The service barely affects battery swap stations' ability to provide service to car owners, with one station bringing in revenue in the tens of thousands of euros a year, according to a Nio vice president.
(Nio's only swap station in Denmark has begun offering frequency regulation service to the grid. Image from Nio vice president Shen Fei's Weibo.)
Nio's (NYSE: NIO) battery swap station in Denmark has begun offering frequency regulation service to the grid, a small step for Nio Power in Europe and a big one for the battery swap business model as a whole, Shen Fei, vice president of the Chinese electric vehicle (EV) maker, said today on Weibo.
This marks the beginning of battery swap stations' role in stabilizing the grid by participating in grid frequency regulation service as energy storage devices, Shen said.
This has great implications for the battery swap business model itself, for the construction of new power systems, and for the grid's ability to absorb more green power, including wind and photovoltaic power," he said.
Shen explained the benefits of the service for Nio. "Taking the example of a third-generation station with 21 batteries and 500 kW power, how much additional revenue could be generated in a year by participating in grid frequency regulation service in Europe? Hint, in tens of thousands of euros," said Shen.
Battery swap stations' participation in grid regulation includes providing services to regulate peak loads, as well as frequency regulation service, according to Shen.
The regulation of the grid's peak load is easy to understand, which means that battery swap stations charge less or even discharge when the grid load peaks and the price of electricity is high, and charge more when the grid load is low and the price of electricity is low, he said.
Nio has previously been involved in regulating peak loads on the grid, and is estimated to save between RMB 120 million ($16.7 million) and RMB 150 million in electricity costs this year, Shen said.
The frequency regulation service, on the other hand, is relatively difficult to understand, he said.
The challenge is how to make the definition and value of the service comprehensible to EV users in an easy-to-understand way, knowing that the service barely affects the battery swap stations' ability to provide service to vehicle owners and is entirely new marginal revenue, Shen said.
Shen shared a chart showing how Nio's battery swap stations performed during the test period of providing frequency regulation service to the grid in Denmark.
Shen said he expects battery swap stations in China to enter the vehicle-to-grid interaction space at scale in the form of aggregated virtual power plants, providing services including peak load regulation, and frequency regulation.
Nio currently has just one battery swap station in Denmark, which came online in March 2023, according to figures monitored by CnEVPost.
The company currently has 39 battery swap stations in Europe, with Germany having the most at 11, and Norway and the Netherlands both having nine each.
Nio now has 2,375 battery swap stations in China and aims to bring that number to 3,310 by the end of this year.
In August 2022, China had a brief power crunch during the summer peak, and some of Nio's battery swap stations were involved in helping to reduce the load on the grid.
Vehicle-grid interaction is encouraged in China at a time when new energy vehicles (NEVs) are being rapidly embraced.
On January 4, four government departments issued an implementation guideline on enhancing the interaction of NEVs with the power grid, stating that China's goal is for NEVs to become an important part of the energy storage system by 2030, providing 10 million kilowatts of regulation capacity to the power system.
($1 = RMB 7.1959)
Power crunch: How Nio's swap stations help reduce grid peak load
