Virtual power plants and their role in the DER Model
Photo Source: South Australian Government
- February 11, 2019
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Virtual power plants are an increasingly common topic when it comes to overall efficiency of a grid system, and they warrant some careful thought and planning. The benefits they could offer both existing grids when factored in and even moreso for nascent grid systems in industrializing or remote areas that can build a well-planned grid for the future from the ground up are worth exploring.
When virtual power plants are discussed, what we're typically talking about is what can be defined as "a network of decentralized, medium-scale power generating units such as Combined Heat and Power (CHP) units, wind farms and solar parks as well as flexible power consumers and batteries. The interconnected units are dispatched through the central control room of the Virtual Power Plant but nonetheless remain independent in their operation and ownership. The objective of a Virtual Power Plant is to relieve the load on the grid by smartly distributing the power generated by the individual units during periods of peak load."
Put more simply, virtual power plants are systems of distributed energy resources (DERs) that connect to a central nervous system to help smooth out the supply/demand across that network. Rather than individual renewable installations on buildings that operate independently or large generating plants that create all the power needed and distribute it across the grid, virtual power plants are more flexible, quickly-responsive, modular, data-backed, and adjustable according to maintenance needs/weather conditions/market conditions.
This digitization and centralization of energy generation and distribution mirrors the blockchain process of decentralizing finance, while also having actual blockchain be one of the solutions to tracking and distributing energy properly across a virtual power plants.
Some of the interesting stories that have come up in the recent weeks regarding virtual power plants include:
- Electric Company in Australia launching a $15 million program to help charities slash power bills by installing free solar/battery systems and turning them into a part of a virtual power plant
- Sunrun winning a contract in New England Capacity Auction worth 20 MW in what some see is proof of concept for virtual power plants becoming a tangible part of the grid system
- South Australia conducting a large virtual power plant project involving 50,000 Tesla Powerwalls and making available $50 million in funds for a Grid Scale Storage Fund to assist large projects.
What's your take on the virtual power plant model-- exciting new direction for the utility model or overblown and under-delivered?