A power plant but virtual

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A power plant but virtual

18 Apr

2024

Thomas Craps

Energy & Utilities Consultant

min. read

Virtual Power Plants (VPPs) are a modern concept in energy management that leverage digital technologies to aggregate and optimize the operation of distributed energy resources (DERs) such as solar panels, wind turbines, battery storage systems, and demand response units. Essentially, a VPP functions as a centralized control system that orchestrates the collective actions of these distributed energy assets to operate as a single, unified power plant. VPPs can play a crucial role in integrating renewable energy sources into the grid by providing flexibility and controllability to offset the variability and intermittency inherent in solar and wind power generation. By aggregating distributed renewables and storage assets, VPPs enable higher levels of renewable energy penetration while ensuring grid reliability.

Aspects of VPPs

Aggregation of Distributed Energy Resources (DERs): A VPP brings together a diverse range of DERs located across various geographical locations. These resources can be owned by different entities, including households, businesses, and utilities.
Communication and Control Systems: Advanced software platforms and communication technologies enable real-time monitoring and control of the DERs within the VPP. These systems allow operators to remotely manage and coordinate the operation of individual assets according to grid conditions, energy market dynamics, and specific operational objectives.
Optimized Resource Dispatch: The VPP optimizes the dispatch of distributed energy resources based on factors such as energy demand, grid constraints, weather forecasts, and electricity prices. By intelligently scheduling the charging and discharging of batteries, adjusting solar panel output, and participating in demand response programs, a VPP can maximize the value of the aggregated resources while ensuring grid stability and reliability.
Flexibility and Resilience: VPPs enhance the flexibility and resilience of the electricity grid by integrating a diverse portfolio of distributed energy resources. During periods of high demand or grid disturbances, the VPP can dynamically adjust the operation of its assets to balance supply and demand, mitigate voltage fluctuations, and maintain grid stability.
Grid Services and Revenue Generation: Virtual power plants can provide a range of grid services to utilities and grid operators, including frequency regulation, voltage support, peak shaving, and capacity reserves. By offering these services, VPP operators can generate revenue through participation in energy markets, ancillary service markets, and demand response programs.

Different strategies for Grid Services and Revenue Generation

VPP operators can opt for different ways to position themselves between the parties that purchase flexibility and the owners of the DERs.

1. Operate as a flexibility aggregator

The first option is to operate as an aggregator of flexibility and negotiate with market participants to generate revenue for the owners of the DERs they control. This way the DER owners can receive compensation regardless of the energy supplier they are contracted to. The VPP operator can use a portion of the revenue to finance operating costs.

2. Operate as a facilitator

The second option is to give the energy supplier of the DER owner access to their real-time available capacity via an API so that the energy supplier can use the DER for passive (and inactive) imbalance. The energy suppliers are program responsible and can pay out the extra revenue to these clients (aggregated or individual). The VPP is more of a facilitator in this strategy, mainly focusing on making sure that the DER owner has the best financial return.

Conclusion: VPPs driving grid flexibility and sustainability

Overall, virtual power plants represent a sophisticated approach to energy management and grid optimization, harnessing the collective power of distributed resources to create a more flexible, resilient, and sustainable energy system. As the transition to clean energy accelerates, VPPs are expected to play an increasingly vital role in shaping the future of the electricity grid while maximizing the assets of DER owners.

Trilations firmly believes that Virtual Power Plants (VPPs) will undoubtedly play a pivotal role in achieving sustainable grid optimization. That is why we are dedicated to staying at the forefront of any new relevant developments and to sharing our insights and proposed solutions with you.