Hitachi Energy is providing digital technology and advisory services for a virtual power plant (VPP) operated by Zhejiang Energy, a provincial energy provider in south-east China’s Zhejiang province.

This leverages digital methods to offer efficient and flexible settlement management and strategy application services, orderly integrating the VPP platform into regular power system operations and paving the way for full participation in Zhejiang’s electricity market transactions.

With the rapid development of policies and the electricity market, VPPs, an energy management model based on digital technology and intelligent energy management systems, are gradually emerging as key to building new power systems. Zhejiang province has introduced a series of policy measures to support the industry. In 2024, it launched a pilot plan promoting VPP participation in ancillary service markets through policy and market-driven approaches.

In 2024, Hitachi Energy’s consultants helped Zhejiang Energy (www.zjenergy.com.cn) build its first VPP project by integrating resources to provide auxiliary services to the grid, enhancing grid regulation and improving supply-demand balance. Guided by Zhejiang Energy’s planning, Hitachi will provide customised algorithm development services and advice for the platform’s trading and settlement module, along with supporting hardware equipment.

This upgrade will let VPPs accurately calculate settlement fees and reasonably validate settlement assessments from higher-level market operators. It ensures efficient resource use and fair distribution of participant benefits while meeting market rules and regulatory requirements, thereby supporting high-standard participation in VPP ancillary services and electricity market transactions.

“VPP plays an essential role in building a new type of power system by increasing grid flexibility and renewable energy use,” said James Zhao, executive vice president at Hitachi Energy (www.hitachienergy.com). “We’re delighted to partner with Zhejiang Energy again to deploy VPP settlement business in China with digital innovation, providing a reliable and intelligent platform and domain expertise for their diversified business operations. We look forward to continuously pushing the boundaries of technology with more customers and partners, driving the power system towards a more low-carbon, efficient and intelligent future to inspire the next era of sustainable energy.”

As a major province for industry and manufacturing, Zhejiang (www.ezhejiang.gov.cn) ranks among the top four regions in the country in terms of electricity consumption. In 2024, the total electricity consumption in Zhejiang exceeded 678bn kWh, making a year-over-year increase of nearly 9.5 per cent. As summer begins, the high temperatures in southern regions typically pose greater challenges for local power supplies. As an intangible energy hub, the VPP platform can provide various auxiliary services, such as peak load regulation, frequency response and backup generation through intelligent power supply, grid, load and energy storage interaction.

The VPP platform has connected over 200 user-side resources in the province, aggregating multiple energy resources, including energy storage and adjustable loads. Relying on digital coordinated control technology, it provides real-time responses and optimisations to dispatch commands, aiding in managing the tension on electricity supply and demand while ensuring the stable operation of the power grid. Additionally, the VPP acts as a stabiliser, mitigating the intermittency in new energy generation and enhancing the efficiency of renewable energy use in Zhejiang.