Virtual power plant - a new power system blue ocean

With the deepening of energy transformation and home energy storage, the high proportion of new energy connected to the power grid, which brings huge pressure on peak regulation and frequency regulation, virtual power plant emerges as the times require. A virtual power plant is a new type of power system that can efficiently utilize large-scale new energy power and is a promising development direction for the power industry in the future. China's virtual power plants are still in the initial stage of development, and there is a broad space for development on both sides of supply and demand.

1. Overview of the virtual power plant industry

A virtual power plant (VPP) is defined as a smart energy source that aggregates one or more resources such as adjustable load, energy storage side and power supply side in different spaces to achieve autonomous coordination and optimal control, and participate in power system operation and power market transactions system. A virtual power plant is a cross-space, wide-area source-network-load-storage integrator. "Virtual" refers to its existence without a physical power plant. "Power plant" means that it has certain attributes of a power plant, such as providing auxiliary services such as peak regulation and frequency regulation, participating in the electricity market and obtaining benefits.

The core of the virtual power plant is communication and aggregation. Through advanced technologies such as 5G communication technology, artificial intelligence, edge computing, and blockchain, the distributed energy supply (DER) distributed in the grid, such as distributed power (DG), controllable loads, energy storage, and electric vehicles, will be aggregated and coordinated. As a special power plant, the virtual power plant participates in the power supply coordination management system of the power market and grid operation. It realizes multi-energy complementation on the power supply side and flexible interaction on the load side, and provides auxiliary services such as peak regulation, frequency regulation, and backup to the power grid, and achieves similar effects as conventional power plants.

In physical space, there is no need to actually build a power plant. The virtual power plant emphasizes the concept of "aggregation". On the basis of the physical structure of the traditional power grid, the energy management system is used to integrate the decentralized power generation/consumption entities into a virtual controllable aggregate. The most attractive function of the virtual power plant is that it can aggregate various types of distributed resources to participate in the operation of the electricity market. The new energy represented by wind energy and solar energy has significant intermittent and strong random volatility.

The power generation method that uses this as primary energy will not only inherit these characteristics, but also produce regular changes over time and space. Therefore, if multiple new energy generating units of a single form are connected to the large power grid on a large scale, serious system stability problems will occur, which will be a bottleneck restricting the large-scale development and utilization of new energy power. The mode of integrating new energy power provided by virtual power plants with traditional energy and energy storage devices can present stable power output characteristics to large power grids under the support of intelligent coordinated regulation and decision-making, and promote the safe and efficient use of new energy power.

As one of the business models of energy storage, virtual power plant participates in the operation and dispatch of power grids through distributed power management systems. Virtual power plant is mainly composed of three parts: power generation system, energy storage equipment and communication system. It is a new generation of intelligent control technology and interactive business model for clean and low-carbon development. Virtual power plants can generate benefits in all aspects of end users, distributed power sources, grids and energy service providers. Under the aggregation of virtual power plants, users such as enterprises and residents can participate in electricity market transactions, including medium and long-term markets and real-time balance markets.

2. Virtual power plant industry chain

The industrial chain structure of virtual power plant consists of upstream basic resources, midstream system platforms, and downstream power demanders.

The upstream basic resources mainly include adjustable loads, distributed power sources and energy storage equipment. The key application fields of adjustable load mainly include industry, construction and residential. Midstream resource aggregators mainly rely on the Internet, big data, etc., to integrate, optimize, schedule, and make decisions from all levels of data and information, and enhance the unified coordination and control capabilities of virtual power plants. It is a key link in the virtual power plant industry chain.

The downstream of the industrial chain is the electricity demand side, which consists of power grid companies, electricity sales companies and large users. Power generation enterprises, power grid companies, and power users benefit in many ways. Power generation enterprises can improve the utilization efficiency of existing units. Power grid companies can improve the safe and stable operation of power grids. Provide power users with convenient technical means for participation, market-oriented participation channels and sustainable business models.

3. Virtual power plant market structure

As a highly capital, resource and technology-intensive industry, virtual power plants have certain barriers to entry. Due to the huge development potential of the industry, it has attracted companies from many fields to enter the market. There are various types of companies, but the market concentration is not high and the competition is relatively fierce. The development of virtual power plants in developed countries in Europe and the United States is relatively mature, and there are some small-scale demonstration projects that can be used for reference.

Since 2001, European countries have begun to carry out research projects on virtual power plants with the main goal of integrating small and medium-sized distributed generation units. From the perspective of the Chinese market, companies with virtual power plant business have inherent advantages and are the main force in current demonstration projects, such as National Network Information and Communication Industry Group, NARI, YGSOFT, etc. At present, major companies are accelerating their entry into the digital energy industry.

On the one hand, technology-based companies represented by HUAWEI as one of the top 5 inverter battery companies in China, ZTE, Fii, etc. have entered the digital energy field by setting up independent departments or subsidiaries. On the other hand, traditional energy companies have successively established digital companies to accelerate the digital transformation of energy. At present, there have been successful and profitable virtual power plant projects in China. According to the data of Guangdong electric power spot market on May 26, CPI Shenzhen Electric POWER MARKETING made a profit through this test, with an average income of 0.274 RMB per kilowatt-hour, becoming the first case in China in which a virtual power plant dispatches user loads to participate in the profitability of the electric power spot market.

In addition, Shanghai, Jiangsu, Hebei and other places have also started the pilot construction and operation of virtual power plants. In recent years, in order to adapt to the transformation of the energy structure, the Chinese government has issued a series of policies to promote the improvement of a unified national electricity market system. Support the cultivation of multiple competitive market players, and encourage virtual power plants to participate in electricity market transactions and system operation adjustment.

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