Virtual Power Plants

A Virtual Power Plant (VPP) is a network of decentralised power generation, which can incorporate renewable generation such as wind and solar, heat generation and flexibility provided by both storage and end users. VPPS can be made up of multiples of the same asset, but are more typically made up of a mix of assets.

Central control software is used to manage supply and demand across a VPP network, but each asset remains the property of their respective owners. While bearing a passing resemblance to a microgrid, a VPP in practice functions quite differently.

VPPs are fully integrated into the grid, unable to operate in island mode, and are not limited by geographical location like a microgrid would be. VPPs are managed through aggregation software, intended to emulate the functionality of a traditional power plant control room.

VPPS can offer a number of benefits. Primarily, they are intended to network disparate energy resources to better monitor and optimise their collective performance. By providing greater flexibility in terms of both generation and demand, VPPs can be used to balance the fluctuating generation of most renewable assets.

By leveraging multiple assets, VPPs can also achieve the scale needed to engage with various grid balancing services, such as demand side response. This allows them to trade in the same way as large, centralised power generators.

VPPS have been used in limited capacity for over 20 years, but look to be coming into their own over the past five. As the mix of technologies used to generate electricity becomes broader and additional storage brings more flexibility, many companies are finding new ways to operate Virtual Power Plants. One example is a battery storage provider networking their various customers together into a virtual power plant, allowing them to shift power between the various batteries on the network to better meet changing levels of demand.