• What is a VPP?

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.

vpp-diagram-SSG-01

A SET OF DECENTRALISED UNITS CREATING COLLECTIVE INTELLIGENCE

A Virtual Power Plant is a set of small-scale installations that consume or produce electricity. Generally, smaller, individual plants cannot offer services such as balancing reserve or be flexible on the power exchanges as they do not meet the minimum bid size of the markets or their production and consumption profile varies so strongly that they have insufficient availability due to unforeseen outages. In addition, there are strict requirements regarding the availability and reliability of the flexibility offered in the market. Virtual Power Plants work together to overcome these barriers. The combination of flexible production and consumption units, controlled by a central intelligent system, is the core idea behind a Virtual Power Plant. This is how Virtual Power Plants provide the same service and trade on the same markets as large central power plants or industrial consumers.

HOW VIRTUAL POWER PLANTS BRING FLEXIBILITY INTO POWER MARKETS

The strength a Virtual Power Plant brings is the flexibility that allows for a quick and versatile ability to balance the grid, differentiating it from conventional power plants. Virtual Power Plants react to the constant daily changes of electricity price exchanges, quickly adapting to the existing supply of power in the grid, executing trades.

POWER CONSUMERS IN VIRTUAL POWER PLANTS

Data collected from Virtual Power Plants can help consumers profit from price signals coming from the power exchanges. They can limit their energy consumption to times when electricity is readily available and cheap on the market thus reducing their power costs.

If desired, this consumption optimisation can be fully automated by the Virtual Power Plant. The Virtual Power Plant’s control system sends commands to the company’s control room, fulfilling the individual’s restrictions and only intervening if needed.

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