Financial News Agency, December 8 (Reporter Guo Songqiao) - The Natural Resources Protection Association (NRDC) held a report conference in Beijing and released the latest research results: “Analysis of the Development Status of Virtual Power Plants in the Yangtze River Delta”, which put forward policy suggestions on the construction path and development of virtual power plants in China.

A reporter from the Financial Association News Agency learned from the press conference that in terms of business models, virtual power plants are currently still in the exploration stage in China, mainly based on solicitation-type demand responses.

Since this year, virtual power plant construction equipment has received market attention. In the “Certain Opinions on Supporting the Deepening and Expansion of Special Economic Functions in the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone, which is at the forefront of high-quality development” issued recently, it is proposed to promote the construction of virtual power plants, carry out the application of energy storage demonstration projects, and improve the efficiency of comprehensive energy utilization.

A virtual power plant refers to a physical or economic entity with power market transactions or grid interaction capabilities formed by aggregating demand-side resources such as adjustable loads, distributed power supplies, and energy storage distributed in a certain area and applying digital intelligence and other technologies.

According to the “Yangtze River Delta Virtual Power Plant Analysis”, the Yangtze River Delta region has diverse types of terminal energy consumption, and the development potential of virtual power plants is huge. There is a clear gap between electricity supply and demand in the Yangtze River Delta, and there is an urgent need to push forward the construction of virtual power plants.

Xu Xiangmin, deputy general manager of Suzhou China Consulting Engineering Consulting Company, said in an interview with a reporter from the Financial Association that the rise of virtual power plants reflects the problems facing China's power system such as insufficient regulation and high pressure on insurance and supply. At present, China has launched pilot projects for virtual power plants, and various regions are promoting various projects. Through these practices, rich experience and a large amount of data have been accumulated. However, as an emerging power regulation method, virtual power plants are still in the early stages of development. These projects mainly focus on research and demonstration, and also face some problems, such as the relatively low level of actual use of technology, limited application scenarios, and unclear cooperation mechanisms and market mechanisms between relevant parties. Most projects are still in the demand response phase and are not yet able to bid on the same platform as conventional power plants. Therefore, the actual effects and effects of virtual power plants are relatively limited.

Guohai Securities believes that from an industry perspective, virtual power plants are an important part of the flexible resources of the power system, and virtual power plants in China are still in the early stages of development. Currently, Jiangsu, Zhejiang, Shanghai and other regions have implemented virtual power plants. The main response resources include energy storage facilities, charging stations, residents, buildings, etc. With the increase in the penetration rate of new energy sources and the gradual improvement of new power systems, the virtual power plant market space is expected to open up.

The development potential of virtual power plants has attracted companies in many fields to enter the market. A financial news agency reporter noticed that among A-shares, several companies participated in the construction of the virtual power plant industry chain. These include Dongfang Electronics, Guoneng Nissin, Nanwang Technology, Hengshi Technology, and Zhiguang Electric.

Xu Xiangmin pointed out that the virtual power plant industry chain covers many links, mainly including upstream adjustable loads, basic resources such as distributed power sources and energy storage equipment, midstream virtual power plant platforms, and downstream power demand parties, including power grid companies, power sales companies, and large users. Upstream, adjustable load refers to the part of the power system that can respond to changes in power system demand by adjusting the operating state. Distributed power sources include distributed power generation and renewable energy generation, while energy storage equipment can store electric energy to meet demand. The midstream virtual power plant platform is a key link in the entire industrial chain. These platforms use technologies such as the Internet and big data to achieve unified coordination and control of various data and information through integration, optimization, scheduling, and decision-making. This enables the efficient operation of virtual power plants, effective integration of upstream resources and flexible response to downstream requirements. Downstream, power demand parties include power grid companies, power sales companies, and major users. These aspects require obtaining power resources from virtual power plants to meet their own electricity needs or conduct electricity transactions.

China Telecommunication Union's forecast shows that by 2025 and 2030, China's maximum load will reach 1.63 billion kilowatts and 2.01 billion kilowatts, respectively. If 5% of China's peak load demand is met, the demand for adjustable load resources will reach 80 million kilowatts and 100 million kilowatts, respectively. From the perspective of investment and earnings, the State Grid data shows that the investment cost of a virtual power plant's adjustable load resource bank is about 900-1,000 yuan per kilowatt, while the operating efficiency is about 60-70 yuan per kilowatt.

“According to this estimate, by 2025 and 2030, China's virtual power plant investment market is expected to reach 75 billion yuan and 95 billion yuan respectively; corresponding operating benefits are expected to reach 5 billion yuan and 6.5 billion yuan, respectively. This highlights the investment appeal and potential profit potential of virtual power plants in future markets.” Heo Sang-min said.

Xu Xiangmin further analyzed that as power market-based reforms continue to advance, virtual power plants are expected to participate more actively in electricity market transactions, and their scale may expand further. This means that virtual power plants will have more opportunities to obtain a wider range of benefits through market-based means rather than simply relying on a government solicitation model. In the long run, virtual power plants have huge potential for development in the market.