26 Virtual Power Plants
A network of decentralized, medium-scale power generating units such as wind farms, solar parks and combined-heat-and-power units, as well as flexible power consumers and storage systems.
In practice, a VPP can be made up of multiple units of a single type of asset, such as a battery or a device in a demand response program, or a heterogeneous mix of assets.
These units “are dispatched through the central control room of the virtual power plant but nonetheless remain independent in their operation and ownership,” adds Next Kraftwerke.
In other words, a VPP is to a traditional power plant what a bunch of internet-connected desktop computers is to a mainframe computer. Both can perform complex computing tasks, but one makes use of the distributed IT infrastructure that’s already out there.
A key feature of VPPs is that they can aggregate flexible capacity to address peaks in electricity demand. In this respect, they can emulate or replace natural-gas-fired peakers and help address distribution network bottlenecks — but usually without the same capital outlay.
What’s the difference between a virtual power plant and a microgrid?
Microgrids (and minigrids) also often involve a mix of distributed renewables, storage, flexible demand and fossil-fuel plants. But there are important differences, as well:
VPPs are integrated into the grid. Microgrids are often off-grid, and in an on-grid setting, they are designed to be islanded so they can carry on working independently if the grid goes down.
VPPs can be assembled using assets connected to any part of the grid, whereas microgrids are usually restricted to a particular location, such as an island or a neighborhood.
The two concepts use different systems for control and operation. VPPs are managed via aggregation software, offering functions meant to mimic those of a traditional power plant control room. Microgrids rely on additional hardware-based inverters and switches for islanding, on-site power flow and power quality management.
Another difference concerns markets and regulation. VPPs are aimed at wholesale markets and do not usually require specific regulation. Microgrids, on the other hand, are more focused on end-user power supply. What’s the difference between a virtual power plant and demand response?
This one is a bit trickier, and it’s tied up with the semantics of the energy industry. The term “demand response” dates back decades to programs that enlisted factories or commercial buildings to manually shut down loads in order to combat grid emergencies. While the industry has gotten much more sophisticated in the past decade or so, it does still include those manual programs alongside more automated and flexible ones.