrieved from the policy documents and reports on the V2G-pilots in the Netherlands that were analyzed. These experts are either researchers that are concerned with the development of electric vehicles and their integration in the Dutch energy supply network, or project managers and specialists of
companies that develop and consult on V2G-technology. This choice was based on their expertise on the topic. Both researchers and project initiators have a long history of working in the field of V2G, and have even successfully carried out V2G. Therefore, it can be concluded that the respondents have the knowledge and skills to provide sufficient information to answer the research question. Subsequently, the interviews were structured and transcribed, coded, and further analyzed.
Table 2: Respondents for interviews.
Respondent number
Organization Title
1 Resourcefully Project manager
2 University of
Utrecht
Postdoctoral researcher
3 Cenex Nederland Technical
specialist
3.3. Coding in Atlas.ti
The preferred software program to analyze and code both the documents and transcriptions of the interviews was Atlas.ti 8. After scanning documents for their relevance to the research, documents were adjusted and added to the program, in order to be coded. Atlas.ti helps researchers systematically analyze documents, as it keeps track of notes and codes that are assigned to specific data within the document. Coding is the process of analyzing qualitative text data by taking them apart to see what they yield before putting the data back together in a meaningful way (Creswell, 2015).
During the process of analyzing documents, relevant sentences that included information about barriers to upscaling V2G were assigned codes. The codes that were assigned according to both the documents and the interview data can be found in the table below. This made it possible to compare the data and retrieve useful information to answer the research question.
3.4. Possible Biases
It is important to reflect critically on the used methods for data collection and analyzation. It must be stated that these methods can be, in some cases, unreliable, because the selection process of documents and interviews can easily be biased. During this process, Google Scholar was used as database for finding documents on the topic. However, due to previous knowledge on electric mobility and the personal interpretation of the researcher, certain keywords were used, while other keywords were unintentionally left out. This might have caused a bias, which affects the findings in the documents.
Furthermore, it is important to reflect on the collection of respondents for the interviews. During this process, all respondents were derived from data sources that were selected by the researcher, which were found using a selection method based on chosen keywords. Hence, any information that came from the respondents originated from the same sources and might be biased.
Also, similarities among the respondents should be discussed regarding ethnicity, gender and age. All three respondents were of the same ethnicity and gender. The age of the respondents varied from 25 – 50 years old. Although there were differences in age, biases based on their similar gender and ethnicity are factors that must be taken into account when reflecting on the data gathering process.
3.4 Operationalization
During the analysis of the collected documents and interviews, different barriers were investigated. They were conceptualized into three different institutional variables that were considered the most important barriers to upscaling V2G: financial, legal, and market barriers. The importance of a barrier is based on two factors, namely the impact of the barrier on the rollout of V2G, and the time period in which they must be resolved to ensure successful integration of V2G. In the table below, the variables and the way they are operationalized represent the factors that define the socio-institutional barriers, while the indicators are used to measure these barriers. Even though many barriers are located at the interface of multiple variables (e.g. legal-financial barriers, financial-market barriers) they were categorized and subdivided among these three main barriers. This was done to create a more comprehensible structure in the results.
Table 3: Variables, operationalization and indicators.
Variable Operationalization Indicator Financial Barriers regarding high
costs for using V2G
High costs of products and services
Legal Barriers regarding legal factors
Laws and regulations / government policies
Market Barriers regarding the adoption of charging technology
Market mechanisms / incentives for OEMs / lack of data exchange
4. Results
In the following section the results that were obtained through the analysis of documents and interview transcripts are presented. The results below are categorized according to the market, legal and financial variables from the operationalization table in chapter 4. The barriers are ranked according to their impact on innovation, as well as the time in which they should be overcome in order to cause faster integration of the innovation. This ranking is visualized through in figure 6.
4.1 Market barriers
As Acemoglu, Gancia, & Zilibotti (2012) state: standardization is an engine of growth, as well as a potential barrier to it. This means that, although the standardization process is important to the improvement of a certain technology, it might also delay or even stop it from developing further. Respondent 3 labelled standardization as the overarching barrier:
‘Standardization. If you look at it on a big, abstract level, we call the most important barrier; Standardization. Right beneath it we find the adoption of the technology by the OEMs to be the most important standardization barrier.’
In the case of V2G, there are a few crucial barriers in this standardization process that delay the upscaling process of V2G in the Netherlands. These barriers are concerned with the market for EVs, in particular the OEMs that produce batteries for EVs. Car manufacturers have only recently started producing electric vehicles, and the market for EVs is relatively new. Some manufacturers have not even managed to make the transition from internal combustion engines to EVs.
The V2G innovation is part of this relatively new market, which causes huge delays in its development process. Among the car manufacturers that are engaged in the EV market, Nissan and Mitsubishi were the first to create a charging protocol that supports V2G: CHAdeMO. This charging protocol allows bidirectional charging using DC charging (Direct Current). DC charging requires for electric currents to be converted within the charging station. Another form of V2G is Alternating Current (AC) which converts the electric current inside the vehicle, instead of the charging station. Until recently, DC bidirectional charging was the most feasible option (Respondent 3). As a result, different OEM’s started experimenting with this method. At the same time however, more than seven other charging protocols were invented that support V2G. This caused the first and most important barrier to arise: standardization. To achieve a successful rollout of V2G, a universal charging protocol must be used by all OEMs (Respondent 2, Respondent 3).
Furthermore, apart from the adoption of DC charging, OEMs started working on the protocol CCS. This charging system allows the use of both DC and AC V2G. This means that CCS has a significant advantage in comparison to the ability to charge through DC charging alone. However, the development process of CCS currently causes a delay in the integration of V2G, as there are no commercially EVs available that make use of CCS (Respondent 3).
The barrier caused by the differences in charging protocols is worsened by strong lobbying characteristics that OEMs have. Respondent 2 elaborates further on this matter:
‘Logically, OEMs in the United States will lobby for their protocol to be adopted, which is provided by Tesla. On the other hand, there are German and French companies that will lobby in favour of their protocol. Last but not least, there is a Japanese protocol that will be supported by a lot of Asian OEMs. This raises the question as to who will win this lobbying game on charging protocols.’
Another barrier concerns a lack of data exchange between actors in the market. This data is of key importance to large-scale V2G integration, and consists of factors like the State of Charge (battery life), Time of Departure (at what time does the EV owner wish to leave with a fully charged battery) and charging capacity of the car. Actors in the V2G market must reach agreements on a safe and efficient way to exchange this data, so that the standardization process accelerates and further implementation of V2G can be realised (PwC, 2017).
Lastly, an important barrier is formed by the absence of necessity to implement V2G in the Netherlands. This is clearly explained by respondent 2:
‘At this moment, there is not enough reason to fully implement cars within our energy supply systems. There is overcapacity, and more sustainable energy will only cause more overcapacity. When I look at the bigger picture to determine at what point in time V2G could be a useful technology, this will be at an advanced stage of the energy transition. It will be when there are few coal and gas power plants and there are much more EVs available for energy backup and V2G services. That is my view on a perfect situation for the use of V2G and EVs. That point has not yet been reached, in my opinion.’
4.2 Legal Barriers
The current legal system that covers the market for energy production and EVs in the Netherlands forms a barrier to the integration of V2G. Various laws and governmental regulations have not yet been adjusted to the new situation. It is important to note that some of these regulatory barriers are also perceived as financial barriers. However, they are categorized as legal because they can be overcome by making amendments in the current legal framework. The most important legal barrier is the existing netting arrangement for using and selling energy
to the grid (Dutch: Salderingsregeling). This law facilitates the possibility for small-end users to virtually ‘store’ their energy on the grid.
The law was implemented to make the purchase of Solar PV systems more profitable, and thus stimulate the market for Solar PV systems. In the current situation, PV owners use energy from the grid, and also send energy back into the grid, for the same price per kilowatt-hour (kWh). Because a payment system does not yet exist, and because people are not able to directly use their own locally produced energy, the government implemented a law that allows PV owners to subtract this energy from their consumption. But the netting arrangement is very inconvenient for an application such as V2G. EV users that wish to sell back their energy to the grid, receive the same rate per kWh as when they charge their EV (PwC, 2017).
This causes a lack of incentive for EV owners to use their vehicle for temporarily storing energy, causing the netting arrangement to be a large barrier for further implementation of V2G.
There is, however, another regulation in the Dutch energy trading system that causes a lack of incentive for EV owners to make use of V2G. This is the so-called double energy tax. Due to this regulation, EV owners are obliged to pay taxes for every kWh that they charge their car with. In other words, every time the EV is discharged and charged again, they pay taxes. Respondent 2 adds to this this:
‘When you charge your EV at a public charging station, you pay around 50-60 Eurocents per kWh. A significant part of this rate is a tax. If you sell this taxed energy from your car back to the grid, you will never earn back these amounts of money, creating an unprofitable situation for EV owners.’
Because the double energy tax concerns legal and financial aspects, it might also be considered a financial barrier. Yet, the solution to the barrier is to make amendments in the regulatory system. Therefore, it was more suited to categorise this barrier as legal.
Lastly, the current inflexible supply system causes an important legal barrier. More specifically, this barrier concerns the small-scale trade floor for electricity. In 1990, the structure of the present energy markets was shaped. According to article 95a section 1 in the Dutch Electricity act, it is forbidden for end-users (EV owners) to supply other small-end-users directly, because this used to be the DNOs responsibility (Winters, 2017). V2G requires great amounts of energy to pass through the grid, causing problems with overcapacity on the grid (Winters, 2017). For the DNO to control this congestion through congestion management, a more flexible approach must be adopted with regards to the supply and demand
of energy. It would be more convenient for small-end-users to be able to supply directly to other small-end-users, but currently, this is legally prohibited.
4.3 Financial Barriers
Because the V2G market is relatively new, and the standardization process is still active, the products and services that are necessary to perform V2G are highly expensive. These financial barriers cause a huge delay in the upscaling process of V2G in the Netherlands. The most important barrier concerns the rollout of charging stations by CPOs. In the current situation, various connection capacities are available to connect EVs to the charging stations. The connections vary in amperage, which causes differences in the amount of time that is needed for cars to be fully charged. Charging stations with a high charging capacity are suited for performing V2G, as they allow cars to charge faster (PwC, 2017). However, the price for high-capacity charging stations that allow DC V2G is significantly higher than charging stations with a lower charging capacity. This price difference is mentioned by respondent 1 and 3:
‘If a charging station would cost no more than €2.500,-, and more than 50% of the EVs have the possibility to perform V2G…’ (Respondent 1).
‘A regular charging station costs around €2.000,-. Charging stations that are capable of performing DC V2G have much higher standards. They vary from €15.000,- to €20.000. Although they are being scaled up as we speak, which will cause a reduction in the price, we still have a large distance to bridge here’ (Respondent 3).
The large difference in price between a regular charging station and a high-capacity charging station causes a lack of incentive for CPO’s to invest in the rollout of expensive stations. CPOs will rather opt for a large amount of cheaper charging stations than for fewer, more expensive stations.
5. Conclusion
The next chapter will conclude the findings that were presented in Chapter 4 and present a final answer to the research question.
The aim of the research was to elaborate on the V2G technology in the Netherlands and investigate possible socio-institutional barriers that slow down the process of upscaling V2G from an experiment to successfully integrated system. The following research question was composed to explore the matter: ‘what are the socio-institutional barriers to upscaling the vehicle to grid concept in the Netherlands?’ By applying the methods, which consisted of a document analysis and interviews, multiple barriers were identified.
While standardization can cause innovations to grow, it can also stand in the way of it becoming implemented on a large-scale. Seeing V2G as an innovation, it was observed that standardization is currently the most important market barrier to large-scale implementation of V2G in the Netherlands. The role of the OEMs in this process is of crucial importance, since they directly manufacture the products and incorporate them in their vehicles and into the market. In other words, OEMs are responsible for the adoption of the technology that supports V2G. However, this adoption is slowed down by factors such as the existence of different charging protocols, a lack of data exchange and a lack of urgency for OEMs.
The legal barriers that form a barrier to V2G integration are linked to the services that are complementary to the V2G technology. Here, the main issue that was observed is the fact that most of the time, laws and regulations in the energy supply market lag behind the innovation. Legal frameworks, such as the netting arrangement and the Electricity Act, were formed in times where the market was different, and have now formed an obstacle to the faster developing innovation. This causes another main barrier namely a lack of financial incentives for different actors to participate or invest in V2G technology.
The principal financial barrier that was observed is also linked to the process of standardization. It concerns the high costs for DC V2G charging stations that are currently on the market. Few actors in the chain are prepared to invest in a product with such high costs, which makes large-scale rollout of V2G charging stations a difficult task.
6. Discussion
In the following section, the results of the research are discussed and compared to the theoretical framework and the expectations of the researcher. Subsequently, a reflection is provided regarding the validity of the research and the limitations to the methods that were used to answer the research question. Finally, some implications are provided that were derived from the results, and recommendations for future research on this topic are made.
Results
According to the beliefs of the researcher, the results provide a clear answer to the research question. The MLP framework that was incorporated as theoretical framework added a solid scientific background for the research and provided a coherent context to the regime and landscape factors relating to V2G. Nevertheless, the SNM model fell short in providing sufficient context to the upscaling process of V2G in the Netherlands. The elements that the model comprises were not specific enough to be applied to V2G.
The results only match the expectations of the researcher to a certain extent. The main barrier to the integration of V2G in the Netherlands was proven to be the process of standardization. This was definitely in the line of expectation, since all new technologies require standardization in order to be implemented on a larger scale. However, when the barriers to this standardization process are further analyzed, it becomes clear that many socio-institutional barriers are linked to, or possess a technical aspect. These technical aspects were intentionally left out of the research question and are thus not a part of the results. Yet, the technical factors are a crucial aspect of a technological innovation like V2G. Still, the outcome of the research is considered to both contribute to the knowledge on the Dutch V2G market and fill the research gap on the barriers of upscaling.
Reliability and validity
While reflecting on this research, some issues regarding the validity and reliability of it are discovered. The validity of this research can be questioned due to several factors. The first factor concerns the validity of the interviews. The method that was utilized for interviewing the respondents was a semi-structured method. During the interviews, not all respondents were asked the same questions. Therefore, it was difficult to compare the answers of the respondents to each other. Furthermore, the semi-structured interview method occasionally caused the researcher to guide the interview off-topic, so that the answers provided by the respondents became somewhat unrelated to the research question. Another factor that might affect the
validity of the research is the operationalization of the socio-institutional variables. Instead of making a categorization based on a selected number of institutional factors, a categorization based on the different actors in the regime might have provided more complete and all-encompassing results.
The reliability of the research can be questioned due to a limited number of respondents. Only three respondents were interviewed during the research. Even though the respondents provided useful information to answer the research question, more respondents would also have provided more reliable results. Additionally, no respondents were interviewed from the perspective of the OEMs, grid operator companies or the municipality. This might have added to more reliable results, as well as a more complete answer to the research question.
Implications for further research
Because this research did not take into account all barriers to the upscaling process of V2G, it can be concluded that more research must be conducted to map out the barriers and form a more complete analysis on the field of V2G in the Netherlands. Also, all respondents were asked the question whether V2G would be largely available in the Netherlands within the coming 10 years. They answered that they expect it to be possible, whether or not this would be on a smaller scale. They did, however, all inform me that a significantly fewer amount of barriers exist in the field of Smart Charging, and that Smart Charging must first be implemented, before V2G even has a change of succeeding. Therefore, it would be more valuable to conduct research on the integration of Smart Charging in the Dutch EV and energy supply markets.
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