The Role of Virtual Power Plants in a Decentralized Power Grid
Source: Aaron Larson · POWER MAG · | August 3, 2020
Virtual power plants are becoming a driving force in the power sector. This article explains how they enable utilities and aggregators to pool production from multiple plants and distributed sources, achieving the flexibility and scale needed to take part and trade in the electricity market.
A large variety of resources can be incorporated into a virtual power plant (VPP). The interconnected units can then be dispatched using special software and traded intelligently on the energy market. Courtesy: ABB
The energy landscape is changing. Megatrends are disrupting the energy and industrial situation worldwide. Greater urbanization, a drive for decarbonization, and the growing influence of digitalization are changing the way industrial goods are produced around the world, as well as how people are consuming and producing energy.
This, in turn, is driving a power grid transformation. It’s changing how electricity is being generated, transported, and consumed. The move from a traditional grid to the new smart, decentralized grid with bi-directional energy and information flow has accelerated in the past couple of years due to technological innovations, cost reductions, new business models, and enabling policies.
However, one of the most significant factors driving change is the global move toward renewable and distributed power generation, which is severely disrupting the energy landscape. As the world moves further into the energy transition on the path to a low-carbon future, smaller and decentralized power generation units will dominate the market.
The result is a complex operational environment where generation is shifting from bulk, centrally controlled power plants to distributed and weather-dependent sources. The priority now for grid operators is to control and optimize those systems reliably and profitably. However, there is an advantage in looking beyond the basic requirements, as the changes in the energy landscape present a compelling opportunity to leverage the full benefits of digitalization.
Clean power generation like wind, solar, and hydro is cost-effective, and the penetration into the electricity generation landscape is growing. Building and connecting this renewable infrastructure is not on its own enough to replace fossil fuels while maintaining the current standard of on-demand and reliable power. Managing the grid has become such a complex operation that more and more digitalization is necessary, and finally, autonomous systems will take over. But the picture is much broader. The demand and consumption of energy has also changed remarkably.