Virtual Power Plant Enabling the Networking of Distributed Energy Resources

The virtual power plant can be defined as a cloud-based distributed plant that propels the heterogeneous distributed energy resources’ capacity for improving power generation, along with selling or trading power in the electricity market.

A virtual power plant (VPP) is a centralized control system that is connected to power generating and transmitting units. Owing to the connection to such units, VPP requires lesser capital and can integrate several distributed energy resources. Due to low capital investments, power deficit countries like India, Nigeria, and Indonesia are increasing their reliance on VPPs. To ensure the development of sustainable and smoothly integrated power systems, such developing countries have escalated their spending on the development of VPPs to create an adequate power infrastructure.

Over the years, the industrial, residential, commercial, and electric vehicle (EV) sectors have created high demand for VPPs, owing to the rapid digitalization of these sectors. VPP is a cloud-based system that is used for power generation, sale and purchase of power, and inter and intra electricity trade. VPP ecosystem consists of wind turbines, battery storage systems, solar plants, smart meters, electric vehicle charging stations, and demand and response management centers. Currently, EV manufacturers are emerging as the largest users of VPPs, due to the surging adoption of EVs, worldwide.

In recent years, key market players like AGL Energy Limited (AGL), Enbala Power Networks Inc., ABB Inc., AutoGrid Systems Inc., EnerNoc Inc., and Limejump Ltd. have involved in product launches, geographical expansions, and funding procurement to improve their position. For instance, ABB Inc. announced an investment, through its venture capital unit— ABB Technology Ventures, in Enbala Power Networks Inc., in February 2017. Under the partnership, the two companies aspire to jointly develop distributed energy resource management system (DERMS), to aid grid operators and electricity providers for effective management of energy lifecycle from distributed energy units.

A virtual power plant is a decentralized network equipped with medium-scale power generating units, storage systems, and flexible power consumers. VPP needs lesser capital and can be integrated with various distributed energy resources.

Depending on the specific market environment, virtual power plants can perform numerous tasks. The major objective of the virtual power plant is to network the distributed energy resources such as solar parks, combined heat and power units, and wind farms, to monitor, improve, forecast, and trade the power generated by them. It thus balances the fluctuations in generating renewables by increasing or decreasing the generation and consumption of power in controllable units.

In addition, VPP helps in stabilizing the power grids and creates preconditions for renewable energy integration. VPP can deliver the same service, by advancing the power of some units, and effectively trading on the same markets.

In addition, VPP consists of numerous single types of asset units, such as a device, battery in a demand response program, or heterogenous assets mix. The VPPs offer flexible capacity for peak electricity demands. Thus, they replace or emulate the natural-gas-fired-peakers, and support addressing distribution network bottlenecks.

Perfection cannot be acquired under the control of VPP. The control and operations of the VPP are affected by the sustainable time, regulation rate, and other factors, relevant to DER. It leads to certain variations in its performance. VPPs are needed for various ancillary services across various time scales, that need multiple control requirements

The VPP controls are required to utilize the DER characteristics. Grid interaction is also crucial for enhanced VPP control and operation.

VPP needs to manage and communicate with each DER in real-time by the control system. The involvement of a massive number of units makes it a complex process.

Thus, the control algorithm plays a crucial role in the efficient operation of VPP.

The advanced metering infrastructure is used by VPPs to implement the latest technologies for real-time metering and helps VPPs to flexibly use DER to expand its potential.

The traditional thermal power plants supply capacity when requires, and it offers a range of grid-stabilizing ancillary services, such as frequency response and voltage stabilization. VPPs can help in generating business from both types of operations.

Regarding capacity, VPPs are deployed for sidestepping the grid strengthening requirement. For instance, the utility, known as Evoenergy saved around USD $1.6 million by utilizing VPP to prevent the substation upgrade.

Since the traction of EVs on roads is increasing, the demand for reliable power supply is also rising. Such demand can be fulfilled by virtual power plants. In addition, renewable power project development creates high energy demand, which needs a developed power evacuation infrastructure to support the reliable flow.

It will propel the VPPs creation, and ensure newly developed renewable power projects integrate with power evacuation infrastructure. Thus, it will fuel the virtual power plant industry.

The major companies operating in the industry are AutoGrid Systems Inc., ENGIE Storage Services NA LLC, Limejump Ltd., EnerNoc Inc., Sunverge Energy Inc., and AutoGrid Systems Inc.

Therefore, the rising traction of the EVs on road propels the demand for virtual power plants.