JEJU-DO < invest Korea

“If coal-based thermal power generation has historically been the driving force behind human development, wind and solar power are poised to take its place in the future. Considering that Jeju boasts the largest renewable energy market in Korea, particularly in eco-friendly energies such as wind and solar power, we established our company on the island in 2021. Theupcoming power market will center around distributed energy, where virtual power plants (VPPs) and power intermediary platforms play crucial roles. With continuous research and development and strengthened technological capabilities in this area, VPPlab plans to extend its presence nationwide beyond Jeju. Witness how VPPlab evolves into a leading energy company, representing Jeju, with robust support from exceptional partners, diverse programs, and investment attractions.”

Cha Byeonghak, CEO of VPPlab

CEO Cha Byeonghak introduced VPPlab as an Information and Communication Technology (ICT) company founded in Jeju, harnessing the distinctive green renewable energy of the island. In its name, VPP refers to virtual power plants.Traditional thermal or nuclear power necessitates the operation of massive physical power plants, incurring significant costs, equipment, and environmental burdens. In contrast, VPP utilizes ICT technology to connect and control small-scale energy sources, such as solar and wind power, seamlessly integrating and controlling them like a power plant, creating an eco-friendly virtual power plant. VPPlab, achieving remarkable results in operating an ICT-based power plant that doesn't physically exist, has captured our interest.

Q  Could you share the founding story of VPPlab based in Jeju?

The in-house venture program, "POVENTURES," was introduced to POSCO International (then POSCO Energy). Working in the new business department since 2015, I developed a keen interest in the future changes in the power industry and gained confidence in the market potential of distributed energy and VPPs. Our entrepreneurial journey began when we were selected as the first in-house venture in 2021, with Jeju as our starting point—the heart of renewable energy. Rich in both solar and wind energy, Jeju provided ideal conditions for testing technologies related to renewable energy, as well as operating VPPs and a power intermediary platform. 

VPPlab operates as an energy tech company, connecting small-scale renewable energy providers in eco-friendly energy generation and energy storage systems (ESS) based on electric vehicles, the power exchange market, businesses, households, and other power consumers. With Jeju's perfect hardware and VPPlab's software prowess, we make an exceptional partnership.

 Q  The growth rate of VPPlab has been remarkable since its founding in 2021. Congratulations on the recent selection for DEEP-TECH TIPS.

Above all, starting the company in Jeju was a stroke of genius. Upon commencing our business, we were offered office space and collaborative workspaces by the Jeju Innovation Growth Center. Thanks to tailored growth programs that encompassed partnerships, collaborations, joint business model development with various startups, and opportunities for attracting investments, we were able to embark on our journey with confidence. Subsequently, we prepared for VPP operation as a solution to address Jeju's surplus electricity issue and launched the FLOW service, a small-scale power intermediary platform, in 2022.

In terms of corporate investment, we gained attention by being selected for POSTECH Holdings' IMP1 Fund and the 9th cohort of Startup Next hosted by the Korea Credit Guarantee Fund. In 2021, we were chosen as the lead organization for a project to foster local R&D leaders under the Ministry of SMEs and Startups, conducting the project titled "Demonstration of Jeju's Distributed Energy-Based Open Power Platform and Development of Jeju-Style Energy Prosumer Model." Later, we secured investments from the Seoul Business Agency and MYSC, an impact investment firm, for pre-Series A funding. 

In September 2023, we heard the news of being selected for the Ministry of SMEs and Startups DEEP-TECH TIPS program, reaffirming that both I and all employees are taking the right path. The value of a startup is evaluated not only by its achievements but also by the support of investors. We are delighted to be selected as the first promising startup in the new industry sector and to receive fast-track benefits from the "Super Gap Startup 1000+ Project: DEEP-TECH TIPS" in Jeju. We are also honored to be recognized as a leader in the eco-friendly sector in KT's startup support program called "Warm-Hearted Technology Plus." This acknowledgment has provided us with technical and management consulting as well as business funds. With support for research and development expenses and overseas marketing funds, we will channel more strength into the advancement of the VPP platform.

Q  What is VPP, VPPlab's core business, and why is VPPlab the ideal choice?

Solar and wind power generation are eco-friendly renewable energy sources, requiring no chimneys in the generation process. Utilizing nature's freely provided sunlight and wind as raw materials makes them virtually infinite. However, due to weather influence, predicting their output becomes challenging. Green energy, characterized by significant variability, emphasizes the importance of predicting and managing power. Virtual Power Plants (VPPs), acting as power intermediaries, operate on software technology predicting the output of each renewable energy power plant, including solar energy. In the renewable energy sector, IT expertise is crucial, not only for power generation but also for effective communication between power plant operators, utility companies, and end consumers. 

VPPlab is actively involved in the power intermediary business tailored to Jeju's renewable energy market, participating in various local and international pilot projects within and outside the province. We have successfully demonstrated a project predicting output from a large-scale wind farm owned by the Jeju Energy Corporation. As renewable energy gradually expands, selecting a VPP operator with solid technical and operational capabilities becomes crucial. VPPlab takes pride in being a platform company that efficiently managesrenewable energy. With Korea's top capabilities in predicting power generation and a VPP integration solution, we are ideally positioned to promote distributed energy in Jeju.

Q  Can you elaborate on VPPlab's FLOW, Plus DR, and V2G services?

The world is currently grappling with a climate change crisis, disrupting seasons and causing unexpected climate disasters. In response, Jeju has declared itself a carbon-free island, and environmentally conscious businesses are gaining attention for their environmental, social, and governance (ESG) practices. From the ubiquitous solar panels to the picturesque large wind power facilities scattered across Jeju, these represent eco-friendly renewable energy sources. 

Starting in February 2024, Jeju is embarking on a pilot project to enhance the power market. Traditionally, managing renewable energy generation in Jeju involved output control due to the challenge of predicting production. However, a significant shift is underway with the introduction of the "Renewable Energy Bidding and Real-time Market System," a pioneering initiative in South Korea. This system effectively addresses the volatility of renewable energy, providing not only profits for businesses but also ensuring a competitive and fair power supply for consumers. 

FLOW is a platform enabling power intermediaries to seamlessly participate in power brokerage by offering precise power generation predictions through AI. 

Plus DR is a system that incentivizes electricity consumption as planned during periods of expected excess renewable energy generation, optimizing power usage plans. Users can earn additional revenue while consuming electricity by registering as a Plus DR resource with VPPlab. 

V2G is a service utilized by owners of electric vehicles, also known as “running ESS.” It leverages electric vehicle batteries as storage, allowing users to charge their vehicles during periods of low electricity prices and sell power during peak hours, thereby reducing vehicle maintenance costs.

Q  What is the definition of distributed energy, renewable energy, and green energy, and what impact do they have on our daily lives?

The value of small-scale distributed energy resources such as solar and wind power generation, electric vehicles, and separate storage devices like ESS is immeasurable. Like a gem gaining value through craftsmanship, accurately predicting the volatile renewable energy generation and supplying power reliably through VPPs will drive significant changes in the traditional energy market, such as thermal or nuclear power. The real-time wholesale power market, scheduled for a pilot operation in Jeju starting February 2024, will enhance the competitiveness of the power market, leading to changes in power consumption and real-time adjustments to consumer electricity bills.

Q  As VPPlab's services flourish, Jeju will see more utilization of renewable energy.

The virtual power plant (VPP), a system that integrates and manages data from renewable energy generation facilities that are challenging to operate or manage across Jeju, using cloud-based software, is an area in which VPPlab excels. VPPlab efficiently channels produced renewable energy to homes and businesses through VPP without waste, while fostering a power platform that charges surplus power into electric vehicle batteries for utilization as ESS. For these tasks, there is no better place than Jeju. VPPlab aims to lead the sustainable distributed energy era at a time when overall industry demand, including renewable energy prediction, meeting demand, and power brokerage, is explosively expanding. Moreover, the Special Act on Distributed Energy, scheduled to be implemented in June 2024, presents a significant opportunity in Jeju's renewable energy sector. Thus, VPPlab is gearing up for efforts to assist Jeju in being designated as a special zone for distributed energy.

Q  As a Jeju-based business, can you tell us about VPPlab's talent acquisition and business scalability?

Considering the past three years as a period of solid foundational work, VPPlab sees 2024 as a pivotal leap forward in the new power market. As a tech-driven platform company, we consider talent acquisition crucial. We started with just two people at the founding, but currently, 18 employees are demonstrating their capabilities. Given the nature of VPP operations, we plan to supplement our team with IT specialists and communication personnel from Jeju for seamless power intermediary services. Efforts are also directed towards securing data superiority for the reliable operation of VPP. 

After the Jeju pilot project in 2024, we anticipate the nationwide expansion of the VPP business in 2025, bringing forth numerous tasks in the years ahead. Having received recognition from investors with a valuation more than tenfold in the third year of our founding, we are planning a Series A funding of KRW 5 billion in 2024. After being selected as a participating company in the International Consumer Electronics Show (CES) 2024, we are actively preparing for a full-fledged entry into the global market. Through VPPlab, we aim to realize our commitment made at the founding to provide "clean energy whenever needed." Please look forward to our journey as we strive to maximize the efficiency of distributed energy and green energy in Jeju, poised to become the center of carbon neutrality.