Discover the Promise of Virtual Power Plants
Download our eBook to find out how VPPs contribute to grid stability while improving your bottom line – and how opportunities for VPPs will continue to increase.
With the provisions of the Smart Grid Grants Program in the Bipartisan Infrastructure Law, the opportunities for virtual power plants (VPPs) could soon grow. For organizations, participating in a VPP allows them to earn new revenue through distributed energy resources like demand response and solar. Find out how your organization can find the right energy partner and benefit from this program.
By Steffi Klawiter
Steffi is a Senior Product Manager at Enel. She is responsible for understanding the VPP market and how Enel’s software services can be enhanced to serve organizations of all sizes and technologies, allowing them to earn revenue by assisting the grid to balance electricity supply and demand in real-time.
Distributed energy resources (DERs) – or energy resources located on an organization’s premises – are quickly growing more popular. Guidehouse Insights is estimating that by 2030, decentralized generation will total more than 500 GW of capacity, while centralized generation will total about 280 GW.
There are a variety of reasons behind this growth. Commercial and industrial energy consumers may use DERs to improve their sustainability and gain more control over their energy usage. Benefits also extend to include greater energy flexibility and resilience.
With DERs’ growth come both unique challenges and opportunities. As they become a larger part of the energy mix, there will be greater operational challenges as DERs can cause significant grid demand fluctuations when end users switch between on-site and grid consumption. This is exacerbated in many instances where the grid operators don’t have visibility into these smaller DERs and therefore have greater difficulty planning around them to ensure continuous grid supply and demand balance.
It comes as no surprise that there’s a growing need to better orchestrate these decentralized assets to maximize their value for both energy end users and grid operators. Enter virtual power plants – VPPs for short.
A virtual power plant (VPP) is a decentralized portfolio of DERs and other assets that can be aggregated and operated as a larger scale asset in response to external factors – such as requests from grid operators or price signals like time-of-use rates. While VPPs are not a new solution, they are becoming increasingly necessary to ensure better communication and coordination of DERs. And they’ve also become more viable from a regulatory perspective, with advancements made to allow DERs to tap into wholesale energy markets.
In the LPO’s inaugural blog series on VPPs, Jigar Shah, Director of the LPO, wrote that “virtual power plants can catalyze DER deployment at scale and help make affordable, resilient, and clean energy accessible to all Americans.” And now, with new funding in the Bipartisan Infrastructure Law, there is renewed optimism about how VPPs can scale, delivering affordable power and supporting grid reliability in an increasingly electrified world.