Flexibility

China: Power system flexibility is important for increasing the share of renewables and can facilitate China’s carbon peaking and neutrality targets through the power sector. The lack of power system flexibility in China spans power generation, grid, demand side and storage, and is driven by factor such as technology barriers, dysfunctional market mechanisms, and investment constrains. The Chinese government outlines renewable integration and power system flexibility through different national level policies. China’s 14th FYP released in March 2021 required a flexibility upgrade for coal-fired power plant fleet. In November 2021, NDRC and NEA released a new policy on coal power plant retrofitting and upgrading to promote flexibility the country’s coal fleet. 200 GW of capacity has been committed to retrofitting during the 14th FYP, ultimately aiming at the integration of more renewables into power system. In November 2023, NDRC and NEA issued a policy note dealing with capacity pricing for coal power plants to improve their role in system flexibility.

Germany: To reach climate neutrality by 2045, Germany will need to increase its renewable energy production and, along with it, its power system flexibility. Over the past decades, Germany has developed and implemented solutions, including establishing market rules to enable competition between flexibility measures and adopting a technology-neutral approach to ensure a diverse mix of technologies and participants. As Germany progresses towards a renewable based power system, conventional power plants currently serve as crucial sources of flexibility. The phase-out of nuclear power early 2024 and the planned phase-out of coal plants by 2038 necessitates the adoption of alternative flexibility options. Gas-fired power plants using green hydrogen, energy storage solutions, demand-side flexibility in the industry, as well as system operation regulations will assume a growing significance in Germany’s energy landscape.

Our Goal

The Sino-German Energy Partnership continues the bilateral exchange and political advice on relevant policy research and market design to enhance the flexibility of the power system in Germany and China. With a special focus on advancing exchange between Chinese government think tanks and German research institutions, the energy partnership strengthens the Sino-German scientific exchange on the energy transition and share German energy transition experiences with a Chinese audience.

Our Activities and Results

Digital and Flexible: Smart Grids

The electricity systems undergo fundamental changes with increased share of fluctuating renewable energy and the trend of two-way flow of electricity due to distributed renewables. Smart grids, using information and communication technology (ICT) for dynamic system control, can support the bidirectional flow of data and electricity and ensure energy security in an integral way.

[Report] To better map and understand the status quo and future potentials of smart grid in China and Germany, we worked together with dena and Chinese power system and grid expert in China and published two reports on smart grids development in Germany and China, respectively. Besides providing an overview on the status quo, the reports explore successful German smart grid development ideas and projects, and map the smart grid development trend in China. Both reports serve policy makers, researchers and industries of both countries to improve future smart grid policies and explore further cooperation on smart grid solutions.

[Workshop] To facilitate a deeper exchange between German and Chinese experts, we organised the Sino-German expert workshop on smart grid together with State Grid Energy Research Institute Co. Ltd,. The workshop focused on the current status, challenges and trends of smart grid in both countries. Next to discussing the role of smart grid in promoting renewable energy development, and supporting the low carbon transition in power systems, the exchange explored further cooperation potentials between China and Germany on smart grids.
Demand-side Flexibility and Virtual Power Plants (VPPs)

Virtual Power Plants (VPPs) which centrally coordinate distributed energy resources (DERs) close to demand and consumers, represent an important measure for improving power system flexibility. VPPs aggregate distributed renewable generation, energy consumers, and storage into a sizable portfolio and allow for monitoring, forecasting, optimising, and dispatching in line with power system demands to provide flexibility services.

[Report] To better understand the status quo of VPP development in both countries, the Energy Partnership worked together with Wuppertal Institute and North China Electric Power University (NCEPU) to introduce the business model of VPP in Germany and analyzed the VPP development and challenges facing in Shanxi province China by publishing two reports - Business Models of Virtual Power Plants in Germany and Power System Flexibility and Virtual Power Plant in Shanxi Province. The two reports offer key insights on German VPP development, showcases German VPP business models and take Shanxi province, China’s coal dominated region, as an example to explore the status and development models of VPP under current policies and market mechanisms of China’s power system.

[Workshop] The Energy Partnership organised a workshop with Shanxi Provincial Energy Bureau and North China Electric Power University to introduce the implementation experience of VPPs in Germany. Further exchange took place on the development and situation of the Shanxi power market and VPPs while discussing the potential of Sino-German cooperation on power system flexibility and VPPs in Shanxi.

Flexibility

Our Goal

Our Activities and Results

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