Vehicle-to-grid charger provider expands to distributed energy software

Vehicle-to-grid charging companies are quickly becoming software platform providers as the U.S. power grid adds more sources of distributed generation.

The shift is being accelerated by a confluence of factors, including generous tax credits for electric vehicle chargers and battery storage and a growing desire among consumers to actively participate in electricity markets, said Claire Broido Johnson, COO of Fermata Energy LLC.

"We have very much been a hardware company historically," Broido Johnson said during an interview at CERAWeek by S&P Global. "Moving forward, we are the software."

Founded in 2010, Charlottesville, Va.-based Fermata Energy was the first North American vehicle-to-grid, or V2G, company to receive a certification for bidirectional charging technology from UL LLC, a global safety and inspection firm. Fermata Energy started with the Nissan Leaf because that was the first EV model with bidirectional charging capabilities. But now the company is looking to form partnerships with other U.S. automakers while expanding its relationships with electric utilities.

"We have always been focused on providing vehicle-to-grid services, and we developed the first UL 9741-approved bidirectional charger in order to be able to provide these services," Broido Johnson provided in a follow-up email. "Now that the charger industry has caught up with us and many companies are bringing bidirectional chargers to market, we are able to concentrate our efforts on expanding our industry-leading V2X software platform."

The market opportunity for V2G services is massive, said Broido Johnson, who co-founded the solar energy services firm SunEdison Inc. in 2003. Johnson was also a U.S. Department of Energy official in the early Obama administration, where she helped scale renewable energy and efficiency programs with $11 billion in American Recovery and Reinvestment Act of 2009 funds.

Anna Demeo, Fermata Energy's chief product officer, noted the existing U.S. EV fleet amounts to roughly eight to 10 times the dispatchable capacity of stationary storage resources.

"Even if you only convert a small portion of the residential fleet today — small light-duty vehicles and trucks — you're going to get the storage capacity you need to decarbonize the grid," Demeo said on the sidelines of the weeklong energy conference.

'Wheels or no wheels'

Equipping vehicles to share power with the grid is just "one puzzle piece" of the virtual power plant equation, Broido Johnson said.

Virtual power plants, also known as aggregations of distributed energy resources, or DERs, are decentralized networks of medium- and small-scale generation and storage resources. They can prove especially valuable during extreme weather events by responding to changes in system demand.

The Inflation Reduction Act passed last year included a 30% investment tax credit for residential battery storage systems and extended a 30% EV charger credit through 2032. On Feb. 13, the U.S. Treasury Department released proposed guidance that clarified bidirectional charging technology can qualify for $10 billion in tax credits dedicated to advanced energy projects.

Demeo noted that Fermata's software platform is designed to manage broad arrays of DERs. "It really gives you the ability to manage any number of aggregated distributed energy resources, wheels or no wheels," she said.

That capability is expected to become crucial as regional grid operators implement a Federal Energy Regulatory Commission rule that opened wholesale power markets to DER aggregations. The regulation, Order 2222, required grid operators to develop market rules that allow DERs to provide all of the services they are technically capable of, such as energy, capacity and ancillary services.

Utility partnerships

Electric utilities such as National Grid USA, Eversource Energy and Xcel Energy Inc. are already deploying Fermata Energy's chargers.

At the Burrillville Waste Treatment Center in Rhode Island, Nissan Leafs have individually earned more than $4,000 per summer over two years by sending power back to the grid. Nissan Leafs at electric scooter company Revel's Brooklyn, N.Y., warehouse are also using Fermata Energy chargers to supply power into the Consolidated Edison Company of New York Inc. service territory.

Broido Johnson noted demand response rates throughout the U.S. are rising as utilities and regulators seek to encourage more customer participation during grid emergencies. Rhode Island, for example, is offering a $300/kWh demand response rate in the summer months.

Broido Johnson added that the company also sees compelling rates in California, Colorado, Connecticut, New Hampshire, New York and Massachusetts.

Fermata Energy announced a $40 million Series A funding round in January 2022 led by the Carlyle Group. Its existing investors include Skyview Ventures LLC, I Squared Capital LLC and ClearSky.

Looking forward, "it's all about partnerships," Broido Johnson said. "We're working with as many [automakers] as possible, working with as many charger manufacturers as possible, and really standardizing our software platform so that we're not just managing vehicles."

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