Development trajectory of China's virtual power plants Industry: Comprehensive quantitative evaluation using a novel dynamic multidimensional cloud model

Abstract

Virtual power plants (VPP) enhance grid stability, adaptability, and efficiency while scaling renewable energy integration. China urgently requires a robust assessment framework to advance VPP development as a significant energy consumer. This study constructs an innovative multidimensional quantitative evaluation framework, addressing the gap in the quantitative evaluation of the VPP industry and offering novel research insights. First, the development status of the VPP industry is systematically analyzed across six dimensions using the political-economic-social-technological-environmental-legal (PESTEL) model. Second, a rigorous evaluation indicator system is established by integrating the PESTEL model with Principal Component Analysis and Correlation Screening. Finally, a novel dynamic multidimensional cloud model is proposed, combining K-Means clustering and Generalized AutoRegressive Conditional Heteroscedastic methods to determine grading boundaries and automatically adjust weights, enhancing flexibility and adaptability. The development trajectory of China's VPP industry from 2015 to 2023 is quantitatively evaluated using this framework, indicating a stepwise progression with gradual advancement from low to above-average development levels, primarily driven by political, legal, and economic factors. Notably, the number of patent applications (LE1) and policy documents (PO1) consistently ranked highest, emphasizing the importance of a stable legal environment and government support. Moreover, expanding installed new energy capacity (EC17 and EC24) contributes significantly. Although ranked lower, technological, social, and environmental dimensions provide essential support during different development stages. Based on the findings, targeted recommendations are proposed to ensure the sustainable development of China's VPP industry, including strengthening policy support, optimizing economic incentives, enhancing public awareness, promoting technological innovation, reinforcing environmental protection, and improving legal safeguards.