China is stepping up efforts to develop virtual power plants (VPPs), with new policy guidelines released this week by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA).
Original By NLS
China is stepping up efforts to develop virtual power plants (VPPs), with new policy guidelines released this week by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA). The move is part of a broader push to modernize grid operations and better integrate distributed energy resources.
The joint guidance — officially titled Guiding Opinions on Accelerating the Development of Virtual Power Plants (Document No. 357 [2025]) — defines VPPs as digital platforms that pool together distributed energy sources, flexible loads, and energy storage systems. These virtual aggregators act as unified players in electricity markets and help optimize grid operations.
By 2027, China aims to have more than 20 GW of flexible capacity managed by VPPs, supported by standardized regulatory frameworks and fully operational market mechanisms. By 2030, the country expects VPP-regulated capacity to exceed 50 GW, with a broader range of business models and application scenarios in place.
The policy calls for tailored VPP development based on local energy profiles and market conditions. It encourages utilities, private companies, and firms across the energy value chain to invest in building and operating VPPs. Scenarios highlighted for large-scale rollout include peak load balancing, distributed resource coordination, and improved integration of renewables.
Private-sector participation is explicitly supported, with incentives for innovation in both technology and commercial models. The government also encourages regional pilots that explore different VPP structures, ownership models, and operational mechanisms.