• Virtual Power Plants
  • Clean Energy
  • DER
  • Demand Response
  • Asia Pacific

Consortium Partnerships Driving VPPs in Asia Pacific: Part 2

Pritil Gunjan
Aug 27, 2020

Guidehouse Insights

The Asia Pacific region has embraced a mixed-asset VPP model that includes everything from diesel generators to solar PV and batteries, though some VPPs are more focused on thermal energy than electricity. In Part 1 of this two part series, I discussed the rapid development of distributed energy resources (DER) in the Asia Pacific region. Market drivers such as the growing penetration of renewables, market deregulation, climate and sustainability targets, and partnership opportunities are expected to outweigh barriers and drive the growth of VPPs. This blog highlights a case study of companies and consortiums looking to address this accelerating opportunity area.

Malaysian and South Korean VPP Projects Lead the Way

The Malaysian government set a goal of 20% clean energy generation for national power generation capacity by 2030. Large-scale solar energy auctions continue to be conducted, as the government introduced a revised 500 MW net energy metering scheme aimed primarily at boosting solar and renewable power generation in the commercial and industrial sector.

Led by I-ON Communications, a South Korea-based global enterprise software company and established demand response (DR) solutions provider in the Asia Pacific region, a Korean consortium is demonstrating VPP business models and technologies. In addition to I-ON Communications, the consortium includes Busan City Gas, KH Shinhwa SnC, and the research arm of the Malaysian-integrated utility, Tenaga Nasional Berhad. The 3-year project will focus on the energy needs of Malaysian utilities and businesses. According to Cision PR Newswire, the $7 million project “will be financed through entities directly affiliated with both the Malaysian and South Korean governments, including involvement from the Korea Institute of Energy Technology Evaluation and Planning.” The consortium plans to launch EIP, an integrated VPP platform offered by I-ON Communications, which includes a software platform, hardware (an energy storage system including battery and power control systems/power management systems), and the software solution encompassing integrated VPP business and financial models that can be tailored to various market policies and regulations.

An integrated VPP platform such as EIP will offer energy providers a comprehensive and customized end-to-end solution ensuring regulatory alignment through a practical grid interface. The platform can also allow third parties to join a VPP ecosystem with their hardware/software by supporting various APIs and protocol adaptors. Energy digitization solutions are quickly becoming game changers in the dynamic distributed energy industry. These solutions are automatically operated by well-planned schedules that minimize human intervention with resource management by supporting AI and machine learning-based scheduling and forecasting features. Key features of EIP include timeseries-driven and real-time data gathering, processing, and monitoring; anomaly detection; portfolio management; and DER consolidation.

Drivers Initiate Long-Term Growth for VPPs

Flexible capacity across Malaysia is anticipated to remain a critical growing opportunity as additional DER connect to the country’s grid systems. The rapid rate of technological development, drive to reduce emissions, need for grid reliability and resilience, and desire for grid operators to maintain strong relationships with their customer base as markets deregulate should support the growth of VPPs in similar countries in the Asia Pacific region.

In the longer term, flexible capacity supported by small-scale pilots and commercial DR programs will evolve toward optimization of a portfolio of assets. The Asia Pacific market offers integrated program providers and technology vendors the opportunity for lateral growth and presents a compelling value proposition across an end-to-end energy value chain.