What pain point does the rise of Virtual Power Plants respond to in the new energy industry?

I. Virtual grid development background: energy demand transformation, prominent contradiction of power supply and demand

Generally speaking, it would be around the generation and consumption of electricity, presently divided into the measurement of power generation, the grid side, and measurement of electricity.

The power grid has strict requirements for operation safety, and the primary goal of power grid security is to ensure the reality of power generation in time balance. Therefore, constant adjustment on the generating side is required to fit the load curve.

New energy power generation relies heavily on natural resources, such as light intensity and wind intensity, with randomness, intermittency, and volatility, which are not enough to support the load.

If it is directly connected to the power grid, the influence on the latter would be immense, thus threatening safety and stability in the supply of power. Also, the scale of new energy power generation facilities and energy storage facilities distributed is small.

Therefore, the power-consuming side controls the continuous development and popularization of electrical equipment and electric vehicles. Controlling it will make most of the power users in many places turn from the previous single consumer to production and marketing, and it should be possible to get hold of various kinds of high-power electrical equipment surging. For instance, piles have made many “electricity gobbling” behaviors. The grid cried out loud obviously does not want to leave it open. In this context, the concept of a “virtual power plant” came into being with the new power generation situation.

Ⅱ、Supply side: thermal power generation is still dominant, hydropower and wind power generation are unstable

Power generation structure: China’s power generation is still dominated by thermal power generation. The proportion of thermal power generation in 2021 is 71.13%, that of hydroelectricity is 14.6%, wind power is 6.99%, nuclear power is 5.02%

Solar power generation accounted for 2.26%. As the price of coal goes up, generating power becomes costlier, and thereby thermal power generation is on its way up.

Factories’ willingness to generate electricity has fallen.

Uneven distribution of photovoltaic power generation capacity: In the first quarter of 2022, the country’s newly installed grid-connected photovoltaic capacity reached 13.21 million kilowatts, an increase of 138% compared to the same period last year. The provinces with large new installed capacity are Hebei 1.8 million kilowatts, Zhejiang 1.64 million kilowatts, and Shandong 1.5 million kilowatts. Affected by geographical location and natural conditions, the distribution of light energy resources is not uniform, and the installed capacity varies greatly among provinces.

Uneven distribution of wind power installed capacity: In the first quarter of 2022, 7.9 million kilowatts of wind power were newly connected to the grid.

That’s up 16.7 percent year-on-year. The new provinces and regions with a large scale of grid connection are mainly Jilin 1.63 million kilowatts, Gansu 900,000 kilowatts and Shanxi 680,000 kilowatts. By the end of March, the country’s wind power had been connected to the grid by 337 million kilowatts, a year-on-year rise of 17.6 percent. In the first quarter, 360,000 kW of new offshore wind power was connected to the grid, affected by the expiration of national subsidies for offshore wind power at the end of 2021. The new installed capacity of offshore wind power slowed down, down 79% year-on-year.

Ⅲ、 The total amount and structural changes of the power side increase the peak load

The total amount of electricity load has repeatedly reached a new high: the current short-term peak load of social electricity consumption continues to rise, extremely

The end of the weather in summer 2022 has had a profound impact on regional power supply and demand in some areas of China, with the load of the national grid 5 regional power grids and 19 provincial power grids repeatedly reaching a new high, and Sichuan and other provinces have launched power rationing measures.

The change of power demand structure and the deterioration of power load characteristics: in recent years, the growth of power consumption in the tertiary industry and urban and rural residents has formed the characteristics of “daily double peaks,” while widening the peak and valley difference of power load and further complicating and highlighting the energy and power supply situation. Taking Shanghai as an example, in summer 2020, the highest peak-to-valley difference rate was as high as 43%, leading to the local generating units having to be frequently started or shut down, with consequences in terms of unit safety.

Ⅳ、Virtual power plants are flexible and economical

flexibility

The load side of such resources includes electricity load, energy storage, and distributed resources. Through

It combines information means with technical automation means in such a way that it becomes characterized like a power plant. It can function like a “positive power plant” for feeding purposes, controlling adjustable load peaking and adjusting, becoming a “negative power plant” that enhances the soaking up of loads and coordinately working with valley-filling, hence realizing aggregating management, local consumption, and flexible operation on the new energy at a distribution network side.

Economy

The input cost is about 1/8 of that of a thermal power plant. The power supply and demand relationship between east and west of China is tight, the power peak and valley

The difference of contradiction has highlighted, and the accumulated hours of over 95% annual peak load is less than 50 hours at various places, which means the peak-valley difference problem can be eased through various approaches. But overall, virtual power plants become the way to go on peak shaving and valley filling with the lowest investment costs as virtual power plant technologies mature gradually.

Since the investment required to meet the peak load demand of 5% in its operating area by peaking and valley filling through a thermal power plant was estimated to be 400 billion yuan, while only 50-60 billion yuan was invested in virtual power plants during the construction, operation, incentive, and other links, both the needs of environmental protection and input cost reduction will be met.