TAEDT｜Series 001-Virtual Power Plants: Comparison of Market-Driven and Government-Led Mechanisms

Table of Contents

Preface ........................................................................ 1

Author’s Preface ......................................................13

Summary ....................................................................14

Abstract .......................................................................16

Chapter 1. Virtual Power Plants as the Foundation of the Modern Grid .......... 19

1.1 Defining the VPP: From Aggregated Distributed Energy to Controllable Grid Assets .............................................................. 19

1.2 The Value Proposition of VPPs: Enhancing Flexibility, Stability, and Market Efficiency .......................................................... 20

Chapter 2. Comparative Analysis of VPP Operating Environments ................. 22

2.1 Market Structures and Business Roles: Independent Participants vs. Utility Contractors ......................................................... 24

2.2 Market Efficiency and Price Elasticity: The Power of Volatility .............. 25

2.3 Renewable Energy Integration: Active vs. Passive Approaches .................. 27

2.4 Participant Profiles: Diverse Ecosystems vs. Regulated Clubs .................... 27

2.5 Policy and Regulatory Frameworks: Enabling Competition vs. Controlled Procurement ....................................................... 28

Chapter 3. In-Depth Analysis of VPP Operations: Case Studies ...................... 30

3.1 Germany's "Energiewende" and Its Mature VPP Ecosystem ...................... 30

3.2 Market-Driven Innovation in the U.S.: The California ISO Experience ...... 31

3.3 Japan's Phased Liberalization and Strategic VPP Development ................ 33

3.4 Taiwan's Emerging Market: The Taipower Platform and Its Limitations .... 34

Chapter 4. Comprehensive Analysis of Strengths and Weaknesses ................. 37

4.1 Advantages of the Market-Oriented Model ................................................ 37

4.2 Disadvantages of the Market-Oriented Model ........................................... 38

4.3 Advantages of the Government-Led Model (Taiwan) ................................. 38

4.4 Disadvantages of the Government-Led Model (Taiwan) ............................ 39

Chapter 5. Strategic Outlook and Recommendations for Taiwan .................... 41

5.1 Building on Taiwan's Unique Industrial Strengths ..................................... 41

5.2 Key Insights from International VPP Market Designs ................................. 41

5.3 A Roadmap for Unlocking Taiwan';s VPP Potential .................................... 42

5.4 Overcoming Barriers: Addressing Regulatory, Technical, and Market Challenges .................................................... 45

Chapter 6. Conclusion .............................................................. 47

References .................................................................... 49

Epilogue: Looking Ahead at the Crossroads of Taiwan's Energy Transition ...... 62