Steering profitability: How electricity balancing regulations drive V2G feasibility in Germany

The increasing integration of intermittent renewable energy sources poses challenges in balancing electricity generation and consumption. The vehicle-to-grid (V2G) concept, which utilizes pools of electric vehicles (EVs) as both energy sources and storage units, offers a potential solution. By charging and discharging batteries as required by the grid, V2G can help maintain grid stability by matching electricity production and consumption in real time. These services are contracted in balancing markets. This study explores the economic feasibility of EVs participating in balancing markets by incorporating real energy data, driving patterns, and current technical parameters. The findings suggest that providing balancing services with EVs can be economically viable under the existing regulatory framework, though it was not under the previous one. Profitability increases with the amount of time a vehicle is parked at home and eligible for balancing, generating annual profits of up to 881 €. Users can further increase their profits by giving up some flexibility of their driving schedules if market conditions demand it. A broad range of sensitivity tests suggests that profitability is severely affected by battery degradation costs and adequate distribution network infrastructure. The study identifies key market design elements critical to the successful implementation of V2G systems.