Source - Nagel et al V2G Nordic Balmorel 2024

Peer-reviewed journal article modeling V2G in the Nordic energy system using the Balmorel partial equilibrium model.

Title: Vehicle-to-grid in the Nordic energy system: A model study of impacts on energy system costs and electricity prices
Authors: Niels Oliver Nagel, Eirik Ogner Jåstad, Thomas Martinsen
Journal: Energy 293 (2024) 130729
DOI: (full journal article)
Funding: NeX2G project (Norwegian Research Council, Grant 320825) + ENABLE project (Grant 308789)
Scope: Norway and Denmark (5 Norwegian price regions NO1–NO5; 2 Danish price regions DK1, DK2); modeled for 2040 energy system

Method

Balmorel energy system model (open source, partial equilibrium) extended with an EV module. Two scales of V2G adoption modeled:

• Airport V2G only (small scale): V2G available only at major airport parking facilities across Norway and Denmark
• Home V2G (large scale): V2G available at residential charging; much higher technical potential

Key parameters: 90 kWh average battery capacity, 7 kW max V2G/G2V capacity, 93%/90% G2V/V2G efficiency, 80%/20% upper/lower SOC limits. No battery degradation costs included (limitation acknowledged).

Main results

System costs

• V2G reduces total energy system operational costs by ~3% across Norway and Denmark combined
• Operational cost savings primarily from substituting expensive peak generation
• Capacity investment benefits (likely larger) not modeled — represents a lower bound on total system benefit

Regional divergence — Norway vs Denmark

Mechanism: In Norway, hydropower is highly flexible and already provides cheap flexibility. V2G displaces hydropower storage — it does not add flexibility but rather fills the same role at higher cost, pushing up average prices. In Denmark, VRE (wind + solar) dominates and is inflexible; V2G provides the cheapest marginal flexibility to absorb VRE surplus and supply during peaks.

V2G use volume comparison: airport vs home

Airport V2G is economically negligible compared to home V2G. Even at premium profitability per unit (high price spread at airports), the volume is simply too small relative to residential home charging.

CO₂ emissions

V2G reduces system CO₂ emissions substantially (approximately −33% in scenarios with high renewable penetration) by reducing curtailment and peak fossil generation.

Prisoner’s dilemma / diminishing returns at scale

With large-scale home V2G adoption, charging prices for EV owners actually increase across all regions — because the surge of EVs all charging at low-price periods and discharging at high-price periods flattens the price duration curve, eliminating the low-price valleys that made V2G profitable.

• Individual incentive to participate remains (profitable at the margin)
• But collective outcome raises average charging costs for all EV users
• Result: a tragedy-of-the-commons dynamic where individual rationality degrades the collective benefit

This is a critical finding for policy: mandatory or heavily incentivized mass V2G adoption may be self-defeating in electricity price terms. The system cost benefit remains, but consumer financial benefit erodes.

Sensitivity analysis

Synergy with transmission: more cross-border transmission capacity increases V2G economic value — they are complementary flexibility mechanisms, not substitutes.

Swedish implications (not explicit in paper — wiki inference)

Sweden’s four price areas span both “Norway-like” and “Denmark-like” conditions:

• SE1 (north): hydro-dominated → V2G value similar to Norway; risk of price increase with high adoption
• SE2 (north-central): hydro-heavy → similar to Norway
• SE3 (central/south): mixed, import-dependent → intermediate, leaning Denmark-like during high-VRE periods
• SE4 (south): VRE-influenced + import flows → most Denmark-like; highest V2G value

This bidding-area divergence means the same physical V2G asset has different economic value depending on where the car is parked and discharged. Aggregation across SE1–SE4 will require area-specific dispatch logic.

Limitations

• No battery degradation costs included — understates V2G costs
• No V2G infrastructure costs (bidirectional chargers) — understates cost to achieve adoption
• Only wholesale electricity prices and grid tariffs considered; grid service revenues (FCR, aFRR) excluded — understates full V2G economic potential
• Airport V2G modeled as virtual aggregated storage — may overestimate airport V2G availability
• No intermediate adoption scenarios — only airport-only vs. full home V2G
• Commercial transport excluded

Key claims

1. V2G reduces Nordic energy system operational costs by ~3%
2. V2G is more valuable in VRE-dominated systems (Denmark-type) than hydro-flexible systems (Norway-type)
3. Large-scale V2G adoption flattens price duration curves, raising average EV charging costs — a diminishing-returns / commons problem
4. Airport V2G revenue is negligible relative to home V2G — the mass adoption case is residential, not niche locations
5. V2G and transmission capacity expansion are synergistic — not competing flexibility mechanisms
6. V2G supplies up to 55% of DK2 system load during peak hours at full adoption

Relevance

Most quantitative Nordic energy system analysis of V2G available. Directly informs the Vehicle-to-Grid › Nordic energy system context section. The Norway vs Denmark divergence has direct implications for Swedish bidding area analysis. Published in a leading energy economics journal — methodologically credible.