(Yicai Global) Nov. 29 -- Market players in China’s emerging energy sector, such as energy storage firms and virtual power plants, will soon be allowed to participate in electricity spot trading in order to provide them with another source of revenue, industry insiders told Yicai Global.

Electricity spot trading can serve as a market-based compensation mechanism for energy storage companies, distributed power generators, load aggregators, virtual power plants and new energy micro-grids, according to a draft policy issued by the National Energy Administration recently.

By allowing emerging market players to participate in electricity spot trading, their profit margins will rise, said Wang Yongli, deputy director of the Energy Internet Research Center at North China Electric Power University. It means that those companies that provide the grids with stable or flexible power supply will benefit from a supplementary source of income.

It is difficult for battery storage power stations to profit because of the huge investment involved, Wang Yongli said. But if they take part in spot trading, they can make money from the difference in the peak and trough power prices or increase the yield of their own energy storage projects through market-based pricing, he added.

China’s first virtual power plant Jibei Virtual Power Plant has been providing market-based peak-load regulation services on a trial basis to the grids in Beijing, Tianjin and Tangshan in northern China since 2019 and has made a lot of money, said Wang Xuanyuan, head of the scientific and technological innovation department at State Grid Jibei Electric Power.

“The pilot peak-load regulation services have significantly boosted earnings, and I believe virtual power plants’ source of income will become more diversified as they participate in electricity spot trading and as more favorable policies are issued,” Wang Xuanyuan said.

Editors: Tang Shihua, Kim Taylor