Virtual power plants

From Wikipedia:Virtual power plant

A virtual power plant (VPP) is a system for aggregating distributed energy resources (DERs) to function as a single power plant. Operators coordinate these resources to balance supply and demand, provide grid services, and participate in energy markets. 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.

VPPs typically access dispatchable and non-dispatchable resources, including microCHPs, natural gas-fired reciprocating engines, wind power plants, photovoltaics (PV), run-of-river hydroelectricity, biomass, backup generators, battery energy storage systems (BESS) such as home or vehicle batteries. VPPs can manage demand as well as supply; e.g., heat pumps and other devices can be turned on or off based on available energy supply.

Heterogeneity and numbers reduce dependence on any single resource, improving system stability.

Vehicle-to-grid allows grid-connected electric vehicles to participate.

Storage-based VPPs ramp faster than thermal generators, e.g., helping grids with high ramp needs avoid the duck curve.

A management system securely controls operations, billing, and payments to power suppliers and consumers.

VPPs provide peak shaving by delivering power during high demand, avoiding expensive peaker plants (saving 40–60%). They offer load following and ancillary services such as frequency regulation and operating reserves, responding in seconds to minutes.

VPPs can trade energy in wholesale markets, acting as dispatchable plants. Strategies hedge risks in markets:

• Info-gap decision theory (IGDT)
• Robust optimization (RO)
• Conditional value at risk (CVaR)
• First-order Stochastic Dominance (FSD)
• Second-order Stochastic Dominance (SSD)

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.

• https://www.mdpi.com/search?q=virtual+power+plant&journal=buildings&volume=13&issue=4
• https://www.nature.com/articles/s41598-022-16389-8
• Philipp Eisele, Filipa Alexandra Na Carrilho, Divya Bojja, Pedro Pelote, César Valderrama, 2024, “Readiness of demand response technology for Spanish Energy Communities,” Energy Strategy Reviews, v54, 2024, 101477, ISSN 2211-467X, https://doi.org/10.1016/j.esr.2024.101477.
• Eric D. Fournier, Felicia Federico, Robert Cudd, Stephanie Pincetl, 2023, "Building an interactive web mapping tool to support distributed energy resource planning using public participation GIS," Applied Geography, v152, 2023, 102877, ISSN 0143-6228, https://doi.org/10.1016/j.apgeog.2023.102877.
• Zhang, Jiatong, 2022, "The Concept, Project and Current Status of Virtual Power Plant: A Review," Journal of Physics: Conference Series, DOI 10.1088/1742-6596/2152/1/012059. https://iopscience.iop.org/article/10.1088/1742-6596/2152/1/012059/meta

• Australia: https://energyinnovationtoolkit.gov.au/regulatory-use-case-aggregation-distributed-energy-resources-through-virtual-power-plant
• United States: Federal Energy Regulatory Commission (FERC) Order Number 2222, dated September 2020, directs wholesale electricity market operators to enable aggregators to provide distributed energy services, which may encompass the functions of virtual power plants. See:
  • FERC Order No. 2222: Fact Sheet, available at: https://ferc.gov/media/ferc-order-no-2222-fact-sheet
  • FERC Order No. 2222 Explainer: Facilitating Participation in Electricity Markets by Distributed Energy Resources, available at: https://www.ferc.gov/ferc-order-no-2222-explainer-facilitating-participation-electricity-markets-distributed-energy
  • Zhou, Ella, David Hurlbut, and Kaifeng Xu. 2021. A Primer on FERC Order No. 2222: Insights for International Power Systems. National Renewable Energy Laboratory, NREL/ TP-5C00-80166. https://www.nrel.gov/docs/fy21osti/80166.pdf.

• IEEE search for VPP literature: https://ieeexplore.ieee.org/search/searchresult.jsp?action=search&newsearch=true&matchBoolean=true&queryText=(%22All%20Metadata%22:Virtual%20Power%20Plant)
• Kim, June, 2024, "How virtual power plants are shaping tomorrow’s energy system," MIT Technology Review [Electronic article], https://www.technologyreview.com/2024/02/07/1087836/how-virtual-power-plants-are-shaping-tomorrows-energy-system/
• Microgrids
  • NARUC/NASEO Policy Report, 2023: https://www.naruc.org/about-naruc/press-releases/new-naruc-naseo-joint-report-provides-microgrid-framework-for-public-utility-commissions-and-state-energy-offices/
  • https://www.microgridknowledge.com/distributed-energy/virtual-power-plant
• Science Direct – note several closely related KEY TERMS used!  https://www.sciencedirect.com/search?qs=%22virtual%20power%20plant%22  
• Virtual Power Plants and Energy Justice. Speetles, Brittany, Eric Lockhart, and Adam Warren. 2023. Virtual Power Plants and Energy Justice. Golden, CO: National Renewable Energy Laboratory. NREL/TP-7A40-86607. https://www.nrel.gov/docs/fy24osti/86607.pdf.
• Virtual Power Plant Partnership [trade organizatoion]. https://vp3.io/
  • Kevin Brehm, Matthew Land, Avery McEvoy, et al. 2024. Meeting Summer Peaks: The Need for Virtual Power Plants [Electronic article, July 2024]. https://rockymntstage.wpengine.com/wp-content/uploads/dlm_uploads/2024/06/VPP_reliability_brief.pdf
• U.S. Department of Energy, 2023, Pathways to Commercial Liftoff: Virtual Power Plants, [Web page retrieved March 2024]. https://liftoff.energy.gov/vpp/.
  • Full report: https://liftoff.energy.gov/wp-content/uploads/2023/09/20230911-Pathways-to-Commercial-Liftoff-Virtual-Power-Plants_update.pdf