Hitachi Energy provides digital solution to support the settlement service of Zhejiang Energy Group’s virtual power plant

Hitachi Energy will provide a digital solution and advisory services for the smart settlement business of the virtual power plant (VPP) operated by Zhejiang Energy Group, a leading provincial energy provider in Southeast China’s Zhejiang Province. This solution leverages digital methods to offer efficient and flexible settlement management and strategy application services, orderly integrating the VPP platform into regular power system operations and paving the way for full participation in Zhejiang’s electricity market transactions.

With the rapid development of policies and the electricity market, VPPs, an innovative energy management model based on digital technology and intelligent energy management systems, are gradually emerging as a key solution to building a new power system. Zhejiang Province has introduced a series of policy measures to support the industry. In 2024, it launched a new pilot plan¹, promoting VPP participation in ancillary service markets through policy and market-driven approaches.

In 2024, Hitachi Energy’s consultants helped Zhejiang Energy Group in building their first VPP project by integrating various resources to provide auxiliary services to the grid, enhancing grid regulation, and improving supply-demand balance. Guided by Zhejiang Energy Group’s planning, Hitachi Energy will provide customized algorithm development services and advice for the platform’s trading and settlement module, along with supporting hardware equipment.

This upgrade will enable virtual power plants to accurately calculate settlement fees and reasonably validate settlement assessments from higher-level market operators. It ensures efficient resource utilization and fair distribution of participant benefits while meeting market rules and regulatory requirements, thereby supporting high-standard participation in VPP ancillary services and electricity market transactions.

As a major province for industry and manufacturing, Zhejiang ranks among the top four regions in the country in terms of electricity consumption. In 2024, the total electricity consumption in Zhejiang exceeded 678 billion kilowatt-hours (kWh), making a year-over-year increase of nearly 9.5 percent.². As summer begins, the high temperatures in southern regions typically pose greater challenges for local power supplies. As an “intangible” energy hub, the VPP platform can provide various auxiliary services, such as peak load regulation, frequency response, and backup generation through intelligent power supply, grid, load, and energy storage interaction.

The VPP platform has connected over 200 user-side resources in the province, aggregating multiple energy resources, including energy storage and adjustable loads. Relying on digital coordinated control technology, it provides real-time responses and optimizations to dispatch commands, aiding in managing the tension on electricity supply and demand while ensuring the stable operation of the power grid. Additionally, the VPP acts as a stabilizer, mitigating the intermittency in new energy generation and enhancing the efficiency of renewable energy utilization in Zhejiang.