VPP network powers up as nation eyes smarter grid

In 2025, new energy storage capacity broke the 100 GW milestone for the first time, more than doubling the total capacity of traditional pumped-storage hydropower. Crucially, these facilities absorbed over 30 billion kilowatt-hours of renewable electricity over the year, lifting the national renewable utilization rate by approximately 2 percentage points.

Xu Jilin, deputy director-general of the NEA's department of energy conservation and technology equipment, noted that during the 14th Five-Year Plan period (2021-25), the sector evolved rapidly from earlystage commercial application to large-scale deployment.

Alongside volumetric growth, the operational effectiveness of these systems has improved dramatically. The annual equivalent utilization hours for new energy storage nationwide jumped from 611 hours in 2023 to 911 hours in 2024, and reached 1,195 hours in 2025.

This enhanced infrastructure proved indispensable during recent summer electricity demand spikes driven by sustained economic growth and extreme heat.

For example, in July 2025, when national peak demand exceeded 1.5 billion kW, major industrial hubs like Jiangsu and Shandong provinces mobilized their centralized storage facilities. Peak discharge power reached 7.14 GW in Jiangsu and 8.04 GW in Shandong — equivalent to operating seven to eight massive 1,000-megawatt coal-fired units at full throttle — with a simultaneous dispatch rate exceeding 95 percent.

Looking ahead, industry stakeholders stress that achieving high-quality renewable energy integration is a systemic engineering feat that cuts across the power, thermal, industrial, transport, and construction sectors.

State Grid Corp of China has recently seen new energy output hit a record 600 million kW in its operating area, accounting for nearly half of total power output.

To manage this, State Grid has vowed to accelerate VPP construction and ensure that all new electricity demand is met by newly added clean energy, targeting a 30 percent renewable generation share in its operating area by 2030.

This is supported by ongoing mega-infrastructure upgrades, including the commissioning of the Shaanxi-Anhui ultra-high voltage direct current project, which brings the national total of operational UHV corridors to 46, boasting a cross-regional transmission capacity exceeding 340 GW.

Zhu Gongshan, chairman of GCL Group, China's largest private power enterprise, encapsulated the industry's trajectory, noting that energy storage, combined with auxiliary innovations like smart microgrids and vehicle-to-grid networks, is now the lifeline of grid stability.

"These technologies are indispensable for swiftly balancing power output against shifting demand," Zhu said.

"By offering dependable backup electricity and intelligent demand response, they are forging a highly resilient, adaptable and truly modern energy network for China's future."