Plug-in hybrids are exciting not only because they can reduce the cost (financial and environmental) of driving, but also because they could potentially lower the cost of powering a home and strengthen the power grid.

This "vehicle to grid" (V2G) application of plug-in hybrids was a frequent subject of discussion during the first day of the Rocky Mountain Institute's Smart Garage charrette (workshop). The V2G scenario enables consumers to lower their utility bills by "time shifting" (somewhat like a digital video recorder) power from when it is cheap to produce to when it is more costly to consume. Enacting V2G when the first PHEVs hit the street requires that the lithium ion batteries being developed now will be ready to both store and share energy.

RMI -- as well as many charrette participants -- believes that using a vehicle's battery outside of providing power for locomotion can create positive value for vehicle owners and grid operators, whereas the "dumb" connecting of PHEVs to only receive power from the grid may not benefit owners and could increase electricity prices for everyone.

The V2G model of intelligently storing and using energy makes plug-in hybrids more attractive to consumers, according to Mujeeb Ijaz, Director of Automotive Applications engineering at battery maker A123 Systems.

I asked Ijaz if it would be best for lithium ion batteries -- which are currently in their first PHEV road tests with automakers -- to be used initially as a grid resource, or if it would be better to limit their use to transportation. He emphatically said that the batteries will be ready to go for the full V2G application when PHEVs start shipping in 2010.

"The more we can add value the easier it is for them to justify the purchase," he told me. PHEVs may cost $10,000 more or higher than today's comparable hybrids, so even paying 75 cents per gallon of gas equivalent when riding on battery power may not provide a fast enough payback.

Ijaz said that using his company's batteries on a daily basis to send power to the grid would not degrade performance or reliability. Heat (in the form of the average temperature) and the shelf life "are much more critical issues to battery performance," he said.

But Ijaz admits that fast charging (10-15 minutes for a full charge) of lithium ion batteries is a much greater technical challenge. The battery chemistry can't support it. He added that a 200 mile all-electric driving range is "not plausible" because the batteries would be too big.

Auto industry insiders, however, had quite a different view of the state of battery technology today, and of the desirability of employing V2G uses when plug-in hybrids arrive.

Britta Gross, General Motors Manager of Hydrogen and Electrical Infrastructure Commercialization, sounded shall we say, skeptical, of Mr. Ijaz' rosy picture of lithium ion batteries' capabilities. Gross said "we need 10 years to understand batteries" before automakers would be willing to support cars being used as power plants. "Let us collect data on battery performance," including understanding durability, safety, and collisions, before moving to V2G, according to Gross. "Theoretically we can do all of this -- in ten years it's a no-brainer. But right now, none of us want to step up to more responsibility or risk. There's just no way," Gross said. "We can't afford to mess this up... [If there's a problem] We may never recover in getting these vehicles (PHEVs) on the road."

Similar sentiments came from another auto industry insider who did not want to be identified. During a conversation about creating the PHEV market, he said that battery technology was the greatest limiting factor, and that automakers wouldn't fully invest until the technology is solid -- something that he says hasn't happened yet. Also, during a brainstorming session about what would be making news in 5 and 10 years on the PHEV front, several participants offered examples of battery failures that could sink the market. In addition to positive accomplishments (eg. national electrical standards, higher vehicle fuel economy), batteries could catch fire and raise insurance premiums, and electrical problems that occur as power is moved to and from vehicles could prompt a charging ban from utilities.

So while V2G could be the surest path to plug-in hybrid adoption, not everyone is ready to go along for the ride.

(See all of our plug-in hybrid/grid integration content here)

(Chart courtesy RMI)