It sounds like an oxymoron - how can something as obviously concrete and real as a power plant be virtual? And what the heck is a Virtual Power Plant (VPP) anyway?
The US Department of Energy defines VPPs as “aggregations of distributed energy resources (DERs) such as rooftop solar with behind-the-meter batteries, electric vehicles (EVs) and chargers, electric water heaters, smart buildings and their controls, and flexible commercial and industrial 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.”
VPPs use the power of scale - as we move to more homes with rooftop solar or EV chargers and so on VPPs can “[B]y shifting when participating DERs draw power, for example, VPPs can shave demand peaks and spread energy use more evenly throughout the day. If necessary, they can shed demand from some DERs, like flexible commercial and industrial loads, when the grid is especially strained. Increasingly, VPPs can call on energy sources like behind-the-meter batteries to increase electricity supply on the grid.”
“There are currently 30-60 GW of VPP capacity on the grid that have been operating with commercially available technology for years. These systems already have a range of capabilities, including time-shifting EV charging to avoid overloading local distribution systems and supplying homes with energy from onsite solar-plus-storage systems during peak hours to reduce demand on the grid.”
“Tripling the current capacity of VPPs—to 80-160 GW—by 2030 could address 10-20% of peak load and save on the order of $10B in annual grid costs” and the US Department of Energy says this increase is attainable within this time frame.
There are numerous players - large and small - popping up in the VPP sector all over the globe. Whether you are a homeowner who is interested in connecting your rooftop solar to a VPP or a renter in an apartment building wondering if you could be paying less for electricity if it was coming from a VPP doing some Googling for VPP initiatives in your region might save you money and help the climate at the same time.