China – Watts going on
China is still building new, and upgrading old, coal-fired power stations for electricity generation. On Tuesday Coal India Ltd announced a plan to invest about $8bn to build coal-fired power plants for the same purpose. Meanwhile wild estimates of the soaring power consumption of AI driven data centres are almost a daily event.
Every country in the world sees seasonal and daily peak electricity demand. In general terms UK peak daily demand occurs between 4pm and 7pm while trough demand is between 2am and 5am, while peak seasonal demand (obviously) occurs during the colder winter months (November to February).
This author installed solar with a 9.5kWh battery last year and opted for a variable import/export tariff. By forcing the battery to charge between 2am and 5am and forcing it to discharge between 4pm and 7pm the system generates a nice little arbitrage. We are talking pennies, not pounds, but it would be remiss of an investment manager not to take advantage of a daily guaranteed ‘buy low, sell high’ strategy. UK EV owners, to some extent, can also ‘play’ this game.
Home batteries range from 5kWh to 20kWh in capacity. EVs typically have a battery capacity of between 50kWh and 100kWh. One would expect vehicle battery capacity to increase given that longer range remains the ultimate challenge.
We were interested, therefore, to learn that China’s economic planning agency is setting up a nationwide test of vehicle-to-grid (V2G) charging to see if the country’s electric cars can be used to smooth out peaks and troughs in electricity supply and demand. Under the trial, all provinces will be asked to nominate one city to set up a V2G system whereby electric cars can feed power back into the grid during times of high demand. EVs account for circa 45% of new registrations and the fleet of EVs is roughly 25mn (7% of total vehicles) and rising fast.
China’s dominance and success in the pure EV market is primarily down to sensible planning. According to BloombergNEF China accounts for two thirds of the global public charging infrastructure with Europe (one fifth) and the USA (one twentieth) much of the balance. Outside of China, drivers have stayed with their ICE or swerved towards fossil fuel driven hybrids with an electric feel.
V2G is just another example of China pointing the way forward and, as always, at scale.
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