Can Electric Vehicles Supplying Power to the Grid Really Solve Peak-Load Imbalances?(AI Translation)
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文｜财新周刊 余聪 赵煊
By Caixin Weekly’s Yu Cong and Zhao Xuan
7月12日下午，上海汽车创新港蔚来充电站内，蔚来汽车（09866.HK/NYSE：NIO）的能源业务专家向财新演示了纯电动汽车作为“移动充电宝”，向充电桩反向输送电力，即放电的全过程：一辆蔚来ET5通过20千瓦（KW）的双向充电桩向电网放电，该时段每千瓦时8积分奖励。积分可用于在蔚来商城购物，或者兑换充电等权益，10积分相当于1元。假设车主1小时放电20千瓦时，可获得160积分，相当于16元。
On the afternoon of July 12, at the NIO charging station in the Shanghai Auto Innovation Port, an energy business expert from NIO Inc. (09866.HK/NYSE: NIO) demonstrated to Caixin how a pure electric vehicle can function as a "mobile power bank," supplying power back to the grid through a process called discharging. In this demonstration, a NIO ET5 vehicle discharged power to the grid using a 20-kilowatt (KW) bidirectional charging pile. During this period, each kilowatt-hour (kWh) of power discharged earned 8 points. These points can be used for shopping in the NIO Mall or exchanged for charging credits, with 10 points equivalent to 1 yuan. Assuming a car owner discharges 20 kWh in one hour, they would receive 160 points, which is equivalent to 16 yuan.
“这是我们自己掏钱设置的激励，如果电网给我们钱，这个激励可以再提高。”上述蔚来能源业务人士告诉财新，蔚来在上海做了10座这样的双向充电站，拥有超过70根双向充电桩。但演示放电当天，财新没有看到其他车辆前来放电。
"This is an incentive that we funded ourselves. If the power grid provides us with financial support, this incentive can be further increased," an employee from NIO's energy business unit told Caixin. NIO has established 10 such bidirectional charging stations in Shanghai, with over 70 bidirectional charging piles. However, on the day of the discharge demonstration, Caixin did not observe any other vehicles coming to discharge.
这一模式被称为“车网互动”或V2G（Vehicle to Grid），基本模式是将电动汽车当作移动的储能设备，在电价低谷时段为其充电，在电价高峰时期向周边建筑或电网放电，由此，电动汽车可以利用峰谷电价套利，从而降低用车成本。对电网而言，则可以在固定储能电池之外，增加更多削峰填谷的工具，增加电力市场交易的主体。
This model is known as "Vehicle-to-Grid" (V2G). The basic concept is to use electric vehicles as mobile energy storage devices. They charge during off-peak electricity hours and discharge to nearby buildings or the grid during peak hours. By doing so, electric vehicles can take advantage of the price differences between peak and off-peak periods, thereby reducing the cost of vehicle usage. For the grid, this approach adds more tools to manage load balancing, supplementing fixed energy storage systems and increasing participants in the electricity market.
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- NIO Inc. demonstrated a Vehicle-to-Grid (V2G) system where a NIO ET5 vehicle discharged power to the grid using a 20 KW bidirectional charging pile, earning points redeemable for goods or charging credits.
- The V2G model leverages electric vehicles for energy storage, discharging during peak hours for grid load balancing, and has been backed by the "Implementation Opinions" from several national departments to achieve large-scale adoption by 2030.
- Challenges for the V2G model include high costs, battery life concerns, a need for standardization, and system integration, while pilot projects in places like Shenzhen explore the feasibility and commercial potential of the technology.
On the afternoon of July 12, at the NIO charging station in Shanghai Auto Innovation Port, Caixin witnessed how a pure electric NIO ET5 vehicle could supply power back to the grid through discharging, using a 20-kilowatt bidirectional charging pile. Each kilowatt-hour (kWh) of power discharged earned 8 points, convertible to shopping credits or charging points, with 10 points equivalent to 1 yuan. Hence, discharging 20 kWh in an hour would earn 16 yuan [para. 1].
NIO has established 10 such charging stations in Shanghai with over 70 bidirectional piles but did not observe other vehicles discharging that day. This system, known as "Vehicle-to-Grid" (V2G), uses vehicles as mobile energy storage, charging during off-peak hours and discharging during peak hours, assisting in load management for the grid [para. 2].
Proposed in the 2020 "New Energy Vehicle Industry Development Plan (2021-2035)," the concept found regulatory backing in January 2024's "Implementation Opinions" by several Chinese regulatory bodies setting goals for V2G, aiming for significant integration by 2025 and 2030 [para. 4][para. 5]. Industry experts believe that the value potential of newly added electric vehicles discharging to the grid could reach hundreds of billions of yuan annually, driven by scaling electric vehicle sales [para. 5][para. 6].
Meanwhile, the Chinese plug-in hybrid vehicle market is growing at a faster rate than pure electric vehicles but remains less suitable for V2G due to smaller battery capacities [para. 7]. NEVs, as mobile energy storage units, could also reduce wastage of renewable energy like wind and solar power, addressing issues of intermittent supply [para. 10].
Various regions, including Anhui and Chongqing, have already started issuing policies or exploring pilot programs to support vehicle-grid interaction [para. 11]. Despite this, commercial models and mechanisms for V2G interaction face bottlenecks, requiring robust pricing and market mechanisms, as well as standardized solutions [para. 12][para. 13][para. 14].
Financial incentives remain a crucial driver, with recommendations for subsidies to cover equipment costs for charging companies and car manufacturers, highlighting a 500 yuan per kilowatt subsidy, which could cover the equipment cost but exclude R&D expenses [para. 15].
Moreover, V2G is significant for power system balance and addressing peak demands, particularly in densely populated urban areas where the grid capacity limits the installation of charging stations [para. 16][para. 18]. Pilot projects like Shenzhen's Virtual Power Plant initiated in May are exploring V2G's feasibility, demonstrating its potential to alleviate grid pressures during peak times [para. 23][para. 24].
While "orderly charging" (V1G) is prevalent, bidirectional charging and discharging (V2G) is still nascent. However, V2G presents both electric vehicles and the grid with significant economic opportunities, promising remarkable monthly earnings and operational cost reductions for NEV owners [para. 27][para. 29].
Despite its benefits, V2G requires costly AC-DC conversion modules and high battery lifecycle standards. Most manufacturers have yet to actively promote this feature due to these technical and economic challenges [para. 30][para. 34][para. 35].
To fully commercialize, the vehicle-to-grid model needs harmonized policies and standardized technological protocols. Lack of established national standards currently restricts the scalability of V2G across existing installations [para. 38][para. 39]. Engaging in the broader electricity market would provide electric vehicles with diverse revenue streams, yet the disparity in trading rules across provinces remains an issue [para. 50][para. 51].
Ultimately, further reforms in electricity pricing and market mechanisms, along with investment in grid infrastructure and standardized solutions, are necessary for widespread V2G application [para. 55][para. 56]. Despite these challenges, V2G holds immense potential for China’s energy future, offering new growth avenues for automobile and charging station companies [para. 58].
- NIO Inc.
蔚来汽车 - NIO Inc. (09866.HK/NYSE: NIO) is demonstrating its electric vehicles' capability of Vehicle-to-Grid (V2G) technology, allowing cars to discharge power back to the grid. NIO has set up 10 bi-directional charging stations in Shanghai, offering incentives equivalent to 1 yuan per kWh discharged. This initiative supports grid balance and utilizes off-peak electricity for charging, potentially reducing operational costs through energy trading.
- StarCharge
特来电 - StarCharge, a subsidiary of Wanbang Digital Energy Co., Ltd., secured a global V2G charging infrastructure procurement deal with BMW Group in 2023. In Europe, where electricity prices are more volatile, BMW's V2G-compatible chargers from StarCharge provide an alternative to expensive home storage systems. However, this model is challenging to replicate in China due to low residential electricity prices.
- CATL
宁德时代 - CATL (Contemporary Amperex Technology Co., Limited) is involved in developing battery technology with extended warranties. In March 2024, they partnered with NIO to extend the warranty of their batteries from 8 years to 15 years without mileage limits, promoting more reliable participation in V2G (Vehicle to Grid) initiatives. CATL’s chief scientist, Wu Kai, advocates for V2G models with battery separation, enabling life-cycle management.
- China Association of Automobile Manufacturers
中国汽车工业协会 - The China Association of Automobile Manufacturers (CAAM) is mentioned in the article as the organization to which Liu Kai, the Deputy Director of the Technology Department and Director of the China Charging Alliance, belongs. They are involved in discussions related to V2G (Vehicle to Grid) technology and the integration of electric vehicles with the power grid.
- Star Charge
星星充电 - Star Charge has undertaken BMW Group's global V2G charging station procurement. Its parent company, Wanbang Digital Energy Co., indicates that BMW's V2G charging stations in Europe serve as a value-added service for EV owners, replacing costly home energy storage devices. However, duplicating this in China is challenging due to low residential electricity prices.
- Wanbang Digital Energy Co., Ltd.
万帮数字能源股份有限公司 - Wanbang Digital Energy Co., Ltd., the parent company of Star Charge, secured a global V2G charging station contract with BMW in 2023. While Europe's power price volatility makes V2G valuable, replicating such success in China is challenging due to lower residential electricity prices.
- BYD Co Ltd
比亚迪 - BYD Co Ltd (002594.SZ) is involved in the development of V2G (Vehicle-to-Grid) technology. The proposed warranty conditions for their Tang EV model include "6 years, 150,000 km + 500 V2G cycles." This indicates BYD's commitment to integrating V2G capabilities in their electric vehicles, allowing for electric vehicles to supply power back to the grid.
- As early as 2020：
- The interactive model between new energy vehicles and the power grid was proposed in the 'New Energy Vehicle Industry Development Plan (2021-2035)' issued by the General Office of the State Council.
- By the end of 2023：
- China had 20.41 million new energy vehicles, making it a world leader in new energy vehicle inventory.
- January 2024：
- Targeted industry policies for new energy vehicles finally came into effect, with the issuance of the 'Implementation Opinions on Strengthening the Integration and Interaction of New Energy Vehicles with the Power Grid'.
- March 2024：
- Anhui Province issued a notification titled 'Work Plan on Supporting the Integration and Interaction of New Energy Vehicles with the Power Grid'.
- March 2024：
- The Shenzhen Virtual Power Plant Management Center integrated 45 operators.
- As of early March 2024：
- NIO Inc.'s battery swap stations and storage batteries in the Beijing-Tianjin-Hebei region began participating in a power interaction initiative with State Grid's North China branch.
- End of March 2024：
- Anhui Province proposed supporting Hefei and Wuhu in creating national-level demonstration cities for vehicle-grid interaction.
- May 2024：
- Chongqing Municipal Economic and Information Technology Commission announced plans to enhance the integration and interaction of new energy vehicles with the power grid.
- May 2024：
- Southern Power Grid conducted a large-scale V2G trial in Shenzhen.
- May 14, 2024：
- South China Grid Electric Vehicle Service Co., Ltd. sent out an invitation to users to engage in 'orderly charging' and 'reverse discharging' as part of a grid load reduction initiative.
- May 15, 2024, from 1:30 PM to 2:30 PM：
- 53 new energy vehicles discharged power back to the grid in Shenzhen, and 1,420 new energy vehicles avoided peak charging times, shaving off 4,389 kWh from the peak load.
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