Virtual power plant operations and technology provider Vpptech has completed a pre-A round of financing worth tens of millions of yuan, following joint investment by Sequoia China Seed Fund and China Merchants Venture, as reported by Chinese media outlet 36Kr on August 24.
Under China’s goals of “carbon peaking and carbon neutrality,” the proportion of renewable energy usage is gradually increasing. However, this poses a few key challenges for the power grid.
Liu Yuankun, founder of the firm, said that for a power system with wind power installed capacity exceeding 5 GW, a low wind speed change of 1 m/s can cause a change in installed generating capacity of 500 MW. Therefore, a new type of power system needs to be more flexible and have more varied resources.
There are about four solutions that can provide such flexible resources, such as energy storage, virtual power plants, pumped storage and thermal power unit adjustment. Virtual power plants are a simpler way of asset-light strategy, linking various types of flexible resources at the power end through digital technologies and realizing optimal scheduling and precise control of different massive distributed heterogeneous resources. In the end, the technical function forms of physical power plants as a whole are presented.
The company helps customers establish intelligent operation systems for virtual power plants, meeting low-cost, flexible and controllable energy consumption needs. It also participates in power demand response and ancillary services to help customers obtain additional economic benefits, as well as energy-saving and carbon-reduction value.
Liu estimates that the market size of virtual power plants in China will be 10 billion yuan ($1.46 billion) in 2022. In order to achieve the sustainability goals, the industry’s market size will probably reach 100 billion yuan per year by 2030.
Liu also said that the competitiveness of the company, established in 2021, lies in two aspects. First, its team is the earliest actual virtual power plant operator in China, and second is the firm’s data science and algorithmic abilities.
At present, the firm’s business shows explosive growth, and it has cooperated with power grids in five regions including North China, Northwest China, Hebei, Shanxi and Shandong provinces to provide auxiliary services, covering nearly 1 million kW of controllable load capacity.