Virtual Power Plants (VPPs): Market Mechanisms and Applications in China

Abstract

Growing penetration rate of renewable energy in China's electricity system results in the decrease of grid flexibility. And virtual power plant (VPP) as a promising solution is drawing growing attention. However, as VPP is in the early development stage in China, the mechanisms that VPPs can apply are yet limited. This paper reviews the current market mechanisms for VPP to participate in China, and investigates several application cases with different proceeding emphasis, and concludes that ancillary service market is a more effective way to promote VPP development at current stage.