Gyeonggi Provincial virtual power plant in Gyeonggi Open Platform for Smart city

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Gyeonggi Provincial virtual power plant in Gyeonggi Open Platform for Smart city
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Team Members Gyeonggi Research Institute (GRI); Gyeonggido Business & Science Accelerator (GBSA); Electronics and Telecommunications Research Institute; H Energy co., Ltd.; I&C technology co., Ltd.; KMAC; Korea Energy Agency (KEA); Korea Institute of Building Energy Technology(KBeT); LG CNS co., Ltd.; LG Electronics Inc.; National Information Society Agency ; NKIA Inc.; Smart City Korea, Inc.; Suwon Research Institute
Point of Contact Ilhan Ham
Participating Municipalities Gyeonggi Province, Suwon City, Ansan City, South Korea
Status
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Description

This is a project concept which is to create citizen-led, decentralized, local energy-based society that builds foundations on which the distributed resources (ESS, solar power) in the region that can proliferate profitable models which citizens invest, own, trade and operate.

  1. This is to create an urban energy storage based on the optimal ESS (energy storage) introduction feasibility analysis in accordance with Energy usage analysis (big data).
  2. This project intends to revitalize the energy production distribution resources through citizen-led photovoltaic power generation by developing photovoltaic energy on rooftop of the buildings along with development of photovoltaic energy in rural areas.
  3. It intends to create power trading ecosystem that utilize distributed resources such as energy management efficiency by utilizing energy use analysis and citizen-led photovoltaic prosumer.

Challenges

  • (Alienation of citizens, residents) The energy conversion is focused on large scale development projects led by the large sized corporations and mega sized financial institutions, and residents' acceptance of energy conversion falls due to spot development, random licensing and residential confrontation.
  • Other than large-scale power plants, small-scale resource distribution-based business models could not grow, and therefore, local energy market in which citizens may participate cannot be created.
  • Energy industrial revolution resulting fast growth of resource distribution, and energy markets are also is unable to lead to creation of items and employments to the citizens. The outflow of energy capital towards overseas is serious.
  • Surplus power trade between urban and rural areas are impossible, and despite there are ample free spaces in the site including roof of the buildings, there are problems regarding fall in the space usage efficiency.

Solutions

It is recommended to solve the matter by establishing local energy cooperatives led by the residents, develop citizen’s virtual power generation projects that combine solar photovoltaic prosumer and ESS sharing projects, and to create and foster a fair local energy market in which residents and communities could share the profits.

  • Ph 1) Development of ESS sharing/operation project (Downtown power reservoir)
  • Ph 2) Photovoltaic Prosumer Project (Downtown rooftop power generation)
  • Citizens’ virtual power plant (Power Brokerage service)

The energy cooperative, which is consisted of local investors, carries out the project through contributions from members and Cloud Citizen Funding are applied by FinTech. 5% of the co-op’s profits are funded as citizen’s energy welfare funds and is used to support those who are considered as alienated from the energy.

Major Requirements

  • Creation of local energy co-operative

First of all, there is a need to create a co-op in a form of Gyeonggi Energy Cooperative that is composed of citizens, traders, and organizations that leads energy conversions such as energy-independent towns in the region. (Establishment as a corporation is proceeded separately)

  • Demand survey on the distributed resources

By utilizing artificial intelligence platform subjected on public institutes and multi consumers within the region, 1) analyze feasibility, 2) Provides virtual experience, and secures ESS and prosumer sites.

  • Establishment of the project planning and funding procurements

Subjected to the sites for distributed resources, establishes the project plans including 1) ESS sharing projects, 2) photovoltaic prosumer projects, 3) the other projects of investments, costs and sales of virtual power plant projects and then, is to be carried out through 50% of union members' investment and 50% of citizen funding, and the target rate of return is 9% for IRR, and the goal of union member and citizen dividend is to be set at 5%.

  • ESS sharing project development

ESS is to be installed and operated on the sites where a certain level of feasibility and credit can be guaranteed. In the initial stage, ESS is to be operated optimally, and profit should be generated by reducing power costs of the buildings or institution where such are installed. After that, by utilizing ESS that are operational, it should create profits by participating in the power brokerage/demand markets.

  • Scale of the capital in the local energy market

It is expected that capital scale of the local energy market will increase thru participation of the crowd funding and energy cooperative association, and will encourage citizens to participate actively in energy conversion market through the profit distribution to participating citizens.

Performance Targets

Key Performance Indicators (KPIs) Measurement Methods
  • Establishment of the project planning and funding procurements

Subjected to the sites for distributed resources, establishes the project plans including 1) ESS sharing projects, 2) photovoltaic prosumer projects, 3) the other projects of investments, costs and sales of virtual power plant projects and then, is to be carried out through 50% of union members' investment and 50% of citizen funding, and the target rate of return is 9% for IRR, and the goal of union member and citizen dividend is to be set at 5%.

  • Citizen participating energy conversion rate

The proportion of renewable energy generation (by percentage of the total power consumption rate) developed by the participation of citizens in the region is to be measured by conversion rate through pilot demonstrative project of the citizen participation-based energy production model, and plans to be increased.

  • Target profit rate of the energy trading through ESS sharing and photovoltaic prosumer

The method of funding procurement is to be carried out through 50% of union members' investment and 50% of citizen funding, and the target rate of return is 9% for IRR, and the goal of union member and citizen dividend is to be set at 5%.

  • Citizen participating energy conversion rate

The percentage rate of power generation of the renewable energy through participation of the locals in the proving area (Citizens’ generation participation rate divided by entire power consumption rate)

Standards, Replicability, Scalability, and Sustainability

  • Project sustainability
    • (Local led) By creating the new industry backbone ecosystem such as co- operative operators led by local residents / traders, watt malls / energy self-supporting villages, it is expected that through securing over 9% of the profit model, is expected to vitalize energy trade of the shared resources from participations of the citizens.
  • Project scalability
    • (ESS sharing) It is possible to continuously expand towards work places including the energy multi consumers and other business units in the subjected areas that are mandatory to introduce such,
    • (Prosumer) This can be expanded to the detached houses, multiplex housings, single-storey government office buildings and other unlisted work places, and is possible to expand B2C through electricity works and self-employment.
    • (Power Brokerage) It is intending to expand electric power brokerage service by expanding potential demand due to improved profitability of the idle lands, rooftops of the buildings, and parking lots.
  • Expandability to other areas/local entities
    • Among the 31 cities and counties within Gyeonggi Province, based on the successful case in the city of Suwon where it is fulfilling eco-friendly energy city projects, it intends to expand electric power intermediation service by expanding potential demand due to improved profitability of idle land, rooftop, and parking lots, so to have it reflected in the policy project in other political entity’s “Regional Energy plan establishments.”
    • Through the Gyeonggi Energy Cooperative, it intends to foster it as an implementing entity in a form of resident participating typed cooperative, and as social enterprise.

Cybersecurity and Privacy

Through seeking efficiency and procurement of the energy within the region under the energy management system, it intends to vitalize energy trade ecosystem led by the citizens to establish the platform on energy management system and trade. Also, when each organization creates a solution, the public (governance) is participating as a co-subject of the project from the beginning, and plays the role of mediating and sharing the amount of data of each participating enterprise.

  • Implementations using national dedicated lines secured of communication quality, security, stability, survivability etc
  • Cyber Security Management (G-IoT), using governmental G-IoT Network that support IoT service with various communication standards established by government agencies and local entities
  • Focal management on cyber security and privacy through the cooperation with Korean National Information Society Agency (NIA) that establishes and operates G-IoT

Impacts

It will present and implement detailed methodologies for achieving the goals of the “Renewable Energy 2030” for private, small-scale business, and vitalizations for renewable energy related industries It will also make suggestions to Small-scale projects such as “private” and “cooperatives” provide a way to play an active role in the energy market while maintaining “Scales of Economies”.

  • While providing dispersed resource service that is to solve the electrical power market issues In accordance with the expansion of the renewable energy, it intends to support the policies in regard with energy conversions.
  • By enabling the residents to actively participate in the energy industries such as renewable energies, it seeks to raise the acceptances.
  • This will promote the citizen-led energy industry revolution with a sustainable profit model by transforming the structure of energy ownership and distribution to local and community-based profit sharing.

This project will i) Provide services that allow distributed resources in the region to be fully disseminated, ii) let the citizens be entity of the energy investment, iii) provides basis for local citizens, self-employed, and business owners to generate and lead the revenue earning in the local energy market such as production, trading, and sharing.

  • Expected effects on economic benefits from proven projects
    • Investment opportunity 868 million KRW, profits 978 million KRW (17%)
    • Prosumer, ESS shares in expenses 1,295 million KRW
    • Citizen’s energy welfare fund investments: Within 5% of the profit
    • Expected job creations related with energy: 36

Demonstration/Deployment

This is to demonstrate the energy trading ecosystem utilizing the distributed participation of citizen participation through the energy trading model that connects solar public prosumer in public buildings and apartment complexes in Suwon city and the solar prosumer energy trade in the urban and rural areas. It verifies energy trading model focused on energy efficiency and ESS sharing of public buildings in Suwon city and distributions on resource candidate areas through photovoltaic prosumer. Also, there is a plan to establish a project including investments, costs & sales of virtual power generation projects that combine photovoltaic prosumers in the urban areas in Suwon city and Gyeonggi province’s rural and urban areas with a target profit rate of 9% of the IRR at the same time.