Reinforcing Taiwan's Grid Resilience with Virtual Power Plants (VPPs)

The recent earthquakes in Taiwan have once again brought attention to the resilience and security of Taiwan’s power grid. The event proved that Virtual Power Plants (VPPs) are an essential tool to help avoid blackouts when the grid is under strain.

What is a Virtual Power Plant? A VPP connects and aggregates flexible energy resources from within the community. Flexible energy resources can include onsite backup generators, battery storage systems, and flexible demand (known as Demand Response). The combined energy flexibility of participants in a VPP is offered to grid operators to help keep the lights on by providing a large, coordinated reduction in grid demand in critical grid periods. VPPs provide an equivalent benefit to a power generator coming online, and can provide this service very quickly.

Taiwan’s grid faces challenges due to its limited space and dense population, making traditional power plant construction difficult. The heavy reliance on imported energy also exposes Taiwan to international energy supply fluctuations. Taiwan operates an independent grid system, which means that any generator trip or system failure could lead to power shortages and restrictions.

Taiwan’s grid faced emergency low frequency events on both 3 and 15 April 2024 due to seismic activity and generator trips respectively. When there is a drop in the grid’s frequency, it must be balanced swiftly to stop the risk of other generators tripping and a cascading failure of other generators. If the grid’s frequency had not been balanced quickly, Taiwan could have experienced large-scale blackouts. 

On the day of the earthquake, Taipower issued a dispatch notice at 4:30pm, calling for reserve power to help stabilise the grid. Enel X’s VPP immediately mobilized and aggregated the energy load of over 50 commercial and industrial users within 30 minutes, providing nearly 30 MW of Demand Response in Taipower’s Supplemental Reserves program. Enel X’s VPP customers, from a broad range of sectors including textiles, chemical processing, hospitals, metal processing, food and agriculture, machinery, and hotels, activated their flexible energy resources to help maintain grid frequency and stability over two hours.  

30 MW is approximately equivalent to the installed capacity of the Liwu Hydropower Plant¹ in eastern Taiwan, and similar to the energy demand of a large factory.

VPP participants financially benefit from both being on standby to respond and from reducing electricity use when called on by Enel X’s VPP. Customers earn a new revenue stream which can offset rising energy costs by approximately 10% or reinvest the earnings into new sustainability initiatives.

Less than two weeks later, on April 15, a generator trip caused another low frequency event. Gogoro, one of Enel X’s VPP customers, provided a fast and effective response when frequency deviations were detected. Nearly 1,000 Gogoro GoStations across Taiwan temporarily suspended charging within 5 seconds via Enel X’s VPP, which provided 11MW of critical support to help maintain grid stability.

The power reduced was equivalent to that used by tens of thousands of households, helping balance supply and demand on the grid. 

Horace Luke, founder and CEO of Gogoro stated: “Enel X is an important partner and together we are providing a near instant alternative energy source in Taiwan that was proven successful on April 3 and April 15th when the Taiwan power grid needed to be stabilized. Utilizing 2,500 Gogoro battery swapping stations at 1,000 locations, Gogoro’s distributed battery swapping network can integrate and perform as a key part of Enel X’s Taiwan VPP without disrupting battery swapping services to our riders. Leveraging energy in new and powerful ways is essential for Taiwan and other countries looking to transform their energy infrastructure and transportation systems.”

An additional ~20MW of ‘Spinning Reserves’ were provided by Enel X VPP participants for one hour during the generator trip, within ten minutes notice from Taipower. Participants came from a range of sectors including electronics manufacturing, semiconductor processes, commercial buildings, food processing, food production, hotels, hospitals, and cold storage facilities proving the value of aggregating and orchestrating energy consumption through a VPP.

It’s clear that energy users, including those with many small, distributed energy loads, can play a big role when their demand flexibility is offered to the grid via a VPP.

Daniele Andreoli, Head of Enel X Asia Pacific, stated: “By temporarily reducing power usage, businesses are playing an active role in alleviating grid pressure during critical moments. We are proud that our VPP was able to deliver what the grid needed, and we are thankful to all our customers for their efforts which made a great impact. More VPP resources are needed in Taiwan, and around the world, to support the renewable energy transition. VPP resources are the quickest, most sustainable and most affordable way to firm renewable power.”

While renewable energy development continues, Taiwan’s grid needs more flexible energy users to join VPPs to address the intermittency and variability of renewable energy supply.

During the Virtual Power Plant Development Trends and Application Symposium in May, President of the Industrial Technology Research Institute, Dr. Liu Wen-Hsiung, acknowledged the contribution of VPPs to enhancing grid resilience and ensuring stable power supply. He emphasized that VPPs are a critical technology that Taiwan must further develop.

Enel X currently has the largest demand response ancillary service aggregation volume in Taiwan. Contact us to learn more about how your business can generate a new revenue stream and support the energy transition by joining the Enel X VPP today. 

^{1. Qualified traders in the Energy Trading Platform, Taiwan Power Company: https://etp.taipower.com.tw/web/qse_info/qse_list}

^{2. Source: Taiwan Power Company’s unit power generation volume https://bit.ly/4e0Qas1}