VPP/DR Technology

Chiyoda’s VPP/DR Technology

Value of Chiyoda’s VPP/DR Technology

Industrial facilities such as load facilities (power operated facilities), energy storage systems and power generation facilities have the potential to contribute to the supply and demand balance in the power grid system. Chiyoda maximizes their potential and realizes economic value through market trading, returning the benefits to the business operator. Our VPP/DR technology enables business operator’s load equipment, energy storage systems and power generation facilities to play roles traditionally fulfilled by large-scale power plants.

Overview of Chiyoda’s VPP/DR Technology

As detailed below, the three main components of VPP/DR technology are: 1) Forecasts (three functions), 2) Resource Operation Support and 3) Market Trading Strategy Optimization. Combining components maximizes the potential value of distributed energy resources.

1.Forecasts

  • Demand Forecast Function
    This function forecasts future demand based on the operating status and operational plans of load facilities at the metering points. The contribution to balancing power supply and demand is evaluated based on the difference between the expected power usage (baseline) and actual demand. Accurate demand forecast enables the evaluation of contribution with no over or under estimation.
  • Generation Forecast Function
    To balance supply and demand, power plants, as suppliers, are typically required to submit generation plans. While it is relatively simple for stable power sources, such as thermal power plants, to follow the plan, it is challenging for variable power sources, such as solar and wind power. In cases where there is a discrepancy between the generation plan and actual generation, imbalance charges may apply. However, by utilizing accurate generation forecasts based on weather forecasts, it is possible to refine the generation plan and minimize imbalance charges.
  • Market Price Forecast Function
    Electricity market prices (wholesale electricity market and balancing market) correlate with daily area-specific demand forecasts, weather conditions and fuel prices, and inputting such data facilitates accurate market price forecasting. By trading power and flexibility of distributed energy resources during periods when market prices are expected to be high, it is possible to maximize the economic benefit returned to business operators.

2.Resource Operation Support

In the balancing and capacity markets, there are requirements for the operation of resources, such as response times and durations. This component provides support or automatic control to ensure that resources operate according to these requirements, In particular, the need for automatic control is expected to increase further in the future due to societal challenges such as the retirement of skilled operators and the transfer of expertise, as well as the need to address stringent response requirements in the electricity markets. Based on the extensive knowledge and experience accumulated over years in plant engineering, we are committed to achieving plant control engineering and implementation that enable operational streamlining and compliance with market requirements while ensuring no compromise on product quality or safety.

3.Market Trading Strategy Optimization

Based on market price forecasts, resource characteristics and operational constraints, this component proposes the optimal market selection and trading strategies for power and flexibility, determines the most economically beneficial times and markets for trading distributed energy resources, and suggests partial automation of complex daily operations.

Technical Composition of Chiyoda’s VPP/DR Solutions

Technical Composition of Chiyoda’s VPP/DR Solutions

Collaboration with Innovative Companies

Chiyoda has signed a Memorandum of Understanding (MOU) with GridBeyond, a leading provider in the VPP/DR industry, to expand business in Japan. GridBeyond has a strong track record with hundreds of resources, primarily serving business operators in advanced power markets such as Ireland, the UK, CAISO, ERCOT, PJM and Australia. Combining GridBeyond’s know-how with Chiyoda’s expertise in industrial processes, production facilities, energy storage systems and co-generation facilities maximizes the potential value of distributed energy resources without impacting business operator operations.
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Cooperation with Other Businesses

The knowledge and technical elements related to forecasts and resource operation support in VPP/DR are closely related to Low Carbon Solitions businesses and hydrogen-related businesses. Specifically, in the production of hydrogen and hydrocarbons (Power to X) from renewable energy sources, proposing operational methods linked to generation power and market prices contributes to value-added enhancements.

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