What is a Virtual Power Plant (VPP)?
Imagine that anybody could coordinate, from their own computer screen at any given office, the energy provided by wind turbines, solar panels, biomass plants and conventional sources in their area with the help of a management software. Well, you don´t have to imagine this anymore, as it has become a reality.
We are talking about a Virtual Power Plant, an increasingly relevant new energy management concept, based on intertwining several energy sources into a single electricity flow of demand, managed through technology and, once again, the Internet of Things.
The world’s energy supply comes, mostly, from conventional sources, depleting oil reserves which, according to forecasts by the International Energy Agency, could last for just half a century more. With such an alarming fact like this in mind, it seems mandatory that both governments and corporations work on some kind of countdown to improve energy management systems, in order to allow them to be more efficient and to offer better and expanded services. That is where Virtual power Plants or VPPs fit in. Let´s see what they’re about.
“Virtual Power Plants, know how works this new way of managing energy”
How does a Virtual Power Plant work?
For some time now, energy micro-generation or micro-networking is being discussed, that is, households or buildings capable of producing not only their own energy requirements through renewable resources, but also storing and sharing them; in other words, the notion of the prosumer, a mixture of energy consumer and producer, makes an appearance into the playing field.
But, for this micro-generation process to be able to work like conventional energy sources, all these small “renewable energy plants” should be managed from a single place, thus giving the impression of functioning like a single one… In this context, the concept of Virtual Power Plant emerges: a group of energy generating installations managed by a single control system or software.
The aim of VPPs is to be able to manage the customers’ energy demand collectively and tackle potential network failures. A VPP consists essentially of a remote software which helps to regulate particular energy consumption by connecting, coordinating and monitoring decentralized, storage and controlled charge energy generators. In other words, VPPs allow to cluster residential and commercial or industrial energy sources, and manage them collectively within a specific price range or under distributed energy strategies.
This segmentation by type, location, needs, cost and other variables provides customers with great flexibility, since it entails more efficient forecasts and improves operative decision taking. A VPP, eventually, may act as a single, controlled entity in the market thanks to the wide large-and-small power generator and customer portfolio it manages, and the storage options allowed by its system.
There are many challenges ahead, but the advantages regarding virtual plants are undeniable, since energy can be produced at a more affordable price in localized areas, while decreasing environmental impact, reducing network failure due to demand peaks, and providing customers with more flexibility.
In Europe, many programmes are looking for a way to increase distributed network supply capacity in their respective markets, and companies are beginning to participate in viability strategies in order to reduce conventional system’s onus.
Meanwhile, Australia’s main renewable energy funding agency is putting into operation a project by AGL Energy in order to explore the feasibility of a virtual power plant implementation strategy all over the country. This system, the most ambitious to date, could serve as a blueprint for many other countries in the field of energy management and marketing through virtual plants.