WHAT IS A VIRTUAL POWER PLANT?
Virtual Power Plants are formed when a set of decentralised units in a power network are linked and operated by a single, centralised control system. Any decentralised unit that stores, produces or consumes electricity can become a part of a Virtual Power Plant. Sources of energy for a Virtual Power Plant can be derived from power producing units such as solar, wind, hydro, CHP and biogas; as well as power storage units, power consumers or power-to-x plants such as power-to-heat and power-to-gas. When joined into a Virtual Power Plant, the power and flexibility of the combined assets can be traded collectively. This allows small units to be given access to markets such as the balancing reserve, that they would not be able to enter independently.
The central control system in a Virtual Power Plant uses a special algorithm to adjust balancing reserve commands from the transmission system operators and grid conditions, making it similar to a conventional power plant. Virtual Power Plants can react quickly and efficiently when it comes to trading electricity by adjusting plant operations according to price signals from the power exchanges.