Concept

Virtual power plant

Summary
A virtual power plant (VPP) is a cloud-based distributed power plant that aggregates the capacities of heterogeneous distributed energy resources (DER) for the purposes of enhancing power generation, trading or selling power on the electricity market, and demand side options for load reduction. DER assets in a VPP can include photovoltaic solar, energy storage, electric vehicle chargers, and demand-responsive devices (such as water heaters, thermostats, and appliances) with examples of virtual power plants existing in the United States, Europe, and Australia. A virtual power plant is a system that integrates several types of power sources to give a reliable overall power supply. The sources often form a cluster of different types of dispatchable and non-dispatchable, controllable or flexible load (CL or FL) distributed generation (DG) systems that are controlled by a central authority and can include microCHPs, natural gas-fired reciprocating engines, small-scale wind power plants (WPP), photovoltaics (PV), run-of-river hydroelectricity plants, small hydro, biomass, backup generators, and energy storage systems (ESS). This system has benefits such as the ability to deliver peak load electricity or load-following power generation on short notice. Such a VPP can replace a conventional power plant while providing higher efficiency and more flexibility, which allows the system to react better to load fluctuations. The drawback is a higher complexity of the system, which requires complicated optimization, control, and secure communications. An interactive simulation on the website of the VPP operator Next Kraftwerke illustrates how the technology works. According to a 2012 report by Pike Research, VPP capacity would, from 2011 to 2017, increase by 65%, from 55.6 gigawatts (GW) to 91.7 GW worldwide, generating from 5.3billionto5.3 billion to 6.5 billion in worldwide revenue in 2017. In a more aggressive forecast scenario, the clean-tech market intelligence firm forecasts that global VPP revenues could reach as high as $12.
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