Prospects for the Construction and Development of New Power Systems

The second meeting of the Central Committee for Deepening Overall Reform held on the afternoon of July 11 reviewed and approved documents including the "Guiding Opinions on Deepening the Reform of the Power System and Accelerating the Construction of a New Type of Power System."

The meeting pointed out that it is necessary to deepen the reform of the power system and accelerate the construction of a new type of power system that is clean, low-carbon, safe, sufficient, economical, efficient, supply-demand coordinated, flexible, and intelligent, to better promote the revolution in energy production and consumption and ensure national energy security. The meeting emphasized the need to scientifically and reasonably design the construction path of the new power system, gradually reducing the proportion of traditional energy in a planned and stepwise manner based on the safe and reliable replacement by new energy. It is necessary to improve the system and mechanism adapted to the new power system, promote innovation in power technology, market mechanisms, and business models. Efforts should be made to better combine an effective market with a proactive government, continuously improve the policy system, and ensure the provision of basic public power services. This article intends to discuss and prospect the construction and development of the new power system.

Scientifically and reasonably design the construction path of the new power system.

In the process of energy clean and low-carbon transformation, the large-scale integration of new energy sources such as wind power and photovoltaic power generation brings significant challenges to the operation and control of the power system. The randomness, intermittency, and volatility of new energy make the power balance problem in power system planning and operation probabilistic, which to some extent reduces power supply reliability. Moreover, the traditional power system's single "source follows load" mode (adjusting generation power according to load changes) will transform into a friendly interactive mode of "source-load interaction."

After disturbances, the stability characteristics of the power system evolve from being dominated by the traditional electromechanical mode to a multi-mode coupling interaction of electromechanical and electromagnetic modes, attracting widespread attention to system stability analysis and control issues. The power source side features low inertia and low short-circuit ratio, continuously weakening safety and stability support capabilities; the load side dynamic characteristics are increasingly complex; and the grid side coupling between AC and DC, and among multiple DC lines, is becoming closer.

In recent years, several large-scale blackout incidents caused by grid equipment failures abroad have sparked heated discussions. On September 28, 2016, South Australia's power grid experienced a statewide blackout lasting 50 hours. On August 9, 2019, a large-scale blackout in the UK affected about one million people. From February 15 to 19, 2021, Texas, USA, experienced a major blackout affecting up to 4.5 million people; the Texas grid entered a level three emergency state, with a maximum load shedding of 20 million kW and real-time market prices exceeding $9,000 per (MW·h).

It can be seen that to ensure safe and reliable power supply, traditional energy still needs to play a supporting and regulating role for a considerable period. Energy transition cannot be achieved overnight and must gradually reduce the proportion of traditional energy in a planned and stepwise manner.

Improve the system and mechanism adapted to the new power system.

Under the "dual carbon" goals, with the integration of a high proportion of intermittent renewable energy, it is necessary to improve the system and mechanism adapted to the new power system. In the traditional wholesale electricity market design based on real-time electricity price theory, the near-zero marginal cost characteristics of photovoltaic and wind power reduce market clearing prices, even causing negative prices, crowding out traditional thermal and nuclear power in marginal cost-based bidding transactions. As a result, thermal and nuclear power struggle to survive, leading to an unbalanced power source structure and reducing the safety and flexibility of the power system. Meanwhile, the randomness, intermittency, and volatility of photovoltaic and wind power bring significant challenges to power system operation and control, sharply increasing the demand for system flexibility and requiring sufficient economic incentives for flexibility resources.

Under the "dual carbon" goals, designing new market mechanisms that correctly reflect the value of different quality electric energy is crucial. In the new power system, as the foundation of the "source-load interaction" operation mode, new technologies and business models such as flexible loads and virtual power plants have received widespread attention.

Flexible loads include adjustable or shiftable loads with demand resilience, electric vehicles with bidirectional regulation capabilities, energy storage, thermal storage, distributed power sources, microgrids, etc. Their electricity consumption behavior can flexibly respond to price signals and is an important source of power system flexibility. In large cities where power supply cannot meet growing demand, the peak shaving and valley filling role of flexible loads can also play a key role in ensuring the safe operation of the grid. With the advancement of power market reforms, conditions for flexible loads and virtual power plants to participate in the electricity spot market and ancillary services market are gradually being met, and business models are gradually forming.

Promote better integration of an effective market with a proactive government.

The economy and safety of the power system are two sides of the same coin, with economy built on the foundation of safety. Without safety, the economy of the power system cannot be discussed. For a long time, China's power system has adhered to safety first but has not paid enough attention to economy. The grid operation retains a high safety margin, and there is overinvestment for safety. Power market reform reflects the high importance the CPC Central Committee and the State Council place on the efficiency and economy of the power system, opening a new chapter for the development of China's power industry and bringing unprecedented opportunities.

In power market design, operation, and regulation, the safety of the power system must always be considered as a premise. In non-commercial segments of the power market, the role of planning methods (including government intervention and grid planning management) should be fully valued, allowing the "visible hand" of planning and the "invisible hand" of the market to cooperate, complement each other’s strengths, and fully leverage the advantages of China's public ownership-based power industry and socialist market economy system.

Specifically, in scenarios dominated by safety, natural monopolies, and public service segments, planning management is suitable; in scenarios dominated by economy (efficiency priority), market regulation is appropriate; some segments fall between the two and should be decided case by case. Effective markets and proactive governments should clearly define their reasonable boundaries. Only by having the government manage public services well and ensure grid safety can market transactions be freer and smoother, playing a truly decisive role in resource allocation.

Build a layered and clustered new power system.

The production, transmission, and consumption of electricity and energy often require various types of networks, such as power grids, heating networks, and gas networks. Since these networks essentially transmit energy in different forms, they are collectively called energy networks. Energy networks include subnetworks of different energy types (power grids, heating networks, gas networks, etc.), which are connected through energy conversion devices (such as generators, pumps, air conditioners, and water heaters).

With the rapid development of information communication technology (ICT), on the basis of physical energy networks, information networks based on traditional automation, internet technology, and emerging technologies such as cloud computing, big data, IoT, artificial intelligence, and blockchain can be established to regulate energy production, storage, transportation, and utilization equipment. The actual operation, trading, and value transfer of electricity and energy commodities form a value network. The value network is the basis of the electricity and energy price system and is constrained by the physical laws of the energy network. Therefore, the new energy system and new power system will present a three-layer network architecture of "energy–information–value," which are tightly coupled and interrelated.

In the new type of power system, renewable clean energy sources such as wind and solar will be ubiquitous, meaning power sources will be distributed throughout the entire power system, leading to significant changes in the structure of the power system. Academician Yu Yixin from Tianjin University and others proposed a hierarchical clustered grid architecture, which means "decomposing the system into a hierarchical structure of clusters with global coordination" and "each cluster maintains its own net power balance and local self-optimization." For clarity, this paper refers to power systems with such structural characteristics as "hierarchical clustered new power systems" and further explores their operation and control issues.

The hierarchical clustered new power system also presents a three-layer network architecture of "energy-information-value" and is closely connected with other energy systems. The planning and operation issues of the hierarchical clustered new power system can be divided into three levels: physical mechanisms (the "energy network" level), operation control (the "information network" level), and market transactions (the "value network" level). This is a typical multidisciplinary and cross-industry problem that requires joint efforts from multiple disciplines and industries to solve.

In traditional power systems, large-capacity generating units are often built in areas rich in primary energy resources and transmit power to load centers through ultra/high-voltage long-distance transmission technology. The transition from traditional grids to future new power systems, according to the national "dual carbon" goals and energy security requirements, must involve the gradual phase-out of traditional energy based on the safe and reliable replacement by new energy. With the gradual increase in the penetration of low-carbon and zero-carbon energy and loads, the power system transformation will be a process of establishing new systems before dismantling the old.

During the power system transformation, power enterprises and other market entities will gradually increase the utilization of distributed power sources in the power system, especially on the user side and distribution network, developing distributed smart grids. This means the form and function of the distribution network will undergo significant changes, particularly with the large-scale integration of distributed power sources, electric vehicles, energy storage, and flexible loads.

Taking photovoltaic power generation as an example, China's total installed photovoltaic capacity has shown a rapid annual increase. Since 2016, both new and cumulative installed capacities have ranked first globally. To ensure stable power supply for photovoltaic ecosystems and agrivoltaic systems developed in vast deserts, wastelands, abandoned industrial and mining sites, and rural areas, their flexibility and convenience should be improved, significantly reducing the impact on the planning and operation of existing power generation and transmission and distribution equipment.