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Electric vehicles: Who will charge?
By Richard Fu |
October 24, 2011, Monday
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Print Edition
Print Edition
THOUGH the electric vehicle market in China has yet to move into high gear, a war is brewing between the nation's fuel giants and grid operators to gain the upper hand in the building of charging stations.
The number of electric cars on the road in China, according to some industry estimates, is expected to surge 50-fold in just five years to about 500,000 vehicles.
Oil companies that power today's cars don't want to be sidelined by the trend. They already own gas stations - prime real estate in densely populated cities - which could be used for battery-charging stops for green cars.
Sinopec, Asia's largest refiner and operator of more than 30,000 gas stations across China, plans to upgrade 100 existing sites in Beijing to provide charging services for electric vehicles, according to Wang Wenlian, vice general manager of Sinopec Beijing Oil Products Co.
Outside the capital, the company plans to spend 875 million yuan (US$137 million) building 175 new service stations for both gas pumps and electricity charging, Wang said at a conference recently in Beijing.
"Upgrading existing gas stations will save land and save land-use costs," Wang said.
Sinopec isn't alone in its pursuit of the charging terminal business.
State Grid Corp of China, which distributes power in all but five southern provinces, is taking a far more aggressive stance.
During the 12th Five-Year Plan (2011-15), State Grid said it plans to build 2,900 stations that could provide charging and battery replacement services for electric vehicles, as well as 540,000 charging poles.
That scale could meet the power demand for 1 million electric vehicles, Lai Xiaokang, a senior engineer of State Grid, told the same conference in Beijing. He gave no details about the size of investment that would require.
Relatively little known abroad, State Grid is actually one of the world's largest companies. It ranked seventh in the 2011 Fortune Global 500 list with US$226 billion in 2010 revenues.
State Grid's smaller rival, China Southern Power Grid Co, also plans to build stations in key cities in the next five years, expanding to smaller areas after 2015, according to Li Hanming, China Southern's senior engineer.
Foreign companies like French power equipment specialist Schneider Electric SA have expressed optimism about China's electric vehicle market and view charging infrastructure as a key element.
"China's new energy car industry will enter a period of industrialization during the 12th Five-Year Plan period, and infrastructure construction for electric vehicles will play a linchpin role in that process," said Yang Junqian, Schneider Electric China's chief expert on smart grids, electric vehicles and new energy.
A Shanghai-based energy and power sector analyst with a Western consultancy firm, who declined to be identified, said that grid firms are keen to build charging infrastructure because they see the charging business as an extension of their industry value chain and have the upper hand in setting industry standards important to the development of the electric vehicle market.
Single standard
However, he added, oil companies already under pressure because of government-capped prices on fossil fuels are taking a relatively cautious approach.
Currently, both State Grid and China Southern Power are actively engaged in the formulation of standards related to charging as part of their plans to develop so-called "smart grids" that could shunt power to where it's most needed.
Sinopec's Wang said that grid companies should open up that field to allow all companies interested in the electric-charging business to participate in its development.
"Electric vehicle is so huge a market that no one company can control its industrialization and commercialization," he said. "We hope government authorities will roll out policies conducive to the development of the whole industrial chain and healthy competition."
In the United States, seven auto manufacturers, including Audi, Ford and General Motors, are collaborating on the creation of a single standard for an electric vehicle fast-charging system so that different brands of cars could share the same stations.
"The development of a common charging approach is good for customers, the industry and charging infrastructure providers," the auto companies said in a joint statement recently.
"Standardization will reduce complexity for manufacturers, accelerate the installation of common systems internationally and most importantly, improve the ownership experience for electric vehicle drivers."
In Shanghai last month, GM and General Electric Co announced a cooperative plan to speed up deployment of electric car charging stations in the city as part of the US carmaker's effort to support sales of its Chevrolet Volt electric model, which will be launched in China by the end of the year.
The charging stations will include WattStations and Durastations, GE's two specifications for charging electric cars.
GE has estimated the electric vehicle market, including its capital fleet services and charging stations, could earn it up to US$500 million in revenue over the next three years, according to a statement released a year ago.
At that time, the company also announced it would buy 25,000 electric vehicles by 2015 for its own fleet and for its fleet customers - the single largest electric vehicle commitment.
The number of electric cars on the road in China, according to some industry estimates, is expected to surge 50-fold in just five years to about 500,000 vehicles.
Oil companies that power today's cars don't want to be sidelined by the trend. They already own gas stations - prime real estate in densely populated cities - which could be used for battery-charging stops for green cars.
Sinopec, Asia's largest refiner and operator of more than 30,000 gas stations across China, plans to upgrade 100 existing sites in Beijing to provide charging services for electric vehicles, according to Wang Wenlian, vice general manager of Sinopec Beijing Oil Products Co.
Outside the capital, the company plans to spend 875 million yuan (US$137 million) building 175 new service stations for both gas pumps and electricity charging, Wang said at a conference recently in Beijing.
"Upgrading existing gas stations will save land and save land-use costs," Wang said.
Sinopec isn't alone in its pursuit of the charging terminal business.
State Grid Corp of China, which distributes power in all but five southern provinces, is taking a far more aggressive stance.
During the 12th Five-Year Plan (2011-15), State Grid said it plans to build 2,900 stations that could provide charging and battery replacement services for electric vehicles, as well as 540,000 charging poles.
That scale could meet the power demand for 1 million electric vehicles, Lai Xiaokang, a senior engineer of State Grid, told the same conference in Beijing. He gave no details about the size of investment that would require.
Relatively little known abroad, State Grid is actually one of the world's largest companies. It ranked seventh in the 2011 Fortune Global 500 list with US$226 billion in 2010 revenues.
State Grid's smaller rival, China Southern Power Grid Co, also plans to build stations in key cities in the next five years, expanding to smaller areas after 2015, according to Li Hanming, China Southern's senior engineer.
Foreign companies like French power equipment specialist Schneider Electric SA have expressed optimism about China's electric vehicle market and view charging infrastructure as a key element.
"China's new energy car industry will enter a period of industrialization during the 12th Five-Year Plan period, and infrastructure construction for electric vehicles will play a linchpin role in that process," said Yang Junqian, Schneider Electric China's chief expert on smart grids, electric vehicles and new energy.
A Shanghai-based energy and power sector analyst with a Western consultancy firm, who declined to be identified, said that grid firms are keen to build charging infrastructure because they see the charging business as an extension of their industry value chain and have the upper hand in setting industry standards important to the development of the electric vehicle market.
Single standard
However, he added, oil companies already under pressure because of government-capped prices on fossil fuels are taking a relatively cautious approach.
Currently, both State Grid and China Southern Power are actively engaged in the formulation of standards related to charging as part of their plans to develop so-called "smart grids" that could shunt power to where it's most needed.
Sinopec's Wang said that grid companies should open up that field to allow all companies interested in the electric-charging business to participate in its development.
"Electric vehicle is so huge a market that no one company can control its industrialization and commercialization," he said. "We hope government authorities will roll out policies conducive to the development of the whole industrial chain and healthy competition."
In the United States, seven auto manufacturers, including Audi, Ford and General Motors, are collaborating on the creation of a single standard for an electric vehicle fast-charging system so that different brands of cars could share the same stations.
"The development of a common charging approach is good for customers, the industry and charging infrastructure providers," the auto companies said in a joint statement recently.
"Standardization will reduce complexity for manufacturers, accelerate the installation of common systems internationally and most importantly, improve the ownership experience for electric vehicle drivers."
In Shanghai last month, GM and General Electric Co announced a cooperative plan to speed up deployment of electric car charging stations in the city as part of the US carmaker's effort to support sales of its Chevrolet Volt electric model, which will be launched in China by the end of the year.
The charging stations will include WattStations and Durastations, GE's two specifications for charging electric cars.
GE has estimated the electric vehicle market, including its capital fleet services and charging stations, could earn it up to US$500 million in revenue over the next three years, according to a statement released a year ago.
At that time, the company also announced it would buy 25,000 electric vehicles by 2015 for its own fleet and for its fleet customers - the single largest electric vehicle commitment.
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