China to launch grid-connected car projects to balance power supply

BEIJING (Reuters) - China plans to launch pilot projects in nine cities that would use the country's growing fleet of electric vehicles as batteries to shore up power supply on the grid during spikes in demand, according to a government announcement on Wednesday.

The move follows on rules issued last year by state planner the National Development and Reform Commission (NDRC) to strengthen the integration of new energy vehicles with the grid amid concerns the rapid adoption of EVs would overwhelm the generation and transmission systems.

The majority of the 30 projects in cities including Beijing, Shanghai, Shenzhen and Guangzhou are vehicle-to-grid or V2G, according to the announcement by the NDRC and energy regulator.

Cars would act as batteries, storing power and sending it back into the grid. Grid-connected cars could also adjust their charging times to avoid peak periods and provide critical services such as frequency regulation.

Providing those services could potentially become an alternative revenue stream for homeowners or operators of charging stations.

According to the notice, power grid companies are responsible for setting up the pilots, and provincial governments should lead the development of charging facilities. The energy regulator is tasked with supporting the participation of grid-connected vehicle applications in power trading.

Last year, NDRC said it would set up over 50 pilot programmes by 2025.

However, industry experts say there are a range of hurdles to overcome before the large-scale adoption of V2G, such as developing viable business models. NDRC also said in the 2024 rule that battery technologies need to be improved.

(Reporting by Colleen Howe; Editing by Sonali Paul)