China is expected to have access to 1,138GWh by 2027 thanks to these vehicles.
As China accelerates to become the fastest expanding electric vehicle (EV) market over the coming decade, it is expected to have a battery EV fleet of almost 11 million by 2027, easily surpassing Europe’s 3.4 million and the US’ 1.4 million, Fitch Solutions said.
“This will, in turn, mean that China will be able to harness its substantial EV fleet to support the integration of increasing volumes of intermittent wind and solar power in the market through a technology called vehicle-to-grid solutions (V2G),” it said in a report.
According to the firm, V2G entails a two-way flow of electricity between electric vehicles and the grid, with EVs helping to balance power supply and demand by charging during peak supply and selling power back to the grid during peak demand.
“China's surging EV segment will mean that the country will be able to scale up V2G solutions before any other market, and at a scale unrivalled over the coming decade.” Fitch Solutions added.
With BEV and plug-in-electric vehicles (PHEV) totalling 13.4 million around the world, in theory, China will have access to 1,138GWh by 2027, larger than 295GWh in the US, and 459GWh in Europe.
According to Fitch, this has posed a number of issues in the market, where grid constraints (in addition to the provincial preference for coal power) has meant that large volumes of wind and solar power have been wasted.
This has been an issue especially in Xinjiang, Gansu and Inner Mongolia, where renewables supply has outstripped demand, and exports to other provinces have been capped by grid constraints.
“As China improves this connectivity, we believe the EV fleet can become a substantial storage tool for the government to integrate rapidly growing supplies of wind and solar power to the grid, without jeopardising its stability,” Fitch Solutions said.
The country already operates its coal-fleet at low utilisation rates, highlighting the baseload overcapacity in the country's power sector. “This will likely mean that V2G will be slower to materialise in China than somewhere like Europe where baseload capacity is coming offline at a rapid pace,” Fitch Solutions concluded.
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