Virtual Power Plants and DER Management Systems

In an article for Microgrid Media, Navigant Research looks at how evolving technologies can solve challenges in the digital grid

Virtual power plants (VPPs) continue to evolve and now have the capacity to identify and control millions of grid resources, incorporating larger assets at commercial and industrial sites and extending all the way downstream to smart thermostats and solar PV systems in homes.

“The VPP offers one path forward in creating mechanisms by which the physical properties of electric current are managed in a safe and reliable way,” said Peter Asmus in a recent article for Microgrid Media. “If designed intelligently and implemented via software platforms that can accommodate distributed energy resources (DER) complexity, a VPP can help foster a system in which a full portfolio of grid services can be provided by the same DER components that were once feared to be the primary contributors to grid imbalances.”

When VPPs are combined with transactive energy (TE), which — at the most basic level — involves the free communication of information among parties, allowing them to enter into energy service exchanges, new revenue streams for diverse energy market stakeholders are bound to pop up.

VPPs and TE are similar in that they place prosumers — formerly passive consumers that now also produce energy — front and center in an emerging market for grid services delivered by DER,” Asmus said. “The VPP model presents a compelling vision of the future, as does TE.”

In his recent Navigant Research report, VPP Transactive Revenue Streams, Asmus identified six grid services that could be enhanced by integrating TE within the VPP framework:

  • Localized clean energy
  • Virtual capacity
  • Real-time demand response
  • Fast frequency regulation
  • Smart voltage control
  • Big data from small sources

So, do VPPs create opportunities for TE revenue streams, or vice versa?

“Most likely, these two DER platforms will evolve in parallel,” Asmus said. “DER management systems that can harmonize VPP and TE platforms must incorporate market pricing mechanisms to reflect the changing value of millions of connected endpoints throughout the day. That’s a supreme challenge, and also translates into a major revenue stream opportunity for the Energy Cloud ecosystem.”

For more on this topic, register for Navigant Research’s next webinar, Stacking Value with VPPs in Today’s Digital Power Grid, on August 15. Asmus, along with Enbala’s Bud Vos and ABB’s Rick Nicholson, will provide a comprehensive look at VPPs and how they are transforming the digital grid.

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