Virtual power plants (VPPs) are increasingly challenging the dominance of traditional large-scale centralized electricity generation. A VPP is defined as a collection of distributed energy resources (DERs) that are aggregated through cloud computing and control for the purpose of providing enhanced power generation and availability. The DERs are often heterogeneous and can include wind power, solar power, biomass, small-scale hydro, energy storage systems, and so on. Various architectures of VPPs are being launched around the world.
The first article in this FAQ series considered “Nano grids, microgrids and the decentralization of the electric grid.” So, what’s the difference between a nano grid or microgrid and a VPP? All three can include a mix of DERs, but there are important differences:
- Nano grids and microgrids are designed to be off-grid and when attached to the grid, they are designed to operate as independent “islands” should the grid go down. VPPs are integrated into the grid and are designed to function in coordination with the grid.
- VPPs are often spread across large geographic regions. Nano grids and microgrids are restricted to specific locations such as a single building or a campus.
- VPPs are software-based and use control functions designed to imitate a traditional power generation plant. Nano grids and microgrids are hardware-based and use inverters and switches to control power within the local network and to control the connection of the local network with the utility grid.
- Nano grids and microgrids are focused on individual end users while VPPs are focused on participation in wholesale markets.
Using DERs from different owners to form a VPP
Next Kraftwerke operates one of Europe’s largest VPPs. From a central control platform, the company connects power-producing assets from renewable sources such as biogas, wind, and solar with commercial and industrial power consumers and power-storage systems. The resulting tight-knit network benefits everyone involved and the power grid as a whole.
Electricity does not have a fixed price. On the power exchanges, the trading price changes up to 96 times per day. The aggregated network of resources in a VPP (often under many different owners) can participate in the power exchanges and take advantage of the price fluctuation. They only produce or consume power at times when it makes the most economic sense, with all necessary information for finding the best price automatically.
And when power supply relies on weather-dependent sources such as solar and wind, the system must be able to reliably accommodate fluctuation. A VPP can move power production between various solar farms, wind farms, and other DERs over wide geographic areas providing guaranteed power delivery and lower costs for consumers and higher profits for power producers.
VPP with 3,000 solar homes + energy storage
Wasatch Energy Group and sonnen recently committed to deploy a series of residential VPP projects in California. The Wasatch California VPP Fleet I and II will outfit some 3,000 residential apartment homes with solar generation and sonnen intelligent battery energy storage. In aggregate, the project is set to become the largest apartment-community-based VPP fleet in the world upon its 2021 completion. The project will include over 60 MWh of energy storage capacity and over 24 MW of power capacity.
In total, the Wasatch California VPP Fleet I and II will include seven Wasatch Premier Communities, located throughout the state of California. The first solar-and-storage retrofit work began in September 2020 at the 417-unit Heron Pointe apartment community in Fresno.
The Wasatch California VPP fleets will all feature sonnen ecoLinx intelligent battery storage systems. Individual sonnen systems within each community will be capable of communicating with each other as a single intelligent battery asset, harmonizing and optimizing the community’s solar production, grid usage, and individual apartment loads. The VPP projects are also built for participation in the California demand response market and other grid services. The VPP fleets will ensure resiliency for every resident of the community by providing access to the onsite solar energy and batteries, which act as constantly-regenerating, clean, and reliable energy supply.
VPPs and EVs
As new forms of DERs are developed, such as electric vehicles (EVs), they are being integrated into VPPs. For example, Sumitomo Electric Industries, Ltd. (SEI) has conducted a VPP pilot program jointly with Nissan Motor Co., Ltd., GS Yuasa, and Kansai Electric Power Co., Inc. (KEPCO). In this project, 60 EVs parked at home and at KEPCO were linked to the VPP demonstration system, which simultaneously controls vehicle battery charge. This system is expected to enable the effective use of renewable energy, mitigating its output fluctuation. And through the adjustment of power supply and demand, it is expected to add value to EVs.
To utilize the energy devices owned by electricity users as a VPP, a server that manages and controls these devices in an integrated manner is necessary. In the SEI system, the energy devices are EV batteries and they are managed by a centralized “EV server.” The EV server submits a charging mode control signal to individual households based on the VPP order received from the VPP server at KEPCO, which controls the overall balance of electricity supply and demand.
SEI also developed an EV switch and a network device (gateway) to remotely control the charging mode of the EVs. The system connects with EV owners via their smartphones to confirm or deny individual participation in real time, ensuring that owners maintain control over the availability of their vehicles. This demonstration only controlled charging of the EVs to reduce the load on the grid. In the future, the EVs will also be used as a distributed storage system to supply energy to the grid during periods of peak demand.
VPP software as a service – power in the cloud
NEMOCS from Next Kraftwerke is a modular software as a service solution (SaaS) that enables users to connect, monitor, and control distributed power producers, consumers, and storage systems. Thereby, it offers a wide range of business fields to DER portfolio operators, aggregators, utilities, grid operators and energy traders. The NEMOCS VPP software can support a variety of business cases:
- Energy trading: With NEMOCS, users can bundle a great amount of different energy sources and thus achieve the necessary size to participate in power and balancing energy markets. Thanks to the live data transmitted from each technical unit to the VPP, users are perfectly equipped for trading renewable energies.
- Dispatch: Use NEMOCS as a dispatching software for scheduling flexible assets based on current market prices. A price-oriented steering can significantly increase the revenues.
- Balancing services: NEMOCS enables users to increase or reduce the electricity production of steerable assets at short notice. Thus, they can ensure grid stability and achieve additional revenues on the balancing energy markets.
- Curtailment: In case of negative electricity prices or imbalances in a portfolio, the owner can shut down plants within seconds via the control system of the VPP.
- Load management & demand response: Commercial and industrial consumers can also be aggregated and controlled via the VPP. This enables users to control electricity consumption based on price signals from the power markets, offer balancing services or control flexible loads.
VPPs are challenging the traditional centralized power generation models of electric utilities. In response, utilities are using big data analytics to support advanced smart grid technologies and software defined grids. “Smart grids, software defined grids and big data” will be the focus on the third and final FAQ in this series.
Virtual power plant, Wikipedia
Virtual Power Plants Using Electric Vehicle and Plug-in Hybrid Vehicle Batteries, Sumitomo Electric Industries
VPP Software as a Service, Next Kraftwerke
Wasatch Energy Group and sonnen Launch Landmark New Virtual Power Plant Projects in California, sonnen