Improving China’s power system flexibility is an urgent task in order to efficiently and cost effectively scale up renewable energy integration, secure an orderly coal phase-out, and construct a New Power System characterized by a high penetration of renewable energy. NRDC partnered with North China Electric Power University (NCEPU) on the report, “Improving Power System Flexibility: Technical Pathways, Economic Analysis, and Policy Recommendations.” The report analyzes the options for increasing power system flexibility through supply- and demand-side flexibility, system operation flexibilityand energy storage, and provides a roadmap for China’s power system flexibility improvement towards 2035.
Key Conclusions
1. Both directional and temporal characteristics should be considered in power system flexibility analyses, as well as improving the power system's short-, medium- and long-duration regulation cability from both supply side and demand side.
2. The comparison and selection of flexible resources should focus on technical characteristics (regulation capability) and economics (cost).
3. A portfolio approach that optimizes the different values of different flexible resources will increase the overall benefit to the power system.
4. Advanced planning and accelerating the deployment of other types of flexible resources beyond coal power retrofit are needed. A granular simulation analysis can help identify the system challenges and flexibility resource needs at different time scales.
5. By leveraging the complementary nature of an integrated portfolio consisting of supply-, grid- and demand-side flexibility resources and energy storage, a plan to increase the diversity of flexibility resources can effectively and economically improve the overall power system flexibility.
Proposed Roadmap for Increasing Power System Flexibility
1. "14th Five-Year Plan" period (2021-2025): Beyond the currently predominant technologies (coal power flexibility retrofit and new pumped hydro storage and other resources), emphasis should be placed on the deployment and application of demand-side resources.
2. "15th Five-Year Plan" period (2026-2030): As the penetration wind and solar power increases, a mix of resources that can both short-duration and long-duration flexibilitywill be needed. Energy storage and electric vehicles (V2G) will provide ancillary services and participate in flexibility regulation as auxillary resources
3. "16th Five-Year Plan" period (2031-2035): The demand for flexibility will cover multiple time scales requiring short-, medium- and long-duration resources. Electrochemical energy storage, pumped hydro energy storage, natural gas, coal power and demand-side resources will work together to provide system flexibility, with energy storage and demand-side resources being the main contributors.
Additionally, a mature and well interconnected power grid system, appropriate market mechanisms, and power planning are essential for fully unleashing power system flexibility. Besides developing flexibility resources, attention should be given to power grid construction, power market development, and the consideration of future flexibility needs at different time scales during the preliminary planning process.
Policy Recommendations
1. Clarify the development orientation of flexible resources and strengthen comprehensive planning, as well as enhance the regulation capability of a new power system through multi-dimensional coordination among supply, grid, demand and energy storage.
2. Improve the construction and utilization of flexible resources on the power supply side by closely linking the construction of power supply and flexibility development strategy.
3. Strengthen the construction and the intelligent ugrading of power grid infrastructure, and improve the grid-side capability to operate flexibly and optimize resource allocation.
4. Fully realize the value of demand side resource as a key means to addressing the high marginal cost of increasing power system flexibility.
5. Accelerate the innovation and advancement of new types of energy storage, in order to realize the large-scale dispatch of renewable energy under a new power system.
6. Improve power market mechanisms to release the potential of flexibility resources to a greater extent in different markets.
The report is only available in Chinese.
