Virtual power plant - one of the new forms of power plants

The virtual power plant play an important role in solving the problem of clean energy consumption and green energy transformation. It can improve energy services, realize load forecasting, response distribution, real-time coordinated control and safe and healthy charging and discharging management of energy storage for distributed energy. Participate in electricity trading markets and demand response. Let’s find out what is a virtual power plant.

What is a virtual power plant

Virtual Power Plant (VPP) is an advanced information communication technology and software system, realize the aggregation and coordination optimization of DG (ie distributed generator, distributed power source), energy storage system, controllable load, electric vehicle and other DER (ie Distributed Energy Resource, distributed energy resource), it is a power coordination management system that participates in the power market and grid operation as a special power plant.

Generally speaking, a virtual power plant is a virtualized power plant. It does not have a physical power plant (such as a thermal power plant) itself, but a management mode or a set of systems. Integrate and integrate small-scale solar, offshore wind power and other new energy power generation devices, energy storage batteries and various controllable (adjustable) electrical equipment (loads) scattered in different spaces through supporting technologies. About energy storage battery here is the information of top 10 energy storage battery companies in China.

Coordinated control, external equivalent to form a controllable power supply, auxiliary power system operation, and can participate in power market transactions, while optimizing resource utilization, maintaining regional and even cross-regional electricity stability and electricity safety.

It can not only consume the power of the power system in a planned way, but also export power to the power system in reverse. It is more flexible and efficient to carry out operations such as “cutting peaks and filling valleys”, and obtain considerable economic benefits.

The background of virtual grid

At present, China’s power system is mainly based on thermal power generation, supplemented by hydropower, wind power, photovoltaic power generation, nuclear power and other forms of power generation. Driven by the “dual carbon” goal, China vigorously promotes the green transformation of energy, builds a new power system with new energy as the main body, and takes the strong and smart grid as the pivot platform. The centralized and distributed power structures are combined to meet the power needs of economic and social development under the premise of ensuring energy and power security.

Compared with the traditional power system, the new power system will be cleaner, low-carbon, safe and controllable, flexible and efficient, intelligent and friendly, and open and interactive. Related products are powerwall, lithium ion solar battery.

Around the generation and consumption of electricity, it can be roughly divided into the power generation side, the grid side and the electricity consumption side. The power grid has strict requirements on operation safety, and the primary goal of power grid security is to ensure the real-time balance of power generation and consumption, which requires continuous adjustment on the power generation side to fit the load curve.

However, new energy power generation relies heavily on natural resources (light intensity, wind intensity), has the characteristics of randomness, intermittentness and volatility, and lacks the ability to support loads.

If large-scale power generation is directly integrated into the power grid, it will have a huge impact on the power grid, threatening the security of the power system and the stability of power supply.

In addition, due to the continuous development and popularization of small distributed new energy power generation facilities, energy storage facilities, controllable electrical equipment, electric vehicles, etc., on the power consumption side, many power users have also changed from single consumers to mixed producers and sellers, and various types of surged high-power electrical equipment (such as charging piles) consume a lot of electricity. Therefore, under the new generation potential, “virtual power plant” came into being. For power battery charging piles we listed top 30 power battery charging pile companies.

China’s related virtual power plant policies

At the end of 2021, the Central Deep Reform Commission passed the “Guiding Opinions on Accelerating the Construction of a National Unified Electricity Market System”, and the electricity market reform will be accelerated again. As the main part of the market, virtual power plants complete the business closed loop by participating in market transactions and obtain benefits.

On January 29, 2022, the “14th Five-Year” Modern Energy System Plan issued by the China Energy Administration proposed to vigorously promote the development of energy storage on the power supply side. Reasonably allocate the scale of energy storage, improve the output characteristics of new energy stations, and support the rational allocation of energy storage systems for distributed new energy sources. Carry out demonstrations of virtual power plant that aggregate various resources, such as industrial adjustable loads, building air conditioning loads, big data center loads, user-side energy storage, and energy interaction between new energy vehicles and power grids (V2G).

Recently, the Southern Supervision Bureau of the National Energy Administration issued a notice on the “Key Points of Supervision of the Electricity Market in the Southern Region in 2022”, organizing the revision of the “two detailed rules” in the southern region. Promote more market entities such as energy storage and virtual power plant to be included in the “two detailed rules” assessment and compensation management, and study the addition of new types of auxiliary services.

Organize dispatching agencies to formulate operating procedures, norms and standards for third-party entities such as new energy storage, virtual power plant, etc. Whether in terms of policy norms, technical standards or market mechanisms, the successive introduction of these policies has brought virtual power plant to an important position in the development of energy storage projects.

Virtual power plant business

So, what exactly can a virtual power plant do? To sum up, it is mainly reflected in the following three aspects:

● Source:

Inject new sources of electricity into the grid. Let more small distributed new energy power sources be connected to the system platform in an organized way, unified and coordinated management, to form a joint force, relatively controllable, and realize the operation of integration into the power grid.

● Control power flow:

Control and adjust the power flow direction and flow on the power consumption side. Connect as many adjustable power loads as possible, so that they can use electricity according to the plan in a disciplined manner, and improve energy efficiency management, so as to achieve maximum power consumption without affecting production and living. Power generation (if any) situation, various electricity costs, power grid demand side control and other factors, scientifically, rationally and most economically arrange the electricity consumption plan.

● Power reserve:

Storing electricity is known as energy storage. Energy storage is the key support for the realization of the above two aspects. Small-scale new energy power scattered in various places also needs to be converged to have more power and more operating space, that is, to converge to the supporting energy storage system. For power flow control, a supporting energy storage system is also required to be able to formulate the best electricity consumption plan more flexibly. It can be said that a reliable virtual power plant is inseparable from an efficient and stable energy storage system.

Development status of virtual power plant

In fact, virtual power plants are not new. Since the 1990s, virtual power plants have received extensive attention from many countries in North America and Europe. European countries focus on distributed power + energy storage, mainly considering the realization of reliable grid connection, intelligent interaction and participation in the power market of distributed power generation, and creating a business model for sustainable and stable development;

North America is based on the development and evolution of demand response, taking into account the utilization of renewable energy, and hopes to improve the utilization efficiency of comprehensive energy through independent demand response and energy efficiency management. Therefore, controllable loads dominate.

Adhering to the fine tradition of “inclusiveness and learning from others’ strengths”, China absorbs two technologies and models at the same time. To a certain extent, this is also our late-mover advantage. In the context of dual carbon, the development of new power systems has become a future trend, and how to absorb a wide range of clean energy has become the focus of technological innovation and business models.

Regardless of the market environment, it is difficult to do business, and the virtual power plant can be successfully implemented from design to successful implementation without the joint support of controllable resources, key technologies and electricity market mechanisms.

Since 2019, demonstration projects of virtual power plants have been launched one after another, which have achieved fruitful results in both economic and social aspects. At the end of 2019, the State Grid Jibei Virtual Power Plant Demonstration Project was put into operation. The data shows that by 2020, the air-conditioning load of the northern Hebei power grid will reach 6 million kilowatts in summer, and 10% of the air-conditioning load will respond in real time through the virtual power plant, which is equivalent to building one less traditional power plant of 600,000 kilowatts;

The maximum load of “coal-to-electricity” will reach 2 million kilowatts, and the regenerative electric heating load will respond in real time through the virtual power plant. From May 5 to 6, 2021, State Grid launched China’s first power demand response operation based on virtual power plant technology in Shanghai, which can generate 150,000 kWh of electricity in just one hour of testing. In this test, the accumulative power grid load was adjusted by 562,000 kilowatts, 1.236 million kilowatt-hours of clean energy were consumed, and carbon emissions were reduced by about 336 tons.

In November 2021, China’s first grid-ground integrated virtual power plant operation management platform jointly developed by China Southern Power Grid Shenzhen Power Supply Bureau and China Southern Power Grid Research Institute was put into trial operation in Shenzhen. The platform is deployed in the Southern Network Dispatching Cloud, which can be directly dispatched at both the network and provincial levels.It provides a solution for the transformation of the traditional “source-load-moving” scheduling mode into a new “source-load interaction” mode.

Since then, virtual power plants in Zhejiang, Hubei, Anhui, Guangdong and other places have landed one after another. Deepening the reform of the power system and building a new power system with new energy as the main body is an important task to achieve the dual carbon goal. The new power system emphasizes taking new energy as the main body, improving the consumption of clean energy such as photovoltaics and wind power, and the energy transformation will generate demand for energy storage and a more digital and intelligent power system.

As an energy digital platform that coordinates distributed resources to participate in the power trading market and demand response, virtual power plant will usher in rapid development in the current period when industrial policies and market demands continue to increase.