19 Mar, 2021
Vehicle-to-grid (V2G)
2 mins read | CEF Explains
Electric vehicles can act as decentralised storage units to integrate intermittent renewable generation


The target share for renewable energy (RE; solar, wind, small hydro, biomass, and waste to power) in India’s power system is 40 per cent by 2030, with a total installed capacity of 450 GW (Ministry of New and Renewable Energy, 2020). With growing RE penetration, discoms are facing challenges such as the high balancing costs of intermittent RE and an increased need for greater system flexibility. To mitigate these challenges, there has been a recent shift towards innovative RE procurement models and the deployment of grid-scale battery storage in many parts of the world. With annual sales projected to reach 23.6 million units by 2029–30 as per the CEEW Centre for Energy Finance, electric vehicles (EV) can play an important role in solving grid integration challenges (Vaibhav Pratap Singh, 2020). 

EVs can act like decentralised battery storage units, which if aggregated intelligently, can help integrate intermittent RE by helping balance power during peak demand hours. A vehicle-to-grid (V2G) system enables EV users to allow the grid to discharge the battery if required (to balance a spike in local demand). The user is typically compensated in the form of lower EV charging rates or with direct payment for electricity fed into the grid. V2G entails two-way communication, bidirectional flow of electricity, and the use of intelligent technologies to minimise the electricity supply–demand mismatch. 

EV users could be incentivised to charge their vehicles during the day, when solar energy is plentiful. This can be made possible through the use of workplace EV chargers that take advantage of vehicles that remain parked and idle for long durations. In the evenings, when electricity demand peaks (typically between 6–11 p.m. in India), and solar energy is not available, users can plug in their EVs to a V2G charger located at or near their homes. These V2G chargers would feed into the grid, thereby helping meet the peak demand. 

With a nascent electric mobility market and amid an ongoing energy transition, rolling out and scaling V2G in India requires the following enablers.

Retail tariff design

Time-of-use tariffs, which vary throughout the day, may be implemented to nudge consumers to charge their vehicles during low tariff (off-peak) hours and supply to the grid through V2G during high tariff (peak) hours.

Public charging stations

The successful implementation of V2G in India also depends on the creation of an adequate public charging infrastructure. Low home ownership rates in Indian cities mean that a substantial portion of V2G charging needs to be carried out at public charging stations.

V2G for key market segments 

EVs in India, primarily commercial four-wheelers and two-wheelers, are projected to generate nearly 158 GWh of battery storage demand by 2029–30 (Vaibhav Pratap Singh, 2020). Therefore, given the Indian context, V2G technologies and business models catering to these market segments need to be developed.

Relevance and impact

  • Real estate operators, such as office buildings and metro operators, can balance out demand variations through V2G and avoid the additional costs associated with higher demand charges.
  • Discoms may benefit immensely from V2G, which can enable demand-side management (e.g., flattening the load curve) and the lowering of flexibility or grid integration costs.
  • Consumers need to be incentivised to allow their vehicles to be used as battery storage by the grid. This is expected to further improve the economic viability of EVs.
  • V2G can provide operating backup for renewable energy and may also facilitate ancillary services in the future.

Who should care about V2G?

  • EV charging point operators
  • Electricity distribution companies
  • Real estate owners/operators


CEF Analysis” is a product of the CEEW Centre for Energy Finance, explaining real-time market developments based on publicly available data and engagements with market participants. By their very nature, these pieces are not peer-reviewed. CEEW-CEF and CEEW assume no legal responsibility or financial liability for the omissions, errors, and inaccuracies in the analysis.
Filled under: Electric Mobility , Energy Storage , Renewables , Solar Energy
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