Feasibility of virtual power plants (VPPs) and its efficiency assessment through benefiting both the supply and demand sides in Chongming country, China

Abstract

The technical potential of power energy saving is the consequence of plant-side and demand-side characteristics. The paper aims to analyze the feasibility of virtual power plant by means of local renewable energy power plant construction and the update of high efficiency appliances located in electricity customers. The return on investment is carried out by using payback period and life cycle cost analysis. Results indicate that an optimal combined proportion of wind and PV plant is favorable to increase the power self-support sufficiency in Chongming based on existing policies. The implementation of high efficiency appliances in household and tertiary industry can form the VPPs with a total capacity of 63 MW, achieves total electricity saving 273GWH/year. The new electricity market structure via changing feed-in tariffs and electricity price was built to analyze the economic performance of plant and demand sides. Based on the findings, we argue that an optimal return from plant's increase profit is favorable to incentive payment mechanism in VPPs, optimal cash flow delivered from the plant side is sensitive to expected payback period of the VPPs formed in demand side.