2016 China International Conference on Electricity Distribution (CICED 2016) Xi’an, 10-13 Aug, 2016

Cost-benefit Calculation and Analysis of V2G System

Quansheng Cui1, Xiaomin Bai1, Shouzhen Zhu2, Biyao Huang3
1.China Electric Power Research Institute, Beijing, 100192, China; 2. Tsinghua University, Beijing, 100184,
China; 3. Global Energy Internet Research Institute, Beijing, 102209, China

Abstract — In the new electricity tariff market, as an the target year 2020 is estimated, the total costs and benefits of
important part of the smart grid, V2G (vehicle-to-grid) V2G system in the V2G integrator mode are calculated, and the
effect of the cost of EV battery, TOU peak-valley price ratio,
has been obtained widespread concern and in-depth and the cost of charge piles on the net revenue of EV user is
study. In this paper, taking the scenario of year 2020 in analyzed. Battery parameters of several typical EVs in the
the urban district of Chongqing, China for example, Chinese market and current TOU price in Chongqing are used
the size of EVs (electric vehicles) and EV charging in the calculation. Calculation results show that the annual net
facilities are estimated, and V2G system’s net revenue revenue of each EV user who participates in V2G is relatively
small, and it is not enough to stimulate EV users to participate
are calculated. The results show that earnings per V2G in the V2G mode. With the prosperous development of EVs
electric car is still too small, and it’s not enough to and the advancement of battery technology, the annual net
stimulate electric car owners to participate in V2G revenue from EV participating in the V2G mode will increase,
mode. The main reason is that the high cost per kWh and it is conducive to encouraging EV owners to participate in
of EV battery and relatively small peak-valley the V2G mode.
electricity price ratio. II. COMPOSITION AND CHARGING & DISCHARGING
STRATEGY OF V2G SYSTEM
Index Terms—V2G (vehicle-to-grid); V2G aggregator;
V2G system; net revenue; electric vehicle battery A. Composition of V2G System
As shown in Fig.1, the V2G system mainly includes the
I. INTRODUCTION following several components: charging piles (intelligent
charging and discharging device), EV control center and smart
In China, V2G is still a relatively new concept, and its meters. Charging piles play a key role in the V2G system, and
research and practice is still in its infancy [1]-[3]. Charging and they are the tie of two-way energy flow between EVs and the
discharging of EV batteries will be in unified deployment by power grid. They work in the V2G mode, in which EVs can be
applying V2G technology and smart grid technologies. By charged and discharged, implementing two-way flow of
applying the established charging and discharging strategy, EV electricity energy. EV control center implements the functions
users, V2G aggregators and power grid companies will obtain of monitoring, control and management of V2G system,
win-win results. For example, EV users can charge the vehicles including real-time monitoring of the state of charge (SOC) of
at a low electricity price, and at a high price they can sell the EV batteries, releasing the status information of power grid
electricity energy stored in EV batteries to the power grid peak-valley, managing the information of EV and EV users.
company to get cash subsidies and thus reduce the cost of EVs; (9FRQWUROFHQWHU
while power grid companies can not only reduce the pressure
brought by EVs on electricity supply, delay the construction
investment of power grid, but also take EVs as energy storage
devices for load regulation to improve the efficiency and
reliability of the power grid.
VPDUWPHWHU
From the perspective of convenient use and resource
conservation, in the future the dominant conventional charging
mode in China should be slow charging, and charging piles in
(9EDWWHULHV FKDUJLQJSLOH
parking lots and along the roadside will become the dominant FRPPOLQH

charging facilities. With the rapid increase of the number of SRZHUOLQH

EVs, it will form charging networks which mainly depend on

charging piles, and are supplemented by charging stations.
Charging piles are used for conventional slow charge, and 
charging stations are used to meet the emergency needs of fast &ŝŐ͘ϭŽŵƉŽƐŝƚŝŽŶŽĨsϮ'^LJƐƚĞŵ
charge [4]. This paper discusses the interconnection between B. Charging & Discharging Strategy of V2G System
EVs and smart grid through disperse charging piles (slow Because EV batteries are expensive, so, in the orderly
charge), and suppose EVs are idle in most of the time and can charge-discharge mode of V2G, in order to reduce damage on
participate in peak load shifting for several hours. the battery life due to frequent charging and discharging, the
In this paper, taking the urban area of Chongqing City, centralized charging and discharging time of EVs can be
China as an example, the scale of EVs and charging facilities in

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  2016 China International Conference on Electricity Distribution (CICED 2016) Xi’an, 10-13 Aug, 2016

divided based on load peak and valley hours. The scheduling TOU prices used in the calculation are shown in Table II.
strategy is: in the organization of V2G aggregators, EVs are Table II is current average sales price in Chongqing (two-part
charged in valley hours at night, and discharged in the daytime TOU) [11]. The sales price includes KWh-based electricity
peak hours in a concentrated way. Thus V2G system can price and basic electricity price (capacity-based electricity
effectively reduce the power grid peak load. This operation price). Since the peak load is substantially brought about by the
mode of V2G aggregators need provide incentive compensation peak demand of industry and commerce, therefore, in the
to the EV owners who participate in the V2G mode to attract calculation the value of 1.07 ¥/kWh is adopted for KWh-based
them to participate in this program. electricity price, and maximum demand of 26 ¥/(kW• months)
is adopted for the basic electricity price.
III. COSTS AND REVENUES CALCULATION OF V2G
SYSTEM TABLE II. TOU Tariff of Chongqing City

A. Calculation Steps Peak hours Normal Valley Basic electricity
Calculation steps of costs and benefits of V2G system are hours hours price
as follows:
1) According to the economic development and historical 8̚12, 7̚8, 23̚7 yuan/kWÂmonth
data of some region, estimate the size of EVs and the size of 19̚23 12̚19
charging infrastructure in a given target year in this region.
2) Calculate the total cost of V2G system. 1.07yuan 0.71yuan 0.35yuan 26yuan
3) Calculate the total revenue of V2G system.
4) Calculate the net revenue of V2G system. Please note that in the following sections from C to E we
B. Scale Estimation of V2G System and Case Conditions
take BYD e6 for example to calculate the costs and benefits of
Next, calculation will be done by taking the scenario of
V2G system.
year 2020 in the urban district of Chongqing as an example. C. Costs Calculation of V2G System
According to China's “energy-saving and new energy
The cost of V2G system includes the cost of
automotive industry development plan (2012-2020)” issued by
charging and the cost of charging piles. The cost of EV control
the State Council of China, it is estimated that the number of center and smart meters in V2G system is converted into the
EVs owned in China is five million by 2020[5]. It is estimated
cost of each charging pile.
that in 2020 China's population is 1.45 billion, while the
1) charging costs
population in the urban area of Chongqing is 12 million [6]. peak clipping capacity CV provided by each EV is:
According to the national average level, there are about 41,000
CV = [(TESuDOD)-(RB/EFF)]/DH [12]
EVs in the urban area of Chongqing (namely 5,000,000 * (0.12
= [63.36kWhu80% - 50km/(4.65 km/kWh)]/4h = 9.98
 §  kWDŽ
EV battery parameters used in the calculation are shown in
In the above formula, the total electricity storage of EV,
Table I. Battery parameters of several typical EVs in the
i.e., TES, is 63.36 kWh, and the daily driving distance RB is
Chinese market are in Table 1[7] - [9]. In Table I, BYD means taken as 50 km. Suppose each EV discharge to the grid for 4
BYD Automotive Companyˈ Beiqi means Beijing Automotive
hours in peak hours every day, i.e. DH = 4, then each EV can
Company, and JAC means Jianghuai Automotive Company.
provide discharge power (peak clipping capacity) of 9.98 kW.
According to relevant material, it is estimated that most of Suppose in the peak hours the simultaneous coefficient of EV
the EV battery price is $400(2600 yuan)/kWh in 2015, and by
peak-clipping is 0.5, then peak load clipping of 41,000 EVs is
2020 the average price of EV batteries is $300(1950
41000* 9.98kW * 0.5 = 204.67 MW.
yuan)/kWh, while in 2025, the average price is Assuming that EVs are charged at night when load is at
$200(1300yuan)/kWh [10]. Suppose the battery cost of each
valley. The valley price in Chongqing is about 0.35 ¥/kWh,
EV model changes by this law, i.e., the cost decreases by $100
then the charge cost per kWh (including battery charging fee
(650 yuan) every five years. and depreciation expense) is:
In the scenario of 2020, the battery cost of BYD e6 is 650
STC = [BRC/(DODuCL)] + EC [12]
yuan lower than the year of 2015, i.e., 1850 yuan
=˄1850̞/kWh˅ /(80%u4000)+˄0.35̞/kWh˅ = 0.928
(2500-650=1850). Battery cost in Table 1 is thought of the cost ̞/kWhDŽ
in 2015. In the scenario of 2020, Battery cost of Beiqi EV200
Wherein, BRC indicates the cost of the battery. The BRC
and JAC iEV5 are 2350 yuan (3,000 – 650 = 2350).
of BYD e6 in 2020 is 1850 ¥/kWh, and its CL (battery cycles)
TABLE I.EV Battery Parameters is 4000 times.
EV model BYD e6 Beiqi EV200 JAC iEV5
So, the total annual charging cost of 41,000 EVs is:
TMC = ˄0.928̞/kWh˅u˄9.98kW˅u 4h u 350days u
rated energy 63.36 30.4 23 41000 vehicles = 531,882,000 yuan, i.e., about 531.88
(TES), kWh million yuanDŽ
discharge depth 80% 90% 80%
There are statutory holidays of over 10 days in a year, so
(DOD)
in the above formula, the number of days in a year is 350.
efficiency (EFF), 4.65 6.67 7.69
km/kWh
2) the cost of charging piles
continue voyage 300 200 240 In order to meet the requirement of EV driving, charging
course, km piles must be built. According to the using rule of EV, the
battery cost (BRC), 2500 3000 3000 number ratio of EVs and charging piles should be kept at 1:1.5
yuan/kWh in order to ensure the accessibility of EV power supply. 41,000
Cycle life (CL) 4000 2000 3000 EVs need 61,500 (41,000*1.5 = 61,500) charging piles. Per the
 construction cost of each charging pile of 20,000 yuan, the total

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  2016 China International Conference on Electricity Distribution (CICED 2016) Xi’an, 10-13 Aug, 2016

cost of 61,500 charging piles is 1,230,000,000, namely 1.23 V2G mode. If EV model is Beiqi EV200 or JAC iEV5, V2G
billion yuan. Suppose each charging pile has the average life integrator will not make profit. This is because the higher
expectancy of 25 years, the average annual cost of charging battery cost of Beiqi EV200 and JAC-iEV5 results in relatively
piles is 49.2 (1230000000/25 = 49,200,000) million yuan. higher charging costs, and additionally, relatively small
D. Revenues Calculation of V2G System peak-valley price ratio also affects the electricity sales revenue.
The revenues of V2G system include the electricity sales
revenue during peak hours and the revenue from reducing the TABLE III.Schedule of Costs & Revenues
construction of power plants, transmission & distribution EV BYD Beiqi JAC
networks. Model e6 EV200 iEV5
1) electricity sales revenue Key battery rated 63.36 30.4 23
Revenues from basic electricity price: Para- capacity(kWh)
(26 ̞ /kilowatt·month)u 204.67 MW * 12 months= meters battery cost 1850 2350 2350
63,860,000 yuanˈnamely 63.86 millon yuanDŽ (yuan/kWh)
Revenues from KWh-based electricity price ˖˄ 1.07 Annual charg- charg- -331.31 -99.77 -59.76
̞/kWh˅u˄9.98kW˅u 4h u 350 days u 41000 vehicles = Cost ing ing
613,190,000 yuanˈnamely 613.19 million yuanDŽ (million cost fees
2) the revenue from reducing the construction of power yuan) battery -200.58 -248.09 -167.18
plants, transmission & distribution network deprec
ation
In the calculation, the value of 5000¥/kW is adopted for
total -531.88 -347.86 -226.94
the construction cost of thermal power plant, and the value of
charg-
2450¥/kW is adopted for the investment cost of new ing
transmission and distribution network. cost
Since the discharge of 41000 EVs is equivalent to the charging piles -49.20 -49.20 -49.20
peak clipping of 204.67MW, revenues from reducing the cost
construction of power plants is 204670kWu5000¥/KW = Total cost -581.08 -397.06 -276.14
1,023,350,000 yuan, or 1.02335 billion yuan. If the average life
expectancy of 25 years of thermal power plants is used in the Annual Elec. Elec. 613.19 305.00 182.69
Revenue sales Quan
calculation, the average annual income from reducing building
(million revenu revenu
power plants is 40.93 million yuan. yuan) e e
Revenues from reducing the construction of transmission Capa 63.86 31.76 19.02
and distribution networks is 204,670kW u 2,450¥/KW = revenu
502,250,000 yuan, namely 502.25 million yuan. If the average e
life expectancy of 20 years of transmission and distribution revenue from 40.93 20.36 12.20
network is adopted in the calculation, the average annual power plant
income from reducing the construction of transmission and construction
distribution networks is about 25.07 million yuan. reduction
E. Net Revenues of V2G System revenue from 25.07 12.47 7.47
By 2020, there are 41,000 EVs in the urban area of trans&distr
Chongqing. Centralized power supply of these EVs to the grid construction
through the V2G mode can reduce peak load 204.67 MW. The reduction
detailed costs/revenues and net revenue are shown in Table III. Total revenue 743.05 369.59 221.38
In the table costs are recorded as negative numbers and Annual Net revenue 161.97 -27.47 -54.76
revenues are recorded as positive numbers. The annual net Net
V2G aggregator 80.985 -13.735 -27.38
revenue is 161.97 million yuan. If the annual net revenue Revenue
(million revenue
between EV user cluster and V2G integrator is roughly
yuan) EV group revenue 80.985 -13.735 -27.38
distributed by 1: 1, the annual income of EV user cluster is
80.985 million yuan, and then the annual income of each EV is Each EV user 1975 -335 -668
about 1975 yuan. revenue yuan yuan yuan
The payback period of charging piles investment of V2G V2G aggregator 15.2 N/A N/A
integrator is: 1.23 billion yuan / 80.985 million yuan = 15.2 Payback year
years. Wherein, 1.23 billion yuan is the total cost of charging
piles, 80.985 million yuan is the annual income of V2G IV. DISCUSSION ON INFLUNCE FACTORS OF EV
integrator. USER’S ANNUAL NET REVENUE
If calculating by BYD e6, the annual net revenue for each
EV is 1975 yuan. By Beiqi EV200, the annual net revenue for In this section the factors that influence the net revenue of
each EV is -335 yuan. By JAC iEV5, the annual net revenue for each EV user are discussed.
each EV is -668 yuan. Since BYD e6 has battery of big Fig.2~4 show respectively the effect of change in the cost
capacity and low cost, so the annual net revenue for each EV is of EV batteryˈthe peak-valley price ratio and the cost of
relatively large for BYD e6. charging pile on the annual net revenue of each EV user . As
As can be seen from the calculated results, for the V2G can be seen from Fig. 2 to 4, the curves of BYD e6 are always
system of urban area of Chongqing, only when EVs are all above those of Beiqi EV200 and JAC iEV5, and distant from
BYD e6, V2G integrator can make profit, but the annual net those of the latter two in the distance, while the trend of curves
revenue per EV user is still relatively small (1,975 yuan), and it of Beiqi EV200 and JAC iEV5 is about the same and the
is not enough to stimulate the EV owners to participate in the location of curves of these two EV models is relatively close.
This is because battery parameters of BYD e6 are quite

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  2016 China International Conference on Electricity Distribution (CICED 2016) Xi’an, 10-13 Aug, 2016

different from those of the latter two (mainly on the battery

capacity and battery cost), while battery parameters of Beiqi annual net revenue of each EV user v.s. charging pile cost
2500
EV200 and JAC iEV5 are relatively close.
Fig.2 shows the effect of changes in the cost of EV battery 2000

annual net revenue of each EV user (yuan)

on the annual net revenue of each EV user. As can be seen from BYD e6
the figure, with the decrease of EV battery cost, annual net 1500
Beiqi EV200
JAC iEV5
revenues of all models increase, and the change rate of annual
net revenue of BYD e6 is almost 2 times that of the other two 1000
EV models. This is mainly because the battery capacity of BYD
e6 (i.e., TES parameter in table I) is almost 2 times of that of
500
the other two. In Fig.2, the battery cost of BYD e6 reduces
from the 2,500 yuan to 1,200 yuan, and that of Beiqi EV200
0
and JAC iEV5 reduces from the 3000 yuan to 1700 yuan.  
annual net revenue of each EV user v.s. battery cost change
-500
3500
BYD e6
3000 Beiqi EV200 -1000
2 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1
annual net revenue of each EV user (yuan)

JAC iEV5
2500 charging pile cost (yuan) 4
x 10 
2000
&ŝŐ͘ϰƚŚĞĞĨĨĞĐƚŽĨĐŚĂƌŐŝŶŐͲƉŝůĞĐŽƐƚŽŶĂŶŶƵĂůŶĞƚƌĞǀĞŶƵĞŽĨ
1500
ĞĂĐŚsƵƐĞƌ 
1000
Figure 3 shows the effect of TOU peak-valley price ratio
500
on the annual net revenue of each EV user. With the increase of
0 the peak-valley price ratio, the annual net revenue of each EV
-500
user increases. Referring to current TOU prices in Chinese
provinces, peak-valley price ratio ranges about from 2.0 to 4.0.
-1000
In Fig. 3, peak-valley price ratio changes from 2.0 to 4.0, and
-1500 the price at normal hours is 0.7 yuan/ kWh.
3000 2800 2600 2400 2200 2000 1800 1600 1400 1200
battery cost (yuan/kWh)
Figure 4 shows the effect of changes in the cost of
charging pile on the annual net revenue of EV user . As it can
&ŝŐ͘ϮƚŚĞĞĨĨĞĐƚŽĨsďĂƚƚĞƌŝĞĐŽƐƚŽŶĂŶŶƵĂůŶĞƚƌĞǀĞŶƵĞŽĨ be seen from the figure, when the cost of charging pile
decreases from 20,000 yuan to 10,000 yuan, it has little effect
ĞĂĐŚsƵƐĞƌ
on the annual income of EV user.
As can be seen from Fig.2 ~ 4, the net revenue of each
annual net revenue of each EV user v.s. peak-valley price ratio
3000 EV user is relative to the battery cost per capacity, the total
BYD e6 battery capacity, peak-valley price ratio and the cost of charge
Beiqi EV200
2500 pile. Wherein the battery cost per capacity gains the greatest
annual net revenue of each EV user (yuan)

JAC iEV5
2000
impact on the net revenue of EV user, followed by the
peak-valley price ratio, and relatively speaking, the cost of EV
1500 charging pile has less effect on each EV user earnings. In the
1000
battery data of several EVs, for BYD e6, the battery cost per
capacity is the lowest, the total battery capacity is the largest,
500 and cycle life is the longest. So if calculating on the parameters
of BYD e6, V2G system can get the maximal annual net
0
revenue.
-500 With the prosperous development of EVs and the
advancement of battery technology, not only the battery cost
-1000
per unit capacity will decrease, but also the cycle life of battery
-1500 cell and battery banks will be greatly improved, which will help
2 2.2 2.4 2.6 2.8 3 3.2
peak-valley price ratio
3.4 3.6 3.8 4
to improve benefits of V2G system. In the future research and
 development of EV battery, if the battery can achieve goals of
high specific energy and specific power, low battery cost and
&ŝŐ͘ϯƚŚĞĞĨĨĞĐƚŽĨůŽĂĚƉĞĂŬͲǀĂůůĞLJƉƌŝĐĞƌĂƚŝŽŽŶĂŶŶƵĂůŶĞƚ
long cycle life, then it indicates not only the better performance
ƌĞǀĞŶƵĞŽĨĞĂĐŚsƵƐĞƌ
of EVs, but also the higher benefits when participating in V2G
mode.

V. CONCLUSION

The costs and benefits of V2G system should be

calculated based on a reasonable estimate of the size of EVs
and charging infrastructure in the target year. From calculation
results of the case of the urban area of Chongqing City, it can
concluded that even for BYD e6, whose battery cost is lower
and battery capacity is larger, the annual net revenue of each

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  2016 China International Conference on Electricity Distribution (CICED 2016) Xi’an, 10-13 Aug, 2016

EV user is still too small and not enough to stimulate EV Sc and Ph D degree from graduate school of EPRI, China in
owners to participate in the V2G mode; while for Beiqi EV200 1982 and 1988 respectively. He is a chief expert and a doctorial
and JAC iEV5, whose battery cost is higher and battery supervisor of EPRI, China.
capacity is smaller, it is impossible to make profit at all if they
participate in the V2G system. The main reason is the high cost Zhu Shouzhen, Department of Electrical Engineering, Tsinghua
per kWh capacity of EV battery, and peak-valley electricity University, Beijing, 100084, China, [email protected].
price ratio is relatively small, which result in a smaller V2G Shouzhen Zhu is an professor in the Department of Electrical
electricity sales revenue. With the prosperous development of Engineering, Tsinghua University. She received her BS in the
EVs and the advancement of battery technology, EV batteries same university.
will become more cost-effective, which will help improve the
net revenue of the V2G system. Huang Biyao ˈ Global Energy Internet Research Institute,
Currently he is pursuing his Ph.D. degree specializing in Power
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Cui Quansheng, China Electric Power Research Institute,

Beijing, 100192, China, e-mail: [email protected], mobile
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Bai Xiaomin, China Electric Power Research Institute, Beijing,

100192, China, e-mail: [email protected]. Xiaomin Bai
graduated from Tsinghua University in 1977 and obtained his M

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