VPP／EV Aggregation Project in Japan

Yasuhiro SAKUMADeputy Director,

Advanced Energy Systems and Structure DivisionAgency for Natural Resources and EnergyMinistry of Economy, Trade and Industry,

Japan

Tokyo, 8 October 2019

0

2000

4000

6000

8000

10000

12000

55606570 1975 1980 1985 1990 1995 2000 2005 2010 2015 2017

新エネ等

石油等

ＬＮＧ

水力

石炭

原子力

(TWh)

(FY)

3.1%

8.7%

39.8%

32.3%

7.9%

8.1%

1952

100

294

485

738

940

1056

1150Renewables (excl. hydro)

Oil

LNG

Hydro

Coal

Nuclear

Source: Energy White Paper 2019 in Japan 1

Power generation and Power supply composition

1,200

1,000

800

600

400

200

Based on “Outline of electric power development (METI)” and “Outline of power supply plan (METI)”

Based on “Comprehensive energy statistics (METI)”

Japan’s Responsibility for Energy Transition

2

Mission/ Background

Measures;

3”Es” + Safety

Energy trilemma Energy security Environment (Sustainability) Economic affordability (Cost)

Energy Efficiency Renewable energy Nuclear energy CCS + Fossil fuels Hydrogen

Renewable electricity introduction

3

(FY)

(GW)

9.5%10.4% 10.0%

10.9%

12.5%

14.3% 14.6%

16.0%

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

70

80

90

100

2010 2011 2012 2013 2014 2015 2016 2017 ・・・ ・・・ 2030

Solar PV

Wind

Middle and small hydropower

Geothermal

Biomass

Renewable ratio (right axis)

2030Targets

22-24%

4

Expanding auction scheme for Solar PV, Wind and Biomass generation

Constructing better business environment for Offshore Wind

Reforming FIT scheme suitable for the characteristic of each power source

Enhancing conventional flexibility sources (Interconnection, Thermal Power, Pumped Storage…)

Exploring new flexibility sources (Demand Response, Electric Vehicle, Virtual Power Plant …)

Grid reinforcement based on cost-benefit considerations Maximum use of existing grid (“Connect and Manage”)

Highercost

Flexibilityneeds

Grid constraints

Future direction toward renewables as a main power source

Challenges Key measures

5

Procurement of DR by TSOsTSOs procured 961MW of DR as reserves of Generator

I’ (reserve power for severe peak period) for FY2018. DR accounts for 70% of contracted capacity, and its

contract price was 30% cheaper than that of power plants.

Source: EGC

Contracted capacity(10MW)

Average contract Price(¥/kW)

Power plants 36.1 5,210

Demand response 96.1 3,661

Total 132.2 4,085

DR accounts for 70% of contracted capacity.

Price of DR is 30% cheaper than that of power plant.

Procurement results

6

Dispatch of demand response TSOs dispatched roughly 500MW of DR for 8 times in

5 straight days in Tokyo area in Jan 2018. About 270MW of DR was dispatched twice in Kansai

area in July 2018, and about 340MW was dispatched 4 times in Tokyo area in August 2018

Source: Energy Pool Japan

DR dispatch in Tokyo area in Jan 2018

Wind farm

Thermal Power

Utility-scale solar PV

Shops

Stationary battery system

EV and EVPS Heat pump

Hydropower

Aggregators provide grid operators with energy services

Factories

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IoT technologies help aggregators to integrate and control electricity to heat pumps, batteries, EV, ENE-FARMs, and to control demand response and renewable energy in distribution area.

Advanced DR - Virtual Power Plant (VPP)

NuclearPower

Electricity System

MicroCHP

VPP

Image of VPP

8

VPP flattening demand load VPP can reduce use during peak generation (kWh)

(which is costly) and reduce the need for investment in peak operating capacity (kW) by reshaping the demand load flat.

Source: METI

Flattening duration curves

3.8GWｌｌ

7.5%of

Peak demand

電力供給設備量（イメージ）

×

0 8,760hHour

GW

Top 88 hours

50GW

Reduction of peak generating time (kWh value)

Reduce investment in peak capacity (kW value)

||1％ of annual hours

0 8,760hHour

GW

Top 88 hours

Peak generation

Middle generation

Base-load generation

50GW

Base-load generation

Middle generation

VPP can help solar PV to generate electricity by shifting demand to necessary times, similarly pumped hydro storage

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VPP helping PV generation

Demand

[GW]

Solar PV(6.8GW)

8

0

2

4

6

10

12

Nuclear, Hydro, Geothermal, Wind

0:00 12:00 18:00 24:006:00

Curtailment（1.9GW）

Thermal

PSHPSH

Source: Kyushu Electric Power

Supply and demand balance in Kyushu(3rd May 2019)

Major Aggregators in Trial VPPs ProjectAggregation Coordinators

Resource Aggregators

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Values produced by VPP aggregators Aggregators create new electricity services, leading

to smart energy systems.＜Services to TSOs＞1. To provide reserves and balancing power 2. To maintain the quality of electricity

＜Services to retail electric utilities＞1. To provide supply capacity2. To avoid imbalance

＜Services to renewable energy companies＞1. To avoid output suppression; DR is under consideration to

avoid output suppression of PV

＜ Services to electricity consumers＞1. To reduce electricity price, such as by peak shaving2. To maximize profits through reverse power flow using post

FIT PV

Product specification in balancing market

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Primary reserve

(GF)

Secondaryreserve1（LFC）

Secondaryreserve2

（EDC-H）

Tertiary reserve1（EDC-L）

Tertiary reserve2

Ref.Severe peak

reserve

Ref.Capacity

Mechanism

Open of Markets

2024 at latest By 2024 By 2024 2022 2021 2017-

2023 2024

Responsetime

Within 10 Sec.

Within 5Min.

Within 5 Min.

Within 15 Min.

Within45 Min. 3 hours 3 hours

Durationtime

5 Min.or more

30 Min. or more

30 Min. or more 3 hours 3 hours 3 hours 3 hours

Minimum Capacity 5MW 5MW 5MW 5MW 1MW 1MW 1MW

Market specification decides who can enter the balancing markets.

Requirements in balancing market,as of September 2019

Solar PV in a post FIT-world Closure of FIT for household PV starts in Nov. 2019. Residential PV will be purchased at 24 JPY/kWh, equal

to household prices for electricity. Self-consumption is a key driver for use of renewables.

（出典）費用負担調整機関への交付金申請情報、設備認定公表データをもとに作成。一部推定値を含む

【Price of solar PV (below 10kW)】【Number of residential solar PV, post FIT】

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Efficient self-consumption of PV with energy storage technologies

What can we do with surplus solar energy inhouseholds? It will be used to charge storage battery,EVs and PHVs, and heat pumps.

東京電力 HPより

• Charging batteries in the daytime, discharging when PV is not working

Storage battery

• EVs and PHVs are charged by surplus solar energy

• V２H（Vehicle to Home）paves the way to more flexible use

EVs and PHVs

• Surplus solar energy is used to store thermal energy, and heat is used at night

Heat pump

14

Peak cutSolar PV pro-sumers

6 am 6 pm 11 pmmidnight midday

kW Working time

Grid Stabilization

9 am 6 pm11 am 16 pm

Resilience back-up power at grid power outage

kW

Source: PJM

Home 3~ 8 kW Building 10 ~ 100 kW Grid 100kW~ aggregation

Charge/discharge to/from the grid

V2H V2B Smart Charging, V2G

V2X provides electricity to houses, buildings and grids. No major sites that can transfer electricity back to the grid exist in Japan

V2X

Source: Nissan 15

V2G

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アグリゲーターコンソーシアム２

(Source) METI VPP2018

Blue: dispatch orderRed: actual power

５ min.

EVdischargingEVcharging

Demonstration result of Ancirary service by V2G

V2G demonstration test results that EVs can provide anciraty services.

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システムプライス 九州エリアプライス

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Recent transaction prices in Kyushu area Renewables are installing rapidly in Kyushu, traded

by 0.01JPY/kWh in Feb 2019.

Source: JEPX

11:00～15:000.01JPY/kWh

［円/kWh]

System price Kyushu area price

System price and area price in Kyushu, as of 24 Feb. 2019

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Pilot project: Dynamic pricing for EV charging

The pilot program is intended to shift the peak electricity usage times by providing EV owners with “dynamic pricing”, peak and off-peak electricity rates that are coupled with wholesale electricity market price.

Charging station

Time

Price(Yen/kWh)

DisconnectPeak electricity usage times

Off-peak electricity usage

times

Charging station

Connect to charge EVs

EV is charged at low price

Avoid grid congestion

Figure. Overview of the Pilot project

⑩Community battery storage

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VPP creates the energy interactive society

①V2G; EV contributes

system stability

⑨CHP for district heating

⑦PV and biogas for CHP and electricity reserve

⑧P2G for Wind energy and PV for hydro storage

⑤PV and EV for electricity

interchange

⑪Storage Batter for balancing

④V2B: Work place charging

③FCV to home ⑥EV・FCV、Bus

FC

②P2H for PV and heat pump

FCFC

FC

Energy use is optimized by interchange of energy among electricity, heat, hydrogen and EV/FCV.

Renewables are expected to be mainstream energy.