A Review of Virtual Power Plant Technology and Practice Development in China: Progress, Challenges, and Outlook

As an important vehicle for resource integration in the construction of new power systems, the virtual power plant (VPP) has moved from the demonstration and pilot stage into a critical transition period of standardized construction and market-oriented operation. This paper systematically reviews the technological development trajectory and the practical progress of VPPs in China. At the technical level, key advances are reviewed across three core domains: resource perception and adjustable potential assessment; optimal dispatch and control strategies (covering centralized, distributed, and reinforcement learning-based methods); and cloud–edge–terminal platform architecture and information security. At the practical level, the paper traces the policy evolution from the early demand response pilots to the 2025 Guiding Opinions on Accelerating the Development of Virtual Power Plants, surveys grid-led and third-party-aggregator demonstration projects, and analyzes business models and pathways for participation in electricity markets. On this basis, the key challenges facing Chinese VPPs in technical standardization, market access, regulatory frameworks, and data security are analyzed, and international experience from Europe (Next Kraftwerke, Flexitricity), North America (FERC Order 2222), and Australia (Tesla VPP) is summarized. Finally, future development pathways are discussed from four directions: technological trends (digital twins and the integration of large language models), the improvement of market mechanisms, the construction of the policy and standards system, and the cultivation of a multi-stakeholder industrial ecosystem.