China aims for NEVs to become an important part of the energy storage system by 2030, providing tens of millions of kilowatts of regulation capacity to the power system.

(Image credit: CnEVPost)

China has issued guidelines on vehicle-grid interaction in a bid to explore new possibilities in the energy sector following the widespread adoption of NEVs (NEVs).

Four government departments, including China's economic planner, the National Development and Reform Commission (NDRC), today released implementation guidelines on enhancing the interaction of NEVs with the power grid.

By 2025, China's technical standard system for vehicle-grid interaction will be initially established, and the busy-idle tariff mechanism for charging will be fully implemented and continuously optimized, the guidelines said in its development goals.

China will step up its efforts to carry out pilots on vehicle-grid interaction, aiming to have more than 60 percent of the annual charging power in participating cities at idle times and more than 80 percent of the charging power in private charging piles at idle times by 2025, according to the document.

The country aims to have the potential of NEVs as a mobile electrochemical energy storage resource initially validated through pilots by 2025, the document said.

In the longer term, China aims to basically build a technical standard system for vehicle-grid interaction by 2030, when vehicle-grid interaction will be applied on a large scale and smart and orderly charging will be fully promoted, according to the document.

By then, NEVs will be an important part of the electrochemical energy storage system, providing tens of millions of kilowatts of bi-directional flexibility regulating capacity for the power system, the document said.

To achieve these goals, one of China's next key tasks is to strengthen research and development of key power battery technologies and increase battery cycle life to 3,000 cycles and beyond without significantly increasing costs, according to the document.

As NEVs are rapidly adopted in China, the potential of such models as distributed energy storage sites is being increasingly emphasized.

This is partly because, while daytime is the peak of electricity consumption, nighttime's is the trough, which poses a challenge for balancing the load on the grid.

The battery swap model has been favored in China over the years because battery swap stations are easier to plan for in terms of usage behavior than charging stations.

Nio (NYSE: NIO) has been exploring ways for its battery swap stations to interact with the grid, and the direction is consistent with the latest government document.

In August 2022, as China faced a summer power crunch, more than 100 Nio battery swap stations used their energy storage capabilities to keep peak loads on the grid in the cities where they are located from rising to what would have been much higher levels.

In a post at the time, Nio said each battery swap station could become a virtual power plant, participating in load regulation on the grid.

Power crunch: How Nio's swap stations help reduce grid peak load