Financial Cost-benefit Analysis of Vehicle-to-Grid charging of Electric Vehicles at Schiphol Airport

Abstract

Global warming has increased societal awareness and the use of renewable energy, leading to the gradual replacement of fossil fuel vehicles with electric vehicles (EVs). To earn revenue, reduce electricity outages, increase grid stability, and incentivize the switch to EVs, parked EVs can discharge electricity into the grid through Vehicle-to-Grid (V2G) technology.

Transport hubs like airports are ideal for V2G projects due to their many parking spots and long parking durations. To determine financial feasibility, Cost-Benefit Analysis is a commonly used tool to compare two situations or cases. However, there are no CBA studies done on V2G in transport hubs like airports, presenting a significant literature gap.

This study hence analyzes the financial feasibility of a V2G project at Schiphol Airport using Financial Cost Benefit Analysis (FCBA) and risk analysis. The study aims to determine the conditions under which the project is commercially feasible by looking at the Benefit-to-Cost ratio, and at associated risks that might impact the success of such a project.

The analysis covers a seven-year period from January 2024 to December 2030 and is based on profit maximization theory. Key costs include V2G chargers and fees paid to EV owners, while benefits include revenue from electricity sales and carbon credits. The study compares a Base Case of expanding unidirectional EV charging with a Project Case of implementing bidirectional V2G charging. Results indicate that frequency regulation provides a Benefit-to-Cost ratio greater than one, making it the most viable method for generating revenue. Falling charger costs and a minimum V2G utilization rate are found to be crucial for the project’s financial feasibility.

The conducted risk analysis identifies potential challenges and propose mitigation strategies. The main risks include the potential unwillingness of grid operators to pay for FFR services and low adoption rates of V2G among EV users at Schiphol Airport. To mitigate these risks, the study suggests collaborative efforts with grid operators, awareness campaigns to educate EV users, and government support to incentivize V2G adoption. Given that the project's financial outlay is less than 1% of Schiphol Airport's annual infrastructure budget, the study concludes that the project is financially viable despite the identified risks.

Future research areas include using proprietary data from Schiphol Airport to enhance the accuracy of the study, particularly regarding parking and charging patterns of EVs. This research provides valuable insights into the V2G ecosystem as it is the first time a cost-benefit analysis is being conducted for a V2G project at a transport hub. It supports V2G’s application at transport hubs and paves the way for future real-life projects.