[Virtual Power Plant Era] Annual Growth of 20%... Essential for Carbon Neutrality

Supplementing Renewable Energy Supply Stability
Balancing Demand and Supply with ICT Technology
Necessary for Blackout Prevention and Efficient Operation

With the carbon neutrality policy, the amount of renewable energy generation such as solar and wind power is increasing. There are about 150,000 solar power plants in South Korea alone. While an increase in renewable energy generation can be seen as environmentally friendly, there is a growing concern that comes along with it. That is the task of balancing the supply and demand of electricity.

Jeju Island, which declared in 2012 that it would become a "carbon emission-free island," can be cited as an example. Due to overproduction of electricity, wind turbines are often stopped abruptly. Renewable energy is a clean energy resource provided by nature, but at the same time, it is an unstable resource that fluctuates depending on the weather. As the share of renewable energy increases, carbon emissions decrease, but there are concerns about blackouts caused by power overloads.

Virtual Power Plants, Essential in the Carbon Neutral Era

The solution that has emerged for the unstable power supply and demand issue is the "Virtual Power Plant (VPP)." A virtual power plant refers to connecting and managing distributed power sources responsible for electricity supply and demand, including renewable energy power plants, energy storage systems (ESS), and smart buildings, through ICT technology.

Virtual power plants are rapidly growing in line with the transition to renewable energy for carbon neutrality. The virtual power plant market, valued at about $1.1 billion in 2022, is expected to reach approximately $3.8 billion by 2029, showing an annual growth rate of over 20%.

The International Energy Agency (IEA) recommends the introduction of power generation forecasting systems in countries where the share of renewable energy exceeds 3%, drawing significant global attention to the virtual power plant market. Since the South Korean government has announced plans to increase the share of renewable energy generation to 25.8% by 2034, the virtual power plant market is expected to grow for stable power grid operation.

"Expansion of Public Data and ICT Connectivity Needed"

Energy IT social venture ‘SixtyHertz’ is one of the domestic companies related to virtual power plants. It possesses AI-based technology to predict renewable energy generation. At the end of last year, through a project by the Ministry of Science and ICT, it developed a system that analyzes large amounts of weather data such as cloud movement in real time to predict renewable energy generation. It has provided VPP services to Korea Midland Power, SK Telecom, and supported RE100 implementation at Kakao’s Jeju and Pangyo offices.

Virtual Big Data Processing System Architecture of Energy IT Company Sixteehertz [Image provided by Sixteehertz]

A representative from SixtyHertz said, "It would be great if more data related to renewable energy power plants and weather data were released as public data," adding, "If there is more public data, more climate tech companies will emerge in the future, creating a virtuous cycle of market development."

MerloLab, established in 2012, contributes to the spread of smart buildings by embedding semiconductor chips in lighting devices. Smart buildings connected through MerloLab’s wireless communication technology can adjust electricity usage in real time according to power conditions, functioning as another virtual power plant.

Shin Sobong, CEO of MerloLab, said, "Virtual power generation is necessary to integrate various energy resources with ICT technology to enhance stability and predictability." He emphasized, "Climate and environment, which can be called the fuel for renewable energy generation, differ by country. For sustainable renewable energy generation, policies that promote ‘internet-connected’ renewable energy like virtual power generation are needed."

This content was produced with the assistance of AI translation services.