While this promotes the achievement of dual-carbon goals, it will also create a hidden danger: an extreme mismatch between the power generation side and the power consumption side.
The location of new energy power plants is often limited by the abundance of local resources, and is characterized by randomness, intermittency, and volatility.
Solar, wind, and hydropower resources are "dependent on the weather." In different seasons, resource-rich areas have more electricity than they can use, while resource-poor areas have no electricity at all.
In the 21st century, mobile phones, computers, air conditioners, refrigerators, washing machines... all kinds of electrical equipment cover every aspect of our lives. Once the power goes out, even breathing becomes difficult.
Energy storage facilities can help integrate electricity generated by new energy power plants into the grid, ensuring power security. But how can this be implemented?
For this problem, industry insiders are optimistic about the solution of virtual power plants.
Virtual power plants: the future commanders of the electricity market
Virtual power plants are a further upgrade of traditional power plants such as thermal power plants. They exist in an "invisible" form and have the added ability to schedule and integrate resources such as new energy power plants and energy storage facilities.
If we compare energy-related hardware facilities such as photovoltaic power generation bases, pumped storage power stations, offshore wind farms, various energy storage devices, and factory production lines to soldiers, then the virtual power plant that organically integrates source, grid, load, and storage is the commander, responsible for the unified dispatch of energy.
Through virtual power plants, the previously fragmented energy entities will be integrated to participate in the operation of the national grid and the trading of electricity in the electricity market.
Undoubtedly, virtual power plants will play a crucial role in achieving dual-carbon goals in China's new power system.
The trend is towards new power system stabilizers
Under China's new power system, both the generation and consumption sides are characterized by flexibility, randomness, and volatility, making it difficult for the existing power grid structure to carry out unified resource scheduling.
On the power generation side, traditional power plants such as thermal power plants offer flexible site selection and can effectively dispatch generator units according to users' real-time electricity demand during operation, achieving a balance between power supply and demand. The downside is the high pollution associated with non-renewable energy sources.
As traditional power plants are gradually replaced by new energy power plants such as hydropower, wind power, and photovoltaic power, pollution is no longer a concern. However, due to the limited availability of resources, the randomness, intermittency, and volatility of new energy power plants will inevitably become more prominent.
Water resources vary between rainy and dry seasons, sunlight differs between spring and winter, wind energy varies significantly in real time, and power plants are located at different latitudes and longitudes. Given my country's vast territory, ensuring the stable operation of the power grid is a complex task.
On the electricity consumption side, the growth of new energy vehicles, charging piles, and residential energy storage equipment has been significant in recent years. However, users are located in different regions with varying levels of development, resulting in vastly different density of electrical equipment deployments. This leads to significant randomness and fluctuations, making unified scheduling difficult.
In addition, the energy storage market has been booming in recent years, and rooftop photovoltaics have also developed significantly. The electricity consumption side has transitioned from simply consuming electricity to a two-way structure that takes into account both electricity consumption and power generation. This has increased the complexity of electricity consumption side resources, making it difficult for the power grid to regulate them accurately.
To address the imbalance and mismatch between the power generation and consumption sides, virtual power plants, acting as "stabilizers," can alleviate or even resolve this issue by leveraging the buffering effect of energy storage systems between the power generation and consumption sides.
Opportunities of the Times: New Mechanisms for Electricity Market Trading
Since 2015, the state has issued a series of policies and regulations, such as the "Opinions on Further Deepening the Reform of the Power System (Document No. 9 of 2015)," the "Regulations on the Management of Grid Connection and Operation of Grid-Connected Entities (Draft for Comments)," and the "Measures for the Management of Power System Ancillary Services (Draft for Comments)," which have gradually promoted the pace of my country's power market reform and formed a new power market mechanism.
The original electricity pricing mechanism was to "control both ends and compress the middle." That is, to limit the electricity prices at both the generation and consumption ends, while the State Grid Corporation's profit model in the middle was based on the purchase and sale price difference through centralized sales.
The new electricity pricing mechanism is "liberalizing both ends and regulating the middle." "Liberalizing both ends" means liberalizing electricity prices at both the generation and user ends, allowing power plants, electricity-consuming enterprises, and individual electricity users to have the opportunity to trade directly in the electricity market; "Regulating the middle" mainly clarifies the responsibilities of the State Grid Corporation of China, namely, to build and maintain power infrastructure, while changing the profit model to charging a proportional grid access fee.
The new electricity pricing mechanism reflects the new electricity market mechanism, with more participants in the electricity trading market, including power plants, electricity-consuming enterprises, and individual users; the types of electricity traded are further enriched, including wind power, hydropower, photovoltaic power, and energy storage.
In this way, virtual power plants have a way to monetize, namely by participating in power system ancillary services.
With the development of virtual power plants, the energy storage market will inevitably experience varying degrees of growth.
Empowering energy storage, creating a new model of mutual benefit and symbiosis.
In the future, with the increase of various new energy power plants, various energy storage facilities will also increase. After all, the intermittent and fluctuating characteristics of wind power, hydropower, photovoltaics and other power sources mean that they cannot be directly connected to the power grid.
Before electricity from new energy power plants is connected to the grid, energy storage facilities are needed to provide a buffer so that the grid can be replenished with electricity flexibly and in real time.
As energy storage facilities and new energy power plants expand to a certain extent, virtual power plants may have the opportunity to manage their own assets, driving further improvements in operational efficiency.
Similarly, the development of virtual power plants will also promote the upgrading of the energy storage industry and the new energy power industry.
Ultimately, the development of energy storage boils down to reducing costs and increasing revenue by developing new energy storage technologies while ensuring product performance.
As virtual power plants mature, the ways to monetize energy storage products will become more diversified, thus forming a two-in-one business operation model of "virtual power plant + energy storage".
Therefore, virtual power plants will function by coordinating the work of energy storage facilities and power plants, promoting each other and developing in parallel with energy storage.
