Economic Dimension of Integrating Electric Vehicle Fleets in V2G-Enabled Cities in the Turkish mFRR Market: Scenario and Life-Cycle Cost Analysis

Abstract

Despite the ongoing electromobility revolution in urban areas, fleet managers still prefer combustion engines over electric vehicles. Fleet electrification can deliver tangible benefits not only for the urban environment but also for the company itself. However, this requires a robust economic and technical analysis approach. This study assesses the technical and economic viability of integrating electric vehicle (EV) fleets into the Turkish manual frequency recovery reserve (mFRR) market. Using a life-cycle costing (LCC) framework, three operational scenarios are modeled: Baseline (leased EVs without V2G), V2G+ (leased EVs with aggregator-based mFRR), and High Utilization (owned EVs with full V2G integration and increased rental activity). The baseline scenario assumes a net cost of USD 142,500 over 10 years, excluding revenue share. V2G+ reduces this amount to USD 137,000, generating an annual income of approximately USD 4400 from its share of the frequency reserve. A high utilization scenario, combining V2G with ownership and higher rental income, reduces the net LCC to USD 125,500 and generates over USD 12,000 annually, reaching breakeven around year 7. Sensitivity analyses show that the financial profitability of the system is significantly influenced by EV purchase prices, aggregator fees, mFRR capacity payments, and vehicle utilization rates. Adding a 30-50% solar-powered charging enclosure further reduces operating costs by up to USD 21,500, demonstrating the synergistic potential of integrating V2G and distributed photovoltaics. These results influence not only the priorities for electrifying the urban vehicle fleet, but also smart city regulations in the area of energy management, through the development of bidirectional charging standards and pilot implementation of V2G in emerging markets such as Turkey.