IEEE Power & Energy Magazine - July/August 2021 - 70

space; China Southern invests in the BMS and cloud
platform. By participating, China Tower can reduce its
maintenance costs by about 6,200 Chinese yuan (CNY)
per base station per year. For China Southern, the batteries
can generate profits through temporal arbitrage.
The price difference between peak and valley times in
Guangzhou is 0.9962 CNY/kWh. The initial investment is
4.07 million CNY, and the technical lifetime is set as 25
years. According to current electricity prices, the payback
period is estimated to be 10.5 years. The internal rate of
return after taxes is expected to be 10%, which is very
promising for power companies. The key enabler of such
a business model is that the aggregated storage concept is
sufficiently profitable for the power grid. Currently, this
depends on at least one of the following conditions: 1) the
price difference between peak and valley times is large
and 2) storage should participate in the provision of frequency
regulation.
Distributed Virtual Storage From
Industrial Load Demand Response
Demand response from industrial loads can be seen as a virtual
storage resource since production line work schedules can
be shifted from one period to another. Such a virtual storage
effect is critical for shaving peak loads. For this, Jiangsu province
built an industrial load demand response aggregation platform
in Zhangjiagang, with a 2,000-MW load that can provide
grid service. The demand response control framework, based
on its scheduling platform, is detailed in Figure 7.
In China, the industrial load makes up about 70% of the
total electricity consumption. Therefore, it has the largest
potential for demand response. Even though it is already
subject to time-of-use prices, which shift some of the load
from peak to off-peak periods, the peak load during summer
is still a challenge for the grid. In particular, the top
5% of the peak load in Jiangsu province lasts only about 60 h.
Hence, incentive-based demand response services could
be an economical way to delay and even avoid investment
in additional infrastructure. Compared with traditional
solutions, such as generation and transmission expansion,
demand response could improve the utilization rate of current
transmission and generation assets, thus improving the
economic performance of the entire system.
Demand response schemes have long been present in China.
Their development can be categorized into three stages, as
shown in Table 3. The current cloud platform in Jiangsu is based
on demand response 3.0 technology. The real-time process
involves the power system dispatching center, industrial loads,
and demand response operators, which receive dispatch orders
from the power grid and send control commands to demand
response participants. The participants, i.e., factory production
lines, are equipped with terminals that can monitor and
control the flexible load. The energy storage potentials of different
participants are distinct because of the response capacity
and duration of various industrial production processes.
For example, cement production includes limestone crushing
and storage, raw material grinding, waste gas treatment, and
so on. The maximum demand response duration for limestone
crushing and storage usually lasts about 8 h, while cement
grinding may last around an hour. The scheduling of different
demand response participants is thus usually obtained by
solving a large optimization problem.
BMS
Switching Power
Supply Device
Communication Devices
Batteries
figure 6. Base station components for cloud storage.
70
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july/august 2021
IEEE Power & Energy Magazine - July/August 2021

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