In May this year I joined Fermata Energy, a startup based out of Charlottesville, Virginia. While we are a small group (for now), there is something about our team that motivates me like never before. Maybe it’s Fermata’s vision paired with the diverse backgrounds from private and public sector in areas such as academics, environmental policy, electric vehicles, fleet management, and investment banking. Or maybe it’s the simple fact that our business model will potentially have a significant impact on the automotive and energy industries as well as on governments.
So, what does Fermata Energy do? Let me try to give you the condensed version. We are commercializing Vehicle-to-Grid (V2G) technology. We tend to use V2G as a generic term because it is one that is more commonly known, but our technology is really “V2X.” The “X” can represent many things, an example is “V2B”or vehicle-to-building. Most importantly, to start, you need three things for Fermata Energy’s V2G technology:
Once these components are installed on a customer’s site, Fermata Energy’s operations management system continuously analyzes and executes optimal V2G monetization opportunities available given a fleet’s logistic operating schedule. Essentially, V2G systems allow EVs to earn money while parked by utilizing their large batteries to provide energy storage services for buildings, utilities, and the grid. Fermata uses this extra money to reduce the total cost of ownership (TCO) of EV’s. In some cases, V2G systems can pay for an entire vehicle.
Because V2G systems can generate revenue and savings, the TCO of EVs drop compared to similar gasoline-powered engines. For example, as we found in a recent analysis we conducted, it is possible for a municipality that is paying in the $17 per kW range to save about US$4,100 in demand charges per charger and vehicle. Of course, that would increase if that site had more vehicles. To put that into perspective in terms of TCO, at that savings over the useful life of most government-owned vehicles, V2G services would not only pay for the charger, it would pay for a significant portion of the vehicle. This is extremely attractive to government and corporate fleets looking to EVs as a strategy to reduce GHGs and air pollution.
We are redefining the standard fleet definition of utilization, typically seen as the number of miles, hours, or frequency a vehicle is driven over a period of time. The thought that the value of utilization could be greater when the asset is parked rather than driven at certain times had never even entered my mind as when I was a fleet manager. But, Fermata Energy is doing just that – redefining utilization. We have discovered in our own analyses that many vehicles are parked 90-95% of their life. If you are maximizing your current utilization 5-10% of the year, great work, but isn’t the thought of transforming an EV into a more versatile asset intriguing? It is for many government and corporate fleets, and this is where we see the growth of EVs really taking off in addition to the consumer market.
Eventually, we see V2G being available in your own driveway when your vehicle is plugged in at home. In fact, this technology has been available for years in Japan through Nissan’s “Leaf-to-Home” system. The concept is quite simple, charge at night when energy is cheaper and discharge it into your home when it’s more expensive during the day. Grid operators will also benefit from this eventually with mass adoption because it will alleviate the need of peaker plants to come online during peak demand events. Fermata Energy is also exploring ways to turn your vehicle into a “drivable generator.”
Think about the potential opportunity and savings here: no need to maintain small generators at $1,000+ a pop, no need to deploy them before or after a storm, no need to fuel them during a storm, no need to collect them after a storm, and the threat of theft of this small units would be eliminated. As an example, Fermata Energy’s solution could allow government-owned EVs to drive up to a device that has lost power, for example an intersection, plug in the EV and resupply power. Certainly, using the EVs to power a building is another option.
Right now, Fermata Energy is partnering with government and commercial fleets. These fleets are typically part of a larger organization that may own several large buildings with high energy consumption and that makes them a good fit for V2G. Second, use of their fleet vehicles typically occur within a normal work week, resulting in significant availability for grid services. And third, most organizations like these will always look for ways to maximize dollars spent. Governments are a lot more innovative than the general public realizes and they are looking for opportunities to leverage technology to help improve operations and save money. They are realizing that V2G storage and services will help them do that.
Facundo Tassara is Director of Fleet Business Development for Fermata Energy with more than 17 years in the automotive sector, including managing municipal fleets.