The Energy Storage Report 2024

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Volkswagen and Elli deploy second life BESS and target V2G energy market activity

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We talk to Elli Group, the EV infrastructure and utility arm of automotive OEM Volkswagen, about its new second life energy storage and energy trading ventures.

The company recently deployed a 560kWh second life battery energy storage system (BESS) in Baunatal, Germany, made up of batteries from its ‘e-up!’ range of EVs. It is also planning to monetise its network of EVs and charging infrastructure in the energy market, and recently launched its own electricity trading business to this end.

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The second life BESS will essentially be a testing ground for the digital energy trading platform, which in future will integrate Volkswagen/Elli’s fleet of EVs via vehicle-to-grid (V2G) and vehicle-to-home (V2H) technologies. Elli provides charging infrastructure and retail energy products to B2C and B2B customers.

Asked what it would take for these technologies to scale up, Ingo Müller, head of energy solutions at Elli Group, said: “From a technology perspective we are already there with V2G. It’s proven that you can use EV batteries to earn money via FCR (frequency control reserve) or intraday trading. The main issue right now is a regulatory one.”

“The smart meter rollout is still relatively low in Germany, for example, and to scale up V2G you need a larger share of users actively using a smart meter. In some other markets the penetration is higher and people are already taking advantage of flexibility products.”

“We also need better energy products to be sold to the customer. We need tariffs which both provide a relative amount of safety on what the bulk of your energy supply will cost, while also allowing you to earn from the flexibility of your smart appliances like your heat pump and your EV battery.”

Retail energy markets are generally not well-shaped to allow for the ‘prosumer’ model – where consumers generate as well as consume energy – which V2G/V2H entails, partially as a legacy of their past domination by larger power plants.

Volkswagen and Elli also plan to deploy more second life BESS but Muller said the scale it could achieve there is not yet clear as the technology is still relatively new, but that being a company involved in the entire lifecycle of a battery positions Volkswagen well within the space.

“There still isn’t a broad insight into the health of the batteries that are going to come back from the EV market. We will see them in the coming years and then know what we can do with them,” Müller added.

The launch of the BESS and trading business comes nearly a year after Volkswagen and Elli announced a collaboration with Elia Group, which owns one of Germany’s four large transmission system operators (TSOs), looking into the potential of V2G technology.

Volkswagen has also used BESS to increase the capacity and optimisation of its charging parks, including one in Saxony commisioned last year with a 570kWh system made up of pre-production models of its ID.3 and ID.4 compact EV.

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