Prospects for the Development of a New-Type Power System

　　At its second meeting held on the afternoon of July 11, the Central Commission for Comprehensively Deepening Reform reviewed and approved documents including the “Guiding Opinions on Deepening Power System Reform and Accelerating the Development of a New-Type Power System.”

　　The meeting noted the need to deepen reform of the power sector and accelerate the development of a new type of power system that is clean and low‑carbon, secure and well‑supplied, economically efficient, coordinated between supply and demand, and flexible and smart, thereby further advancing the energy production and consumption revolution and safeguarding national energy security. The meeting emphasized the importance of scientifically and rationally designing the roadmap for building this new power system, gradually reducing the share of conventional energy sources in a planned, phased manner, on the basis of ensuring the safe and reliable substitution of new energy. It also called for improving the institutional mechanisms suited to the new power system, and for promoting innovation in power‑related technologies, market mechanisms, and business models. Moreover, it stressed the need to better integrate an effective market with a proactive government, continuously refine the policy framework, and ensure the adequate provision of basic public services in the power sector. This paper aims to explore and offer a forward-looking perspective on the construction and development of the new power system.

　　Scientifically and Rationally Designing the Development Path for a New-Type Power System

　　In the course of the clean, low‑carbon energy transition, the large‑scale integration of new energy sources such as wind and solar power poses significant challenges to the operation and control of the power system. The randomness, intermittency, and volatility of these renewables render the power‑balance problem in system planning and operation probabilistic, thereby reducing supply reliability to some extent. Moreover, the traditional “generation follows load” paradigm—where generation output is adjusted in response to load variations—will give way to a more collaborative “source‑load interaction” model.

　　Following disturbances, the stability characteristics of power systems have evolved from a traditional electromechanical‑dominant regime to a multi‑mode coupled electromechanical–electromagnetic interaction. Consequently, system stability analysis and control have attracted widespread attention. On the generation side, low inertia and low short-circuit ratios are increasingly pronounced, steadily eroding the system’s ability to maintain secure and stable operation; on the load side, dynamic characteristics are becoming ever more complex; and on the grid side, coupling between AC and DC networks, as well as among multiple DC links, has grown significantly tighter.

　　In recent years, several major blackouts triggered by grid‑equipment failures have occurred overseas, sparking intense debate. On September 28, 2016, South Australia experienced a state‑wide blackout that lasted 50 hours. On August 9, 2019, the United Kingdom suffered a large‑scale outage affecting approximately one million customers. From February 15 to 19, 2021, Texas endured a severe power crisis, with as many as 4.5 million people impacted; the state’s electric grid was placed under Level 3 emergency conditions, with maximum load shedding reaching 20 GW and real‑time market prices exceeding $9,000 per MWh.

　　Thus, it is clear that, to ensure a safe and reliable electricity supply, conventional energy sources will continue to serve as baseload and ancillary power resources for the foreseeable future. The energy transition cannot be achieved overnight; rather, it must proceed in a planned, phased manner, gradually reducing the share of conventional energy.

　　Improving the institutional mechanisms to adapt to the new-type power system.

　　Under the “dual carbon” goals, as high‑proportion intermittent renewable energy sources are integrated into the grid, it is essential to refine the institutional mechanisms that can accommodate the new type of power system. In conventional wholesale electricity market designs based on real‑time pricing theory, the near‑zero marginal costs of solar and wind power drive down market clearing prices—sometimes even into negative territory—thereby crowding out traditional thermal and nuclear generation in margin‑based bidding. This makes it difficult for thermal and nuclear plants to remain viable, leading to an imbalanced generation mix and undermining the security and flexibility of the power system. Meanwhile, the randomness, intermittency, and volatility of solar and wind power pose significant challenges to system operation and control, sharply increasing the demand for system flexibility and necessitating adequate economic incentives for flexibility‑enhancing resources.

　　Under the “dual carbon” goals, designing new market mechanisms that accurately reflect the value of electricity with different quality levels is of paramount importance. In the context of the new power system, emerging technologies and business models—such as flexible loads and virtual power plants—have garnered widespread attention as cornerstones of the “source‑load interaction” operating paradigm.

　　Flexible loads encompass adjustable or shift‑able loads with demand‑side resilience, electric vehicles capable of bidirectional regulation, energy storage systems, thermal storage, distributed generation, microgrids, and more. Their electricity consumption patterns can respond flexibly to price signals, making them a key source of flexibility for the power system. In large cities where supply struggles to keep pace with growing demand, flexible loads also play a critical role in smoothing peak‑and‑valley fluctuations and ensuring the safe and reliable operation of the grid. As electricity market reforms advance, the conditions for flexible loads and virtual power plants to participate in both the day-ahead and ancillary services markets are steadily being established, and viable business models are gradually taking shape.

　　Promote a better synergy between an efficient market and a proactive government.

　　The economic efficiency and safety of the power system are two sides of the same coin, with economic efficiency resting on a foundation of safety. Without safety, there can be no meaningful discussion of economic efficiency. For a long time, China’s power system has prioritized safety above all else, while paying insufficient attention to economic considerations. As a result, grid operations have maintained substantial safety margins, and there has even been a tendency toward excessive investment in pursuit of safety. The reform of the electricity market reflects the Central Committee of the Communist Party of China and the State Council’s high regard for the efficiency and economic performance of the power system, marking a new chapter in the development of China’s power industry and ushering in unprecedented opportunities.

　　In the design, operation, and regulation of electricity markets, ensuring the security of the power system must remain a fundamental consideration at all times. In the non‑commercial segments of the electricity market, due regard should be given to the role of planning—encompassing both government intervention and grid‑level planning and management—so that the “visible hand” of planning and the “invisible hand” of the market can work in tandem, leveraging their respective strengths while mitigating their weaknesses, thereby fully harnessing the advantages of China’s public‑ownership‑dominated power sector and its socialist market economy.

　　Specifically, in areas where safety is paramount—such as natural monopolies and public‑service sectors—it is appropriate to adopt planned management; in contexts where economic efficiency takes precedence, market‑based mechanisms are more suitable. For segments that fall somewhere in between, the choice should be determined on a case‑by‑case basis. An efficient market and a proactive government must clearly delineate their respective spheres of competence. Only by ensuring that government oversight effectively delivers public services and safeguards grid security can market transactions become freer and smoother, thereby playing a truly decisive role in resource allocation.

　　Building a New-Type Power System with Hierarchical Clusters

　　The production, transmission, and consumption of electricity and energy typically rely on various types of networks, such as power grids, district heating networks, and gas pipelines. Since these networks fundamentally transport energy—albeit in different forms—they are collectively referred to as energy networks. An energy network comprises subnetworks for different energy carriers (e.g., power grids, heating networks, gas networks), which are interconnected via energy‑conversion devices such as generators, pumps, air conditioners, and water heaters.

　　Thanks to the rapid advancement of information and communication technology (ICT), in addition to the physical energy network, an information network can be established—leveraging conventional automation, Internet technologies, and emerging innovations such as cloud computing, big data, the Internet of Things, mobile connectivity, artificial intelligence, and blockchain—to regulate and control equipment for energy generation, storage, transportation, and utilization. Meanwhile, the trading and value‑transfer processes of electricity and energy commodities give rise to a value network. This value network underpins the pricing framework for electricity and energy and is constrained by the physical laws governing the energy network. Consequently, the new‑generation energy system and the next‑generation power system will adopt a three‑layer network architecture—energy–information–value—where these layers are tightly coupled and mutually interconnected.

　　In the new‑type power system, renewable clean energy sources such as wind and solar will be ubiquitous, implying that generation resources will be distributed throughout the entire grid and that the system’s structure and configuration will undergo significant transformation. Academician Yu Yixin of Tianjin University and his colleagues have proposed a hierarchical, cluster‑based power‑grid architecture, characterized by “a layered structure decomposing the system into clusters, coupled with global coordination,” and by “each cluster maintaining its own net power balance and local self‑optimization.” For clarity, this paper refers to power systems exhibiting these structural features as “hierarchical, cluster‑based new‑type power systems” and further examines their operational and control challenges.

　　The hierarchical‑clustered next‑generation power system also features a three‑layer network architecture—energy–information–value—and is closely integrated with other energy systems. The planning and operational challenges of such a system can be categorized into three levels: physical mechanisms (the “energy network” layer), operational control (the “information network” layer), and market transactions (the “value network” layer). These constitute a quintessential multidisciplinary problem that requires collaborative, cross‑disciplinary and cross‑sectoral efforts to resolve.

　　In traditional power systems, large-capacity generating units are typically located in regions rich in primary energy resources and transmitted over long distances via ultra‑ or extra‑high voltage transmission lines to load centers. As the transition unfolds from conventional grids to next‑generation power systems, in line with the national “dual carbon” goals and the imperative of ensuring energy security, the gradual phase-out of conventional energy sources must be underpinned by the safe and reliable substitution of new energy sources. With the progressive increase in the penetration of low‑carbon and zero‑carbon energy technologies and end‑use loads, the transformation of the power system will follow a “build first, then dismantle” approach.

　　During the transformation of the power system, power utilities and other market participants will progressively increase the utilization of distributed energy resources within the grid—particularly at the customer side and in distribution networks—and advance the development of distributed smart grids. This implies that the structure and functions of distribution networks will undergo significant changes, with large-scale integration of distributed energy resources, electric vehicles, energy storage systems, and flexible loads.

　　Taking photovoltaic power generation as an example, China’s total installed photovoltaic capacity has been increasing rapidly year after year. Since 2016, both new and cumulative installed capacity have ranked first worldwide. To ensure that photovoltaic‑ecological projects and agrivoltaic systems—developed across vast deserts, arid lands, abandoned industrial and mining sites, and rural areas—can deliver stable power supply, it is essential to enhance their flexibility and convenience while substantially reducing their impact on the planning and operation of existing power generation, transmission, and distribution infrastructure.