China Seeks to Harness EV Fleet to Ease Strain on Power Grid

(Bloomberg) -- China’s economic planning agency is setting up a nationwide test of vehicle-to-grid charging to see if the country’s massive fleet of electric cars can be used to smooth out peaks and troughs in electricity supply and demand.   

Under the trial, all provinces will be asked to nominate one city to set up a V2G system — where electric cars can feed power back into the grid during times of high demand. The goal is to expand the scale of V2G projects and explore commercial models that can be replicated, according to a document published by the National Development and Reform Commission on Tuesday. 

The selected sites should fully implement peak-and-trough power pricing, with the aim to concentrate at least 60% of EV charging during off-peak times, the commission said. At least 80% of EV charging done through private chargers should be outside of peak hours.  

The push comes as China’s EV fleet grows. Sales of pure-battery and hybrid cars exceeded gasoline cars in each of the past two months, and the stock of battery-powered vehicles reached 24.72 million in the first half of 2024, about 7% of the total. Without proper management, charging these vehicles can spike energy demand and strain the grid. At the same time, EVs can also store energy that can be fed back into the grid.      

Power demand from EV charging and battery swapping rose 64% on an annual basis over the first first half of the year, the China Electricity Council said in July.

The trials should set up peak-and-trough electricity pricing for charging in residential properties, encouraging a differentiation in the price of power for EV charging, and that for daily use. Utility providers should also explore payments for electricity returned to the grid from EVs or battery swapping stations, the document said.

Regions with more mature infrastructure such as the Yangtze River delta, Pearl River delta, the surrounding areas of Beijing, and Sichuan province can nominate two cities to take part, the commission said. Each province can recommend up to five V2G projects, according to the directive.

EV maker Nio Inc., which promotes a battery swapping model, is a pioneer in trialling the V2G system. The company has set up V2G EV chargers in cities including Beijing and Shanghai, and some of its battery swap stations have been integrated into Zhejiang province’s grid. 

©2024 Bloomberg L.P.