The new version of the "Two Rules" has achieved all-round innovation in the two mechanisms

China Energy Storage Network News: ——Interview with Sun Dayan, Deputy Director of the State Grid Electric Power Dispatching and Control Center

At the end of 2021, the National Energy Administration issued the "Regulations on the Management of Power Grid Operation" (hereinafter referred to as the "Regulations") and the "Measures for the Management of Power Auxiliary Services" (hereinafter referred to as the "Measures"). Based on the draft for comments, the regulations revised and improved the key issues of concern to all parties, such as information disclosure, the positioning of new entities such as users and new energy storage, the principles of cross-provincial and cross-regional auxiliary services, and the sharing mechanism of user participation in auxiliary services.

Recently, the reporter interviewed Sun Dayan, deputy director of the State Grid Electric Power Dispatching and Control Center, on the release of the "Regulations" and "Measures". He said that the "Regulations" and "Measures" inherited the achievements of the power system reform since Document No. 9 of the Central Committee of the Communist Party of China (2015), and incorporated the latest practices in building a new power system. It is an all-round innovation of the power system operation and management mechanism and the power auxiliary service market mechanism.

China Electric Power News: What is the significance of the promulgation of the "Regulations" and "Measures" in the context of accelerating the construction of a new power system with new energy as the main body?

Sun Dayan: The "Regulations" and "Measures" inherit the achievements of the power system reform since Document No. 9 of the Central Committee of the Communist Party of China (2015), and incorporate the latest practices in building a new power system. They are all-round innovations in the power system operation and management mechanism and the power auxiliary service market mechanism based on the complete, accurate and comprehensive implementation of the new development concept.

The core feature of the new power system is the high proportion of new energy. The intermittent and volatile nature of new energy sources needs to adapt to the real-time balance characteristics of the power system, which creates an urgent need for various new types of regulating resources such as energy storage and adjustable loads. The addition of new regulating entities to the power system requires the construction of a complete operation and management mechanism from the perspective of system security, the formation of an effective incentive mechanism from the market, the clarification of the status of new market entities that mainly absorb renewable energy, and the acceleration of the formation of a new power installation development mechanism supported by energy storage and peak-shaving capabilities. The "Regulations" focus on the power system safety and operation management framework, and the "Measures" focus on the new market-oriented mechanism for ancillary services.

China Electric Power News: From the perspective of the organization and coordination of power system operation, what innovative measures have been proposed in the "Regulations" and "Measures"?

Sun Dayan: The innovation of the "Regulations" and "Measures" is mainly reflected in three aspects.

The first aspect is to expand the grid-connected entities.

First, the increase in the number of self-owned power plants on the power generation side. The increase in self-owned power plants on the power generation side aims to utilize the long-term idleness of its peak-shaving resources, which will greatly increase the grid regulation capacity in provinces with a high proportion of self-owned power plants, such as Shandong, Xinjiang, Gansu, and Ningxia. Up to now, the scale of self-owned power plants in my country exceeds 150 million kilowatts. Due to the policy of self-generation and self-use and surplus grid access, the peak-valley regulation capacity of self-owned power plants has not been fully utilized. In recent years, the Northwest Power Grid has used self-owned power plants to carry out "virtual energy storage", which is to encourage self-owned power plants to generate more at peak times and less at valleys while maintaining the self-generation and self-use of "electricity", and obtain auxiliary service income from the regulation of power generation curves, which has a positive effect on the consumption of new energy. The "Regulations" and "Measures" have increased the number of self-owned power plants, which is also based on the same considerations.

Second, the load-side entities have been increased. The load-side entities include aggregators, adjustable loads, and virtual power plants. The downward adjustment capability of the load-side entities can play a role in peak reduction, thereby achieving the purpose of reducing the newly added controllable installed capacity such as coal-fired power, while saving the construction of the supporting power grid. The upward adjustment of the load can improve the level of new energy consumption. In recent years, the peak-to-valley difference in my country's electricity consumption has continued to widen. The peak load duration of more than 95% of the maximum load is only about 96 hours, accounting for 1% of the whole year. Reducing electricity consumption during peak hours through load-side regulation will greatly improve the overall operating efficiency of the power system and improve the operating results of enterprises. Correspondingly, during the noon photovoltaic power generation period, coal-fired power units need to deeply adjust the peak, shut down, and even take measures to abandon wind and solar power to maintain real-time power balance. The increase in energy consumption by the load-side entities during the noon period will reduce the peak-shaving pressure of coal-fired power, save the cost of starting and stopping and deep peak-shaving, and avoid wind and solar power abandonment. It is crucial for the new power system to establish a load regulation benefit mechanism around the above scenarios.

Third, the energy storage entities have been increased. The power structure dominated by new energy must be equipped with a certain proportion of energy storage capacity. Solving the energy storage business model is the key to opening up energy storage to the power system. The energy storage entities specified in the Measures cover the current mainstream energy storage technologies, which is a great policy benefit to the development of the energy storage industry.

Fourth, it opens up space for the development of distributed energy. The "Regulations" and "Measures" also retain policy access for grid-connected entities within the jurisdiction of power dispatching agencies below the provincial level, preparing for the rapid development of distributed energy in the future. On September 14, 2021, the National Energy Administration issued the "Notice on the Announcement of the Pilot List of Rooftop Distributed Photovoltaic Development in the Whole County (City, District)", involving 676 counties, with an estimated construction scale of more than 1.2 billion kilowatts. The problems of reverse overload and voltage adjustment caused by distributed power sources have initially emerged, and strengthening the management of distributed power sources is an important issue for new power systems.

Fifth, the principled regulation of the inter-provincial auxiliary service mechanism was carried out. It clarified the auxiliary service sharing compensation and settlement principles for the power generation units that provide auxiliary power services for inter-provincial and inter-regional power transmission and the power generation units that provide power auxiliary services to ensure the stable operation of inter-provincial channels.

The second aspect is to improve the power grid operation and management mechanism.

First, it inherits the responsibilities of the power dispatching organization given by the Grid Dispatching Management Regulations. The Regulations and Measures clearly state that the power dispatching organization is responsible for the organization, command, guidance and coordination of the operation of the power system. All grid-connected entities should strictly abide by relevant national laws, regulations, standards, power dispatching management procedures, and electrical equipment operation procedures, and jointly maintain the safe and stable operation of the power system. Since the grid-connected entities have added load side and energy storage entities, this is the due meaning of ensuring the safe operation of the new power system, and it also greatly increases the dispatching and operation management tasks. Second, it improves the technical management framework. The Regulations and Measures follow the effective technical management mechanism, that is, the power dispatching organization should carry out technical guidance and management work for the grid-connected entities in accordance with the requirements and relevant regulations of the National Energy Administration and its dispatched agencies, and increase the technical management content of the load side and energy storage entities. Third, it deepens the supervision and management mechanism. The National Energy Administration and its dispatched agencies are responsible for the supervision and management of power grid-connected operation and power auxiliary services, and have added a written report system for power dispatching and operation management on the basis of the grid-connected dispatching agreement and the power purchase and sale contract filing system.

The third aspect is to build a bilateral sharing architecture between power generation and users.

The Regulations and Measures propose to gradually establish a mechanism for sharing power auxiliary services with the participation of power users. This is an iterative upgrade of the original zero-sum compensation mechanism on the power generation side, and a new business model for the load side and energy storage entities to provide services and obtain compensation income.