As utilities and communities look for cost effective and low-carbon solutions to meet increasing demand for electricity, many are integrating renewable energy sources into the power grid by creating virtual power plants (VPP). A virtual power plant uses software to aggregate and control the electricity that’s generated by multiple distributed energy resources (DER). These DERs are typically solar panels, battery energy storage systems and other renewable energy resources owned by businesses and homeowners.
Read on to learn more about how a VPP works and the benefits it offers to your customers and the community.
What is a virtual power plant?
A VPP can control tens or even thousands of DERs from multiple locations across a community, creating a single dispatchable power source. As a result, the control software can call on those resources to collectively deliver the energy the power grid needs to maintain stability during times of peak demand, just like it would with a traditional power plant.
A VPP might include solar panels and energy storage systems installed at two different local factories, as well as 15 electric vehicle charging stations located at a city municipal building. It might also include dozens of residential solar plus storage systems from across multiple neighborhoods. The key is the software that allows the VPP operator to purchase some of the extra power generated by those connected resources when it’s needed.
The benefits of participating in a VPP
Businesses can reap many benefits from participating in a VPP. Here are just a few.
Financial: The VPP operator will purchase excess energy your customer’s system generates to satisfy demand short falls, earning them money. Plus, when their system isn’t being called on to support the power grid, they’ll benefit from lower energy costs thanks to their onsite renewable and battery energy storage systems. Such systems can provide a significant portion of their energy needs, especially during peak hours when rates may be higher.
Sustainability: VPP participation can also help customers meet their sustainability goals. Simply put, installing and using renewable energy will reduce their organization’s emissions. When those renewable resources are part of a VPP, they’re also helping to decarbonize the power grid. Not only does this improve the air quality for their employees, but it will make the entire community healthier and safer.
Community: VPPs also benefit the community in which their business operates. VPPs make the power grid more reliable and stable, even when demand for energy spikes during extreme weather events. Energy from a VPP can be quickly deployed to help meet those unexpected demands in a way that traditional power plants cannot. If your customers are part of a VPP, the power from their onsite renewable energy resources could be used to power critical facilities and save lives during a disaster.
Cost savings, improved sustainability and increased power reliability — maybe it’s time for your customers to consider the benefits of virtual power plants.