Collaborative Development of Large-Scale Electric Vehicle Charging and Power Systems

As the number of electric vehicles (EVs) continues to rise, their significance as distributed flexible resources is becoming increasingly apparent. By the end of 2024, the total number of pure electric vehicles in China is expected to reach 22.09 million. Despite this rapid growth, effectively aggregating these dispersed EV resources and facilitating large-scale interaction with the power grid remains a challenge. Tang Xiaoying, an assistant professor at the School of Science and Engineering at The Chinese University of Hong Kong, Shenzhen, stated in an interview that EVs are likely to evolve into substantial mobile energy storage resources. To drive the development of vehicle-grid interaction, it is essential to establish a reasonable business model that motivates owners to charge their vehicles in an orderly manner and potentially even participate in the electricity market.

01 Collaborative Development with the Power Grid

eo: With the rapid growth of new energy vehicles, how will electric vehicle charging impact the power system?

Tang Xiaoying: The impact of electric vehicle charging on the power system is primarily reflected in several aspects:

1. Increased Peak Load: Large-scale concentrated charging can elevate the peak load on the grid and alter traditional load curve distributions. Without effective load management, the pressure on power supply in specific areas or during peak times can significantly increase. Our estimates indicate that if the penetration rate of electric vehicles reaches 50% without any control measures, the peak load on the grid could rise by 18%, causing substantial strain on grid operations.
2. Impact on Distribution Networks: The concentrated deployment of charging stations, especially fast chargers, can severely impact regional distribution networks, necessitating additional construction of lines and upgrades to transformer capacities, as well as careful planning of station sites.
3. Increased Balancing Pressure: As more renewable energy sources are integrated into the grid and the scale of EV charging grows, the pressure for peak shaving and frequency regulation increases. If technologies such as smart charging and discharging are employed for bidirectional energy interaction between vehicles and the grid, EVs could provide ancillary services to the power system.
4. Demand-Side Management Measures: To mitigate peak load impacts, both the government and grid companies are implementing various demand-side management strategies, such as utilizing time-of-use pricing to guide users towards off-peak charging. Additionally, new operational models like shared charging and smart charging platforms offer potential solutions for load balancing.

Overall, while the increasing penetration of new energy vehicles presents short-term load challenges to the power system, it also introduces new opportunities for grid resilience and optimized operation. Through smart technologies and appropriate policy frameworks, large-scale EV charging is expected to achieve collaborative development with the power system.

eo: What technical conditions must be met for large-scale discharging of electric vehicles to the grid, and what impact will this have on grid operations?

Tang Xiaoying: The technical conditions required include:

1. Both electric vehicles and charging facilities must possess bidirectional energy flow capabilities (V2G) and comply with relevant hardware and communication standards (such as ISO 15118 and IEC 61851).
2. The battery management system (BMS) in vehicles must continuously monitor battery status to ensure safe and efficient discharging to the grid.
3. A unified scheduling system or aggregator is needed to integrate dispersed vehicle resources, manage discharging schedules, and address user demand.
4. The distribution network must support bidirectional flow and have comprehensive protective measures and grid connection standards to prevent safety issues such as voltage and frequency fluctuations caused by large-scale discharging.

The impacts on grid operations can be summarized in four areas:

1. Enhanced Flexibility: Large-scale V2G can participate in grid peak shaving and frequency regulation, improving the system’s capacity to accommodate variable renewable energy sources.
2. Load Management: Charging EVs during off-peak hours and discharging during peak hours can smooth out load fluctuations and reduce peak pressure on the grid. Our research indicates that appropriately regulating V2G pricing and penalty amounts can effectively meet the grid’s peak shaving needs.
3. Challenges to Distribution Infrastructure: Bidirectional high-power flows can stress the capacity and safety checks of distribution networks, necessitating upgrades to local lines and substations.
4. Transformation of Business Models: EV owners can earn additional income by selling electricity back to the grid, fostering the development of new models such as price incentives, demand response, and vehicle networking services. If discharging revenues can be effectively aggregated, participants can collectively engage in the electricity market to generate profits.

Several charging demonstration stations in Shenzhen, such as the Meilin Perovskite Comprehensive Energy Demonstration Station and the Lianhua Mountain “Solar Storage Supercharging + Vehicle-Grid Interaction + Power Harmony” Multi-Dimensional Comprehensive Demonstration Station, have achieved centralized management and scheduling, allowing dispersed EV charging resources to be integrated and managed through intelligent platforms. These stations not only showcase the effectiveness of centralized scheduling but also facilitate interactions between vehicle owners and the grid through smart grid technologies, enabling owners to earn additional income by participating in frequency regulation and peak shaving services.

eo: Given the scale and decentralized nature of electric vehicles, how can we effectively aggregate these dispersed resources?

Tang Xiaoying: Electric vehicle resources can be aggregated through four key approaches:

1. Establishing Aggregation Platforms: Introducing third-party aggregators or creating vehicle-grid aggregation platforms by grid companies to centrally manage and schedule dispersed EVs, thereby integrating charging and discharging demands with grid operational needs.
2. Enhancing Standardized Communication and Monitoring: Implementing international and industry standards such as OCPP (Open Charge Point Protocol) and ISO 15118 to ensure data interoperability between vehicles and charging stations, coupled with a cloud monitoring platform for real-time remote monitoring and instructions.
3. Utilizing Intelligent Algorithms and Big Data Analysis: Leveraging multidimensional information such as battery status, travel needs, and electricity pricing, AI or big data algorithms can dynamically match vehicle availability with grid demands to enhance scheduling efficiency. For instance, in highway scenarios, analyzing drivers’ range anxiety can lead to more accurate predictions of charging behavior.
4. Increasing Economic Incentives and Innovative Business Models: Implementing market-based strategies such as time-of-use pricing, subsidies, or revenue sharing to boost owner participation while ensuring the safety of vehicle batteries and addressing essential travel needs.

02 Sustainable Market Mechanisms

eo: The pricing mechanism is central to the development of vehicle-grid interaction business models. What market mechanisms do you believe are necessary to encourage participation from various stakeholders?

Tang Xiaoying: Key mechanisms include:

1. Utilizing time-of-use or real-time pricing to guide owners to charge during off-peak hours and discharge during peak times, allowing users to gain significant economic benefits from price differentials. Our preliminary estimates suggest that if 25 vehicles can be efficiently aggregated, they can generate daily peak and valley revenues of 2000 yuan.
2. Incorporating electric vehicles’ peak shaving and frequency regulation activities into the ancillary service market, providing corresponding compensation or trading mechanisms so that owners and aggregators can earn revenue from supporting the grid.
3. The government or grid companies should offer subsidies or rebates to owners who participate in scheduled charging and discharging during specific times, encouraging more vehicles to engage in vehicle-grid interaction. For instance, for taxi and ride-hailing drivers, we could provide timed subsidies in high-traffic areas to lower their charging costs while facilitating demand response.
4. Encouraging aggregators (third parties or grid companies) to provide convenient and efficient vehicle-grid interaction services for dispersed owners through unified settlements and revenue sharing, streamlining the connection between technology and market.

eo: What conditions are necessary for the large-scale application of vehicle-grid interaction? What support is needed from policies, markets, and technology?

Tang Xiaoying: On the policy level, standards for bidirectional charging technology, grid connection permits, and safety regulations must be established, clearly defining the responsibilities and rights of all parties involved in vehicle-grid interaction. Initially, financial incentives such as subsidies and tax reductions should be offered to encourage aggregators, EV manufacturers, and users to actively participate in vehicle-grid interaction.

On the market level, implementing time-of-use pricing, real-time pricing, and an ancillary service compensation system will enable owners to earn tangible benefits from participating in peak shaving and frequency regulation services. Additionally, enhancing the trading platforms for demand response and ancillary services will promote diverse business model innovations by third-party aggregators or grid companies.

On the technology front, both vehicle and charging station must have hardware and communication protocols that support V2G (such as ISO 15118) and achieve data interoperability with a unified aggregation platform. The distribution network must be capable of accommodating large-scale distributed energy sources and controlling bidirectional flows, with improved metering, protection, and scheduling systems. Utilizing IoT and big data technologies to dynamically optimize matching between vehicle battery status, travel needs, and grid load will provide precise decision support for vehicle-grid interaction.

eo: What is the future direction for vehicle-grid interaction, and what key technological trends should we focus on?

Tang Xiaoying: In the future, vehicle-grid interaction will transition from small-scale pilots to widespread commercial deployment, forming an ecosystem that spans cities and regions. By aligning V2G with renewable energy generation (such as wind and solar), it will facilitate peak shaving and frequency regulation, reinforcing the low-carbon operation of the power system. Aggregation platforms will unify and schedule vast numbers of dispersed electric vehicle resources, achieving vehicle-grid synergy through intelligent operations. Beyond home and public charging station scenarios, vehicle-grid interaction will also develop in conjunction with buildings and smart cities.

Key technological trends to watch include the standardization and hardware upgrades for bidirectional charging, accelerating the standardization process and technological iteration for V2G devices to improve their reliability and compatibility; smart scheduling via energy internet and big data, harnessing IoT, cloud computing, and AI for real-time analysis and optimization of vehicle travel, grid load, and electricity pricing; advancements in onboard energy storage and battery management technologies, enhancing battery management system algorithms and lifetime assessment techniques to ensure safety and performance while extending economic lifespan; and establishing robust security and transaction settlement systems to safeguard network security and data privacy, expanding the application of smart contracts and blockchain technologies in transactions and settlements.