Virtual Power Plant: A New Smart Platform Connecting the Future of Energy (Part 2)
2026-08-12
Main Business Models of Virtual Power Plants
A virtual power plant (VPP) is not only a technological system but also a new type of energy business model. Currently, its value is mainly reflected in three areas: demand response, ancillary services, and spot electricity trading.
- Peak Shaving and Valley Filling: Earning Revenue from Ancillary Services
During periods of peak electricity demand, such as summer heatwaves or winter cold snaps, grid loads rise rapidly. The traditional approach often relies on starting up backup power sources or increasing output from thermal units, which is costly and offers limited flexibility.
By aggregating resources such as energy storage systems, adjustable loads, and charging facilities, a VPP can coordinate a unified response during peak hours. For example, industrial and commercial storage systems can discharge electricity, shopping mall air conditioning can be moderately set to higher temperatures, and electric vehicle charging piles can temporarily reduce charging rates. Through these measures, the overall urban electricity load can be reduced in a short period, effectively functioning as an invisible peaking power plant for the grid.
In this way, the VPP can participate in the ancillary services market and receive corresponding compensation for peak shaving and demand response.
- Spot Market Trading: Capturing Market Gains by Buying Low and Selling High
As the share of renewable energy generation continues to rise, electricity price fluctuations across different time periods have become more pronounced. At midday, when solar PV output is abundant, prices may drop to relatively low levels; in the evening, as peak demand arrives, prices can rise significantly.
A VPP can carry out smart scheduling based on price changes: charging energy storage systems and EVs during low-price periods, and discharging stored electricity or reducing demand during high-price periods, thereby capturing trading profits by buying low and selling high.
This model not only improves renewable energy integration but also delivers more direct economic value for participating enterprises.
Future Development Trends of Virtual Power Plants
As electricity market reforms continue to deepen, and with rapid growth in new energy vehicles, distributed PV, and industrial/commercial energy storage, VPPs are poised for even broader development. Looking ahead, the key trends are mainly reflected in the following three aspects.
- From Manual Response to Automated Response
Early demand response often relied on manual notifications and manual confirmations, resulting in slow response times. In the future, VPPs will increasingly depend on automated systems, smart contracts, and digital trading mechanisms to achieve real-time recognition of electricity prices, load conditions, and grid requirements, and automatically execute dispatch commands.
This means that energy dispatch will gradually evolve from passive response to active optimization.
- Households and Electric Vehicles Becoming Key Participants
In the future, the participants in VPPs will no longer be limited to factories, industrial parks, and commercial complexes. With the advancement of V2G (vehicle-to-grid) technology, electric vehicles are also expected to become important distributed storage resources.
Vehicle owners can charge their cars during off-peak hours and, during peak hours, feed surplus power back into the grid, earning revenue in return. Home PV systems, residential energy storage, and smart home appliances will also gradually be integrated into VPPs, allowing ordinary users to become both contributors and beneficiaries in the new power system.
- Deep Integration with Carbon Assets and Green Electricity Management
Against the backdrop of the "dual carbon" goals, enterprises are not only concerned about energy costs but are also placing increasing emphasis on green energy use and carbon asset management. In the future, VPPs will be deeply integrated with green electricity trading, carbon management, and green certificate mechanisms.
By prioritizing the aggregation of green energy resources, VPPs can help enterprises increase their share of green electricity usage, reduce energy costs, and enhance carbon management capabilities, providing strong support for their low-carbon transition.
Summary of Virtual Power Plant Development
Virtual power plants are advancing rapidly through a dual track approach driven by commercial value and technological capability upgrades. On the business model front, by providing peak shaving and valley filling services in the ancillary services market and executing flexible buy low/sell high strategies in the spot electricity market, VPPs are transforming distributed energy resources into sustainable digital assets. In terms of future trends, with greater automation in dispatching, broader participation from V2G and household energy systems, and deeper integration with carbon assets and green electricity frameworks, VPPs will evolve from controllable aggregates into full scenario smart energy networks. It is foreseeable that virtual power plants will not only reshape the operational model of the power system but also become a key driving force in advancing the low carbon energy transition and building the new generation power system.