Shulou(Shulou.com)11/24 Report--

Under the effect of multiple factors, the sales volume of each big car enterprise in January this year is worrying, and the overall automobile market naturally also declines. According to the China Automobile Association, in January this year, China sold 1.649 million vehicles, down 35% year-on-year, including 408,000 new energy vehicles, down 6.3% year-on-year.

The last negative year-on-year growth in sales of new energy vehicles was June 2020. After years of rapid growth, sales of new energy vehicles in China have not unexpectedly begun to stall.

Since the beginning of the year, policies to stimulate automobile consumption have been released for six consecutive years, and measures to promote the development of new energy automobile industry have been continuously issued at the national level.

On February 3, the Ministry of Industry and Information Technology, the Ministry of Communications, the Ministry of Finance and other eight departments jointly issued a notice proposing to start the pilot work of comprehensive motorization of vehicles in the public domain nationwide in the next three years. This heavy policy immediately inspired the industry, many industry people bluntly said that China's new energy vehicles "refused to slow down."

After the notice was issued, the attention of the market was mainly focused on "full electrification of the public domain," but there was one point that did not attract attention, which is also the real theme of this article.

The Notice puts forward four key tasks, one of which is to promote the innovative application of new technologies, including exploring the implementation path of new energy vehicles participating in the spot market of electric power, improving the trading mechanism of green power storage and release, and accelerating the integration and development of new energy vehicles with energy, transportation and other fields.

Chebai think tank noted that the statement "exploring the implementation path of new energy vehicles participating in the electric power spot market" has been mentioned many times at the national level for several years. So what exactly is the "electric power spot market", why should new energy vehicles participate in it, and how should they participate?

1. What is the "spot market for electricity"? Electricity, as a kind of energy, is inseparable from the daily life of contemporary people. Electricity is also a commodity, and both enterprises and residents have to pay electricity bills.

In commodity trading, the so-called "spot market," popular understanding is to pay for delivery, such as the vegetable market is a typical spot market. However, electricity is not an ordinary commodity. It cannot be seen, touched, stored in large quantities, and produced and consumed instantly.

In fact, spot trading of electricity sometimes cannot be as "present" as buying vegetables, which is a concept compared with medium-and long-term trading of electricity.

Multi-year, annual, quarterly, monthly and multi-day power transactions are considered medium-and long-term transactions, which is also the most common mode in the current power market. The spot market of electric power mainly carries out day-to-day, intraday and real-time transactions, which is the mode vigorously promoted by the state at present.

Spot trading of electricity has many advantages. For electricity customers, price signals can be found; for power grids, short-term power supply and demand balance can be realized; for new energy sources such as wind power and photoelectric, consumption can be promoted.

No matter how good the spot market of electric power is, it is not easy to build it overnight under the next decree. In fact, it is not easy. It should be based on the national conditions and step by step.

In March 2015, the State Council issued Several Opinions on Further Deepening the Reform of Electric Power System, which is the famous "No.9 Document of Electric Power Reform" in the industry, opening the curtain of a new round of domestic electric power system reform.

"Opinions" put forward "control the middle, open the two ends," that is, control the transmission and distribution network with natural monopoly attribute, open the power generation side and distribution side, aiming at establishing a real power market, determining electricity price through supply and demand, and realizing the transformation from "plan" to "market."

In 2017, the construction of electricity spot market started. The National Development and Reform Commission and the Energy Bureau jointly issued the Notice on Launching Pilot Work of Electric Power Spot Market Construction, selecting eight regions including South China (starting from Guangdong), Mengxi, Zhejiang, Shanxi, Shandong, Fujian, Sichuan and Gansu as the first batch of pilot projects.

The following year, the first electric spot pilot officially started in Guangdong. By June 2019, the first eight pilot projects will all start trial operation of spot trading of electricity. This year, the National Development and Reform Commission and the Energy Bureau issued the Opinions on Deepening the Pilot Work of Electric Power Spot Market Construction, mainly summarizing the problems of the pilot work and correcting them. Since then, Shanghai, Jiangsu and other second batch of pilot started.

In November last year, the National Energy Administration issued the Basic Rules for the Spot Market of Electric Power (Draft for Comments), marking the first time that China has clarified the rules of the spot market of electric power at the national level, so it is also known as the "Basic Law" for spot trading of electric power.

2022 is a year when the spot market of electric power is active as a whole. Several regions in the first batch of pilot projects realize continuous settlement trial operation, and the second batch of pilot projects start simulation trial operation for six times. In addition, some non-pilot areas are also promoting the construction of electricity spot market. It can be said that China's electricity spot market has entered a comprehensive acceleration stage.

2 What about electric cars? The question arises. Although the power of new energy vehicles is mainly electricity, vehicles and electricity belong to two completely different industries. What are the benefits of new energy vehicles participating in the spot market of electricity?

First of all, for new energy vehicle owners, after participating in the spot market of electric power, the vehicle owners can choose to charge when the low price is relatively low, and sell the surplus electricity to the power grid reversely when the electricity price is relatively high, which not only makes up for the charging cost, but also makes a small profit, which is also an income over the years, thus further reducing the full-cycle cost of new energy vehicles.

Secondly, it is also good for the power grid. After participating in the spot market of electric power, the new energy vehicles can "fill in the valley and cut the peak" for the power grid, which is conducive to more stable operation of the power grid.

When the load of the power grid is low, the electricity price is relatively low, at this time, the new energy vehicle can be charged and can "fill the valley"; during the peak period of power consumption, the power supply is tight, and at this time, the new energy vehicle transmits power to the power grid in reverse direction, which can relieve the power supply pressure of the power grid.

Of course, some of the pressure on the power grid is also brought about by new energy vehicles.

Statistics from the Ministry of Public Security show that by the end of 2022, the number of new energy vehicles nationwide reached 13.1 million, and more than 400,000 were sold in January this year. These electric vehicles are putting pressure on the power grid.

Imagine an extreme situation. If all new energy vehicles are charged intensively during peak power consumption hours, it is bound to further push up the peak load of power grid. Considering that the scale of new energy vehicles will be larger and larger in the future, the pressure of power grid will also increase, which will make the load characteristics of power grid more complex, and constantly put forward new requirements for the capacity and safe operation of transmission and distribution network.

In short, after new energy vehicles participate in the spot market of electricity, it is conducive to realizing the two-way electricity interaction between new energy vehicles and the power grid and achieving win-win results.

That is to say, after participating in the spot market of electricity, the new energy vehicles are no longer pure vehicles, but also increase the energy storage attributes. In 2018, the National Development and Reform Commission issued Opinions on Innovating and Perfecting the Price Mechanism for Promoting Green Development to encourage electric vehicles to provide energy storage services.

In 2020, the State Council issued the programmatic document of new energy vehicles_New Energy Vehicle Industry Development Plan (2021-2035), which intends to promote the integrated development of new energy vehicles and energy and strengthen the energy interaction between new energy vehicles and power grid. The following year, the National Development and Reform Commission and the National Energy Administration issued the Guiding Opinions on Accelerating the Development of New Energy Storage, encouraging the aggregation and utilization of decentralized energy storage facilities such as electric vehicles.

By 2022, the pace is accelerating. The National Development and Reform Commission, the Energy Bureau and other departments have successively issued the Implementation Opinions on Further Improving the Guarantee Capacity of Electric Vehicle Charging Infrastructure services, the Notice on Accelerating the Construction of Electric Spot Market, and the Implementation Plan for the Development of New Energy Storage during the 14th Five-Year Plan.

All of the above documents involve strengthening the application demonstration of vehicle-network interactive technology, guiding new energy vehicles and other new subjects to participate in the electric power spot market, exploring the implementation path of new energy vehicles participating in the electric power spot market, etc.

As mentioned above, China's electricity spot market is entering a comprehensive acceleration stage. Is it too fast for new energy vehicles to participate in it?

3. V2G is a key new energy vehicle. How and when can it participate in electricity market transactions? Now we have to look at V2G's "face."

The so-called V2G, i.e. Vehicle-to-Grid, refers to the two-way flow between vehicles and power grid, which is also called "vehicle-network interaction" or "vehicle-network coordination" in the industry. Note that the "net" here and the "net" of the "Internet of Vehicles" are not a net.

V2G is an exotic product. In 1995, Amory Lovins, chief scientist of Rocky Mountain Research Institute in the United States, first proposed V2G technology. Later, Professor William Kempton of University of Delaware further improved V2G technology and carried out relevant application demonstration. Therefore, at present, V2G projects have been carried out in Europe and America.

According to a report by China Southern Power Grid News in November 2022, there are 107 V2G projects registered internationally, including 73 in Europe (68%), 20 in North America and only 10 in Asia, and more than 80% of the projects focus on V2G technical feasibility analysis.

In April 2021, GEF6-V2G Application Demonstration Project of Great Wall Motor Industrial Park, a large-scale V2G commercial operation demonstration project in the industrial park, was officially put into operation, and 50 V2G charging piles were arranged in the park.

Musk told the media earlier: "V2G technology that can feed back to the grid is returning to the vision of various car companies, and Tesla is considering reintroducing this feature." "

Generally speaking, the development of V2G in China is quite slow compared with Europe. The main reason for this situation is that V2G technology is not mature enough and still faces many challenges.

On the one hand, there are few models equipped with V2G technology in China, because V2G technology will increase the cost of vehicles, and the current utilization rate is very low, which is obviously not conducive to the sales of new energy vehicles.

On the other hand, the current mainstream charging pile and other related infrastructure generally do not support V2G function, unless replaced or upgraded, which is a lot of cost. The UK V2G project costs UI the potential benefits of participating in the electricity market compared to an investment return period expected to exceed 10 years.

In addition, since the vehicle-network interaction will increase the charging and discharging frequency of the power battery, it will undoubtedly accelerate its capacity decay. After all, the battery is the core component of a new energy vehicle, the cost is big, the battery life is discounted, obviously not the difference in the power market can make up.

Facing many challenges, Ou Yangminggao, academician of Chinese Academy of Sciences and vice chairman of China Electric Vehicle 100 People's Committee, suggested that China's V2G technology development route could adopt a "three-step" strategy:

In the first stage, before 2025, V2G will be the first to achieve the goal of commercial pilot in key areas; in the second stage, V2G will be commercialized in key areas, and the scope and proportion of power grid infrastructure upgrading will be rapidly improved; in the third stage, V2G will cover multi-scenario commercial scenarios before 2035.

It can be said that V2G involves a wide range of aspects, including the maturity of its own technology, the construction of power market trading system, the upgrading of charging infrastructure, the cost of new energy vehicles, the attenuation of power batteries, etc. Therefore, V2G promotion can be said to have a long way to go.

[Full text reference]

[1]"What is the spot market for electricity?"

[2]Power Market Acceleration, Caixin Weekly

[3]"Is the national unified electricity spot market coming?" interface news

[4]"Millions of electric vehicles or" transformation "energy storage devices, vehicle-network interaction several challenges to be solved," 21st Century Economic Report

[5]Commercial Prospect of Interaction between Electric Vehicles and Power Grid_Shanghai City Demand Response Pilot Case, China Electric Vehicle 100 People's Association, Natural Resources Protection Association

[6]"How many hurdles do we have to go through to commercialize V2G?" China Automotive News

[7]"Intelligent Low-carbon Commercialization International Vehicle Network Interactive Development Speed Up", China Southern Power Grid News

This article comes from Weixin Official Accounts: Che Bai Think Tank (ID: EV100_Plus), Author: Qin Haiqing

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