Discussion Paper

VPP/ Micro-grid Strategy & Development in Taiwan

Nomura Research Institute, Ltd.

Consulting Division

August 2020
Background & Agenda

Background & Objective

• Nomura Research Institute (NRI) is helping a Japanese IT company that provides cloud services
to explore opportunities in the VPP/ Micro-Grid market which could strengthen Taiwan Power
Company (TPC)’s capabilities in Taiwan
• We would like to understand TPC’s plans for the next 5 years regarding their VPP/ Micro-Grid
solutions and activities, current progress, and impact on the plans due to Covid-19

Discussion Agenda
The objective is to understand if our client can be of service to TPC for VPP/ Micro-Grid related
projects. To do so, this discussion will be based on clarifying and identifying:
1. TPC’s overall strategy/ plan for VPP and Micro-Grid in Taiwan
2. Current progress and challenges faced
3. VPP/Micro-Grid project pipeline (future)
4. Existing partnerships
5. Possibility of establishing a new partnership

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 1

TPC – Current Situation
Based on a report published by Taiwan Smart Grid Industry Association (TSGIA) in 2016,
titled “The Development of Smart Grid Industry and Technology in Taiwan”, we are aware
that TPC is involved in several demonstration projects related to VPP and Microgrid

List of Smart Grid Demonstration Sites Set or Involved by

Domestic Industry, University and Academy in Taiwan
Questions
1. What is TPC’s roles and responsibilities in such
demonstration projects in Taiwan?
❖ Purpose/ Goals/ Objectives?
❖ Why are there so many demonstration projects?
2. Particularly for VPP and Micro-Grid related demonstration
projects, what is the current situation/ status of these
projects?
❖ Given that this report was published in 2016, are
the projects already completed?
❖ What are the challenges or issues faced?
3. Are there any more upcoming demonstration projects in
the pipeline that TPC will be involved in – specifically for
VPP/ Microgrid?
❖ Could you kindly share with us more information
on the new project details? (i.e. project name,
timeline, partners, goals, etc.)
4. Is TPC looking out for new partners (e.g. network solution
provider, system integrator, etc.) to collaborate with for
new demonstration projects?
❖ Assuming TPC is keen on new partnerships, how
can such companies participate in the
demonstration project?

Source: Taiwan Smart Grid Industry Association (TSGIA) Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 2
We understand that all demo projects are mission-oriented application projects where the
aim is to validate technologies and its potential to be implemented on a larger scale
context in future.
▪ Such demonstration projects are used as platform for coordination with TPC’s smart grid-related technology requirements and
deployment schedule. The technology commercialization process of Smart Grid General Project Phase II will be implemented as shown
in the diagram below.

Smart Grid Focus Center of National Energy Program- Phase II 2016-2018

1

Questions
1. Based on our understanding,
there have been both
successes and failures
among the different demo
projects conducted so far.
❖ Are there any projects
2 that have proceeded on
to implementation
stage – particularly for
Microgrid or VPP?
3 ❖ Which are the projects
that have transited to
implementation stage?

Source: Taiwan Smart Grid Industry Association (TSGIA) Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 3
References) Existing Demonstration Sites of VPP Integration System in Taiwan

Source: Taiwan Smart Grid Industry Association (TSGIA) Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 4
TPC – Latest VPP Activity (1/2)
On July 18, 2020, Taipei Times published an article stating that TPC is building Asia’s first
‘Virtual Power Plant’ which will come online as early as end 2020

You may access the article directly via the link below:
https://www.taipeitimes.com/News/biz/archives/2020/0
7/18/2003740098

We understand that VPP in Taiwan is still at the

infancy stage where a lot of VPP related activities are
for research and academia only

Questions
1. Could you comment and share with us more details
about this news article?
❖ Is this an implementation project for VPP?
❖ Who are the partners involved and what are
their responsibilities? (i.e. SW companies/
Network application platform/ battery control
vendors, etc.)
❖ How are the partners/ vendors selected?
❖ Are there any opportunity for new partnership
or collaboration with non-Taiwanese
companies?
❖ What is the plan for the Ancillary Service
Trading Trial Platform?

Source: News Articles Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 5
TPC – Latest VPP Activity (2/2)
On July 23, 2020, Enel X has similarly published an article regarding Demand Response
program in Taiwan. Particularly, it was a collaboration with TPC to support Taiwan’s
electricity grid

Access the full article directly via the link below:

https://www.enelx.com/en/news-and-
media/press/2020/07/enel-x-launches-demand-
response-program-in-taiwan?ecid=soc_organic-linkedin-
DR-PPL-23_07_2020

Questions
1. Could you comment and share with us more details
about this news article?
❖ Previously we note that TPC had collaborated
with Enel X (formerly known as EnerNOC
Taiwan) and based on this latest article, is this
another initiative by TPC?
❖ Is this a demonstration or implementation
project?
❖ Who are the partners involved and what are
their responsibilities?

Source: News Articles Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 6
TPC – Latest Activity (Case Study)

TPC has recently announced a partnership deal with Delta Electronics for the
provision of the largest energy storage solution for its Xia Xing Power Station.
1. Is this project related to VPP entirely / Microgrid demonstration project?

Business Plan Summary Business model

• Delta will provide a 1MWh lithium-ion battery energy storage HW/SW Solution
system, a 2MW capacity power conditioning system, an energy (i.e. Energy Storage System,
management system (EMS) platform, and an environment EMS platform, etc.) Xia Xing
management systems for installation at the utility’s Xia Xing Power
Station
Power Station
• The solution is expected to help TPC to stabilize the grid by
quickly supplying backup power within 200ms after an Delta Mfg. Energy Provision of backup
Plant, Taiwan Data power where needed
unplanned generator outage takes place, provide a 30-minute
buffer time to the power plant, and regulate the fluctuations
caused by renewable energy on the grid Tashan
Power
Plant
$$
(by TPC)

• TPC has always been conservative on energy storage

projects and 2020 is the year we decided to embark
Challenge or issue
on it by collaborating with Delta
• The project is the first smart grid demonstration in Taiwan and
• Our responsibility is to manage the grid and using is expected to help the country define a model that will be used
EMS is a way for us to achieve it to guide the construction of smart grids on Taiwan’s main island
in the future
• As the project was launched in 2020, challenges or issues have
Taiwan Power Company yet to surface

Source: News Articles Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 7
Overall, who are the parties responsible for driving initiatives pertaining to all microgrid
and VPP demonstration project planning? Is it TSGIA?
→ How can interested parties apply to join such demonstration projects?
→ Who is the key person or company that we can speak to?

Demonstration Projects Example from Phase II (2016~)

• INER Autonomous Hundred-kW level Microgrid Demonstration System

• NCCU Smart DC Power System Educational Demonstration House
• Yulon Motors Micro-grid and Electric Vehicle Demonstration Site
Microgrid
• Smart Micro Grid Demonstration Zone in Linbian Township, Pingtung County
• Offshore Micro Grid System in Taiping Island
• Others…

• Demonstration of Virtual Power Plant Application in New Taipei City

• Trial Automated Demand Response project for Airconditioning
• NCU Smart Meter Reading & Demand Response System
• Taiwan Power Research Institute Shulin District Smart Energy Use Demand
VPP
Side Management Demostration Site
• Integrated Distributed Energy Resource Management System - Taipower
Research Institute, Shulin District
• Others…

Source: Taiwan Smart Grid Industry Association (TSGIA) Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 8
Reference) Taiwan Smart Grid Industry Association Organization Chart

Source: Taiwan Smart Grid Industry Association (TSGIA) Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 9
Others) Key Questions

Additional key questions

Theme Sub Theme Questions

TPC related Strategy • What is the overall strategy and plans (under TPC’s pipeline) for VPP/ Microgrid market in Taiwan?
projects • Are there any other new initiatives or policies that will be introduced by the govt. for more demo projects – and
will TPC be involved in such projects?

Project Details • What is the timeline/ when will Taiwan’s demonstration projects be transited to its implementation phase?
• Will there be more demonstration projects given its successes/ failures so far?

Challenges & • What are the current difficulties faced regarding the VPP/Microgrid landscape in Taiwan?
Opportunities • Can we understand both technology and non-technology related issues?
• Will TPC be interested in having a new partner to strengthen or test some of the services it is currently
pursuing/ providing? (i.e. network system, etc.)

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 10

Reference) TPC – Overall Plan (Current situation, our understanding)

Ref) In line with the Government’s push towards smart energy, TPC has a Smart
Grid Strategy which it is currently implementing to facilitate its transformation
Smart Grid Strategy
6 Major Themes
Smart Dispatch Grid Energy Storage Demand side ICT Statutory
and Generation Management Systems Management Infrastructure Regulations & HR

Action Plan and Objectives (for smart energy transition)

Theme Overview Related Solution

Smart Dispatch • Enhancing the power grid by introducing real-time monitoring system to reduce uncertainty from
• Facility Asset
and Generation renewable power generation
Management
Department of System • Improving power generation forecasting through the use of data analytics with info collected from smart
• Smart Meter
Operations meters

Grid • Introducing IEC 61850 standard communication protocol at substations to improve interconnectivity and • Energy Mgmt.
Management grid resilience to provide advanced notice of abnormalities in power distribution system System (EMS)
Department of Power
Supply • Managing transmission equipment assets through a condition monitoring platform and big data analytics • VPP

Energy Storage • Active development of energy storage systems to improve power supply stability given the increasing
• Micro-grid
Systems usage of renewable energy
• EV Charging
Department of System • Usage and development of emerging IT tools in areas such as renewable energy device quantities, system
Stations/ Infra.
Planning control resources, and power generation forecasting to complete its energy storage systems

Demand Side • Smart Meter

Management • Strengthen big data analytics of smart meters and value-added applications,
• EMS
Department of • Improve system visualization and customer interaction/participation to promote energy efficiency
Business • VPP

Source: TPC Sustainability Report 2019 Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 11
Reference) TPC – Overall Plan (Current situation, our understanding)

Ref) Based on the target and timeline for its Smart Grid Strategy, TPC is currently
at the expansion stage which is in progress and set to be completed by end 2020
Target and Timeline of Taipower Smart Grid (non-exhaustive)
Stage Smart Dispatch & Generation Smart Transmission Smart Distribution Customers of Smart Services
Build-up • Build a reliable and • Execute a pilot program for • Construct smart substations • Build high/low-voltage
(2011-2015) interconnected dispatch a Special Protection System automated metering
communication system (SPS) infrastructure (AMI)
• Dispatch renewable energy • Renew heat-resistant wires • Strengthen the mapping • Demonstrate demand
connected with the grid on a system of distributed response
large-scale networks
• Demonstrate advanced • Build reactive power device • Strengthen information • Research and discuss an
equipment asset control (RPDC) management of the electricity rate system that
management distribution system by reflects power supply costs
employing data from smart and offers incentives for
Expansion meters saving electricity
(2016-2020)
• Dispatch demand response • Continue to renew • Research integration and • Review the control objects
protective relays apply a Common and methods of demand
Information Model (CIM) response
standard
• Implement an incentive • Monitor the dynamic
system for renewable energy thermal rating (DTR) of the
development network Ongoing
Consolidation • Build variable speed • Assess and apply Flexible • Manage renewable energy • Promote household-level
(2021-2030) operation control systems Alternating Current grid connection capacities distributed power and
for pumped storage power Transmission Systems energy storage management
plants (FACTS) systems

Source: TPC Sustainability Report 2019 Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 12
Reference) TPC – Overall Plan (Current situation, our understanding)

Ref) Projects that are approaching completion may soon enter its consolidation
stage. Only AMI related projects’ progress can be accurately measured
Target and Timeline of Taipower Smart Grid (non-exhaustive)
Stage Smart Dispatch & Generation Smart Transmission Smart Distribution Customers of Smart Services
Build-up • Build a reliable and • Execute a pilot program for • Construct smart substations • Build high/low-voltage
(2011-2015) interconnected dispatch a Special Protection System automated metering
communication system (SPS) infrastructure (AMI)

Expansion • Dispatch renewable energy • Build reactive power device • Strengthen the mapping • Demonstrate demand
(2016-2020) connected with the grid on a control (RPDC) system of distributed response
large-scale networks
• Build variable speed • Assess and apply Flexible • Manage renewable energy • Promote household-level
operation control systems Alternating Current grid connection capacities distributed power and
for pumped storage power Transmission Systems energy storage management
plants (FACTS) systems
• Promote advanced • Make asset management • Develop regional energy
equipment asset equipment storage systems
management
Consolidation • Assess and apply advanced • Construct smart substations
(2021-2030) power generation
technologies
• Optimize the dispatching
platform through review and
renewal
• Research large-scale energy
storage systems
Future

Source: TPC Sustainability Report 2019 Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 13