Using electricity cleverly

EV charging and smart homes: Boris von Bormann, CEO of Mercedes-Benz Energy Americas, lays out his vision for intelligent energy management systems.

Mr. von Bormann, Mercedes-Benz Energy Americas launched about a year ago in the U.S. What’s the vision behind the company?

Boris von Bormann: Mercedes-Benz Energy Americas was founded in April 2016 as an entity in Germany. We sprang out of the battery manufacturing for Daimler, looking at an alternative use for an automotive battery as a modern storage solution around the vehicle, from smart charging to intelligent energy management. At the moment, we have a modular residential system that’s a stackable unit with 2.5 Kilowatt-hours per module. It can be stacked up to 20 Kilowatt-hours at a home. You can combine it with an inverter and an energy management system in your house.

What does such a system allow me to do?

Many different things. The main application is solar self-consumption. Most of the time, we need energy in the evening, morning or during the night when solar systems don’t produce. Our storage system defers that generated energy to those times when it’s needed and raises the level of independence from the grid. Then you have applications such as time of use shifting. Since energy is more expensive at certain times than others, you can arbitrage. And finally, you get backup functionality so you can power your home for a certain period of time if the electricity goes out.

Boris von Bormann, CEO Mercedes-Benz Energy Americas

Are these systems something for early adopters or do they have mass appeal?

It depends on how you define mass. We see very significant adoption in combination with solar. In Germany, the majority of systems are sold with storage. In the US, it depends on energy costs, the regulatory framework for each state and each utility. The current market size is in the tens of thousands of systems—not in the millions, but also not in the hundreds.

How will the storage ecosystem evolve as more and more plug-in hybrids and fully electric vehicles hit the market?

Cars and the batteries in them obviously have a limited lifespan. At one point they come back to the shop, and the question is how do you ensure the optimal further use of those batteries? In some cases, they can be remanufactured and put back into a car, in some cases they need to be recycled. But we’re also looking at a big opportunity for secondary use of car batteries for stationary storage. We’re already seeing a small amount of batteries coming back from tests, pilots and electric car-sharing fleets. But starting around 2022 or 2024 and beyond, those returns will reach significant numbers as lots of vehicles will come off leases.

What kind of infrastructure does Mercedes-Benz Energy need to develop to put batteries into secondary use?

Repurposing car batteries for stationary storage has a positive ecological footprint, that’s why we’re looking at the entire value chain. We need new systems for logistics, repairs and remanufacturing. Storing a battery is not as easy as a drive train, which you can just stack in a warehouse. Batteries need to be hooked up to electricity and cycled regularly to keep them in good condition. That requires infrastructure, depending on the specifics of each market in Europe, the U.S. or China.

Tell us about the overarching vision that’s driving development in the energy storage and management market.

Obviously, we have Mercedes-Benz in our DNA, so we’re looking at how to best support the electric vehicle market. How do we support a switch from the combustion to an electric engine and make that a positive experience for the user? We want to make smart mobility greener and help with the transition to renewables. The details depend on your use case. If you have photovoltaics on your roof, you want to consume your energy and gain energy independence. If you are an electric vehicle customer, your needs will be slightly different. Your first question is how do I charge my car cheaper, faster and greener? The good news is that all those use cases will sooner or later overlap.

We want to make smart mobility greener and help with the transition to renewables.

Boris von Bormann, CEO of Mercedes-Benz Energy Americas

How many years are we talking about, five years?

No, that overlap is almost immediate. We have plug-ins on the road already, and you will definitely see more from us along with the launch of the first model of our new EQ brand, the EQC, which is coming out in 2019.
Once you have a higher penetration of EVs in the market, you will see a significant impact on the grid when everyone comes home at 6 and plugs in. You can solve it through storage because it gives you capacity, and you can solve it through managed charging depending on customer behaviour. If I know I don’t have to leave for the next three hours, the priority might go to someone else who needs to leave again in 20 minutes.

Such a scenario requires an intelligent management system where the house and the car know what the humans are doing next…

If you’re adding machine learning algorithms to user behaviour patterns e.g. with the integration of your personal calendar, the system understands human behaviour and improves the user experience by intelligent charging options. Just think of the possibilities by integrating smart assistants like Google Home or Amazon Alexa. People might have a smart thermostat that learns when you come home and that you want the house pre-cooled. In the future, those types of integrations will focus more on charging. From the utility side, that means intelligent grid management to allow capacity on certain circuits rather than others and managing that well.

What needs to be in place at my home to make that magic happen?

First, you have a charger for your electric vehicle, which is a big load on the home. That’s why you need a home energy management system as the brain that controls generation and to manage these loads efficiently. The ideal home has solar on the roof and a storage system in the basement or on the wall in the garage. The storage system will manage the schedule for the car, based on things like my calendar, the weather forecast and user input. Another big data source are the energy tariffs from the utility so you know when it’s cheapest to charge from the grid or might even sell energy into the grid. The key is that the total cost of this experience is brought down to a minimum. It will make it cheaper and more cost effective for the utilities to operate the grid and also for customers to draw energy. The customer needs a seamless experience without jumping into five different apps and ten different devices.

The customer needs a seamless experience without jumping into five different apps and ten different devices.

Paint a picture of what life will look like in the near future.

We have to make it as easy and transparent as possible to answer questions like: When and where do I need to charge, for how long and at what price? It’s all about bringing intelligence into the head units and navigation systems in the car to complement the insights into my energy status I get through an app or web interface. Take someone who lives in Southern California like I do. You charged your car overnight at home and are driving to work where you also have a charging station. Since the car knows your calendar, it can see that you have to drive to Las Vegas in the evening to be at a conference the next day. Now the system can calculate that it would be ideal to charge your car only up to 70 percent at work and then top up another percent when you get home but before you leave for the long drive to Nevada because it’s a sunny day and your storage at home is full. Of course, you don’t have to sit down with a spreadsheet to make that decision—all of those calculations are done for you in the background and you’re only presented with the best option which you can pick or override if you want to manage your energy more hands-on. Once you get on the road, the car will tell you where charging stations are along the way and which ones are either the cheapest or part of your service. Ideally, you should have one service package where charges show up on your mobile phone or home energy bill so you don’t have to deal with dozens of cards and accounts.

As promising as it sounds, will the average family be able to afford these systems?

It already is affordable. Most of these components are available today. If you’re a homeowner, there are financing and lease options for PV and storage where the cost of the system is less than what you’re currently paying for your energy. The wall charger is not that expensive, either. In the future, it will probably just be an add-on to the vehicle lease. The energy management system and the elements of a smart home are simply parts of the whole experience. We already have a partnership with Vivint Solar and Vivint Smart Home, the second largest solar company and the largest smart home company in the US with 1.3 million customers. Vendors like them offer complete smart home systems from the thermostat to the doorbell for around $60 a month.

If prices are already quite low, what hurdles to adoption do you see?

The real challenge lies in adding the smarts to all these components to understand and predict behaviour, as well as enabling communications between the different parts. You can buy a charger, a smart home system, a solar system, an EV right now, but they don’t work 100 percent together. The industry is looking at establishing standards for charging and connected IoT devices. We need standards, otherwise we have a situation like with our personal devices where you have to carry around a bag full of phone and laptop cables and chargers. Let’s say you buy a Mercedes-Benz and you decide to go with the full service offering by Mercedes-Benz Energy, which we are thinking about, you’ll have the advantage of an all-brand experience. You get more information, you’ll be more efficient and spend less. Because then you can have things such as geofencing, where the vehicle will alert your house that you’re approaching or reserve a charger, because it’s highly dedicated to the car and telematics. You have certain information about the battery that you wouldn’t get from an off-brand vehicle, and that will also allow you to charge faster and more efficiently.

We need standards, otherwise we have a situation like with our personal devices where you have to carry around a bag full of phone and laptop cables and chargers.

What about the millions of people who live in apartment buildings? Can they take advantage of the new electric-connected world?

Absolutely. If you’re looking at new apartment buildings, the awareness of solar is already really high. People are demanding on-site renewable energy generation from developers. We also see more storage and charging stations going into apartment buildings. But developers are always looking for cost savings, so a lot has to do with regulations, for instance having a certain quota of charging stations per apartment complex. As you see more EVs on the road, charging stations will attract people to move into one building over another. And even if you park on the street, you’ll be able to plug into a public charger. We are part of public infrastructure consortiums that will bring just that to market.

You mentioned that all these components should be part of a one-stop solution, even rolled into a car lease. Give us an idea of what future mobility plus smart energy management will look like.

You can add other mobility options to what we already discussed, such as shared rides and shared infrastructure. My family right now has two cars. In the future, we’ll probably have only one car, and the other car to go to work will be a shared or autonomous car. I foresee a mixture of shared rides on the weekends with a rental vehicle or direct exchange where you can use your neighbour’s car. The infrastructure that powers it will be more or less the same because you can create a shared community of energy. We could wrap even more things into a vehicle lease. Let’s say you configure your car and instead of picking a sunroof and sound system, you choose a wall storage and PV system that ships with your car. Or you simply pay $500 a month and you’ll get some kind of transportation method as part of your utility contract. Whatever fits your personal needs in the most efficient way.

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