China plans to expand its national virtual power plant (VPP) regulation capacity to more than 50 gigawatts (GW) by 2030, according to new guidelines issued by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA).
Source: People’s Daily
China plans to expand its national virtual power plant (VPP) regulation capacity to more than 50 gigawatts (GW) by 2030, according to new guidelines issued by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA).
The document, titled Guiding Opinions on Accelerating the Development of Virtual Power Plants, sets out a two-phase development plan. By 2027, China aims to establish a standardized framework for the construction, operation, and management of VPPs, along with a robust mechanism for market participation. By then, total regulation capacity is expected to exceed 20 GW. By 2030, that figure is projected to reach more than 50 GW.
An NEA official noted that the guidelines are intended to support the high-quality development of VPPs. In recent years, provinces such as Guangdong, Shandong, and Shanxi have made significant progress, with local governments and companies actively exploring VPP deployment. However, development nationwide remains in its early stages. A unified understanding of what defines a VPP and how it should function is still lacking, and the supporting regulatory framework, market mechanisms, and technical standards need further refinement.
To address these challenges, the guidelines clarify the definition and role of VPPs and outline key tasks, including promoting region-specific development, improving operational management, refining market participation rules, strengthening safety and reliability, and encouraging innovation in technology and standards.
Currently, most VPPs rely heavily on demand response to generate revenue, limiting their business models. The new guidelines call for broader innovation, encouraging VPPs to offer a wider range of services such as energy efficiency consulting, energy data analytics, custom energy solutions, and carbon-related services—helping them diversify their income streams.
On the market access front, VPPs that meet the necessary requirements will be allowed to operate as independent entities in medium- and long-term power markets, spot markets, and ancillary services markets. In the early stages, entry thresholds may be relaxed to accommodate local conditions, with adjustments made over time based on operational experience. In regions with suitable infrastructure, cross-provincial electricity trading by VPPs will also be encouraged.
The guidelines also encourage private companies and other social capital to invest in and help operate VPPs, leveraging their own strengths. According to the NEA, this move is part of broader efforts to support private-sector participation in the energy industry. Compared with traditional energy projects, VPPs typically require lower upfront investment, offer greater operational flexibility, and are more market-oriented—making them particularly well-suited for private capital. In cities like Shenzhen, private companies are already playing a leading role in building and managing VPPs.
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