Why Virtual Power Plants are the Key to Grid Evolution
The ways in which virtual power plants (VPPs) are being utilized in the utility industry are rapidly evolving, and will likely continue to do so thanks to the increased emphasis being placed on renewable energy and battery storage technology.
How Virtual Power Plants are Becoming More Useful
A VPP generally consists of a cloud-based software platform that connects a network of distributed energy resources (DERs) together, which allows the generated electricity to be transmitted to customers as well as the local utility. This promotes source diversity, which helps improve overall grid reliability.
This 2-way distribution capability is becoming increasingly necessary as more and more DERs come online, a trend that is in part driven by improvements in the viability of battery technology that allow customers to store their self-generated electricity for future use or to sell back to the utility. Both of these factors are essential, and battery storage in particular is driving the growth of DERs because it eliminates the biggest problem with renewable energy generation – weather inconsistency.
In the past, power was distributed one way only – from the utility to the customer – but now this model is becoming antiquated. This is why virtual power plants are essential; however, they do introduce an additional layer of risk due to their vulnerability to system-hacking. Once VPP cybersecurity techniques evolve to better protect the connected assets, the sky will be the limit.
Companies like Tesla, Auto Grid, and SunRun are already helping drive the evolution of VPPs. In addition, more and more residential building complexes are being developed with VPPs in mind.
Overall, this is a trend worth monitoring, and I, for one, am excited about the possibilities. Anything that can provide a boost to reliability is a win in my book, and it sure seems like the stars are aligned to make virtual power plants an increasingly important element of electricity generation in the years and decades to come.
