Illustration of a Virtual Power Plant
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"Virtual power plants represent an 'Internet of Energy'", said senior analyst Peter Asmus of Pike Research. "These systems tap existing grid networks to tailor electricity supply and demand services for a customer. VPPs maximize value for both the end user and the distribution utility using a sophisticated set of software-based systems. They are dynamic, deliver value in real time, and can react quickly to changing customer load conditions."

A virtual power plant (VPP) is a system that integrates multiple, possibly heterogeneous, power sources to provide grid power. A VPP typically sells its output to an electric utility. VPPs allow energy resources that are individually too small to be of interest to a utility to aggregate and market their power. As of 2024, VPPs operated in the United States, Europe, and Australia.

One study reported that VPPs during peak demand periods are up to 60% more cost effective than peaker plants.

Definition[edit | edit source]

U.S. Department of Energy (2023, p. 2) explains:

VPPs are aggregations of distributed energy resources (DERs) such as rooftop solar with behind-themeter (BTM) batteries, electric vehicles (EVs) and chargers, electric water heaters, smart buildings and their controls, and flexible commercial and industrial (C&I) loads that can balance electricity demand and supply and provide utility-scale and utility-grade grid services like a traditional power plant. VPPs enroll DER owners – including residential, commercial, and industrial electricity consumers – in a variety of participation models that offer rewards for contributing to efficient grid operations.

The Department of Energy (2023, p. 3) describes seven sources of value that VPPs are capable of delivering: (1) reliability and resilience; (2) versatility and flexibility in meeting energy demands; (3) affordability in meeting energy demands; (4) supporting resource adequacy and reducing the need for traditional resources otherwise needed to serve demands during times of peak usage; (5) decarbonization and air pollution reductions; (6) transmission and distribution infrastructure relief (up to and including providing non-wire solutions that can postpone or obviate the need for future grid expansions); and, (7) community empowerment in determinine what resources will be used to meet community needs.

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Authors Tom Stanton
License CC-BY-SA-4.0
Language English (en)
Related 0 subpages, 1 pages link here
Aliases Virtual Power Plants
Impact 53 page views
Created September 1, 2023 by Tom Stanton
Modified September 22, 2023 by StandardWikitext bot
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