There are growing evidence that virtual power plants (VPPs) can deliver a number of valuable services reliably and at lower cost than the physical power plants which traditionally delivered these same or similar services. Moreover successful initial pilot projects are paving the way for larger commercial scale schemes. Everyone is testing and experimenting while deploying larger schemes with more participants.
As defined by a Rocky Mountain Institute (RMI) report
“A VPP is comprised of hundreds or thousands of households and businesses that offer the latent potential of their thermostats, electric vehicles (EVs), appliances, batteries, and solar arrays to support the grid. These devices can be flexibly charged, discharged, or managed to meet grid needs. When these devices are aggregated and coordinated, they can provide many of the same energy services – capacity, energy, ancillary services – as a traditional power plant.”
Virtual power plants better than the physical ones
Source: RMI
A VPP typically comprises of an aggregation of many components such as EVs and chargers, heat pumps, controllable home appliances, HVAC equipment with smart and controllable thermostats and batteries residing at customers’ premises in single-family homes, apartments, offices, stores, factories or industrial sites with large electricity consuming devices. As the transport sector is electrified, the list expands to include charging stations for electrified cars, trucks, buses, ferries and so on.
According to the RMI there are currently more than 500 VPP schemes of varying size and complexity in operation. It reckons that new VPPs schemes can be planned and deployed in as little as 6 months to a year.
Depending on the pressing needs of a utility or grid operator and the capability of the aggregators and partners, most current VPPs are in experimental phase and are usually focused on testing a specific pressing need or requirement, which could be shifting peak demand, or storing excess mid-day solar generation and discharging it during peak demand periods in the evening or testing the feasibility of vehicle-to-home (V2H) technology.
Portland General Electric (PGE), for example, reported that it successfully reduced electricity demand by nearly 109 MW during peak demand hours on 8 July 2024 and 100 MW on the following day.
During an unusual heat wave, PGE activated its entire portfolio of energy shifting programs, which approximately 200,000 customers participate in. The company noted that, “Advancements in technologies and electrification are creating a more dynamic electric grid and customers are able to play a more active role that has an impact on the stability of the grid, while saving money on their power bill.” PGE’s load shifting programs include
- Peak Time Rebates;
- Smart Thermostat;
- Time of Day rates; and
- EV Smart Charging.
All resulted in lowering power use on the system during peak demand and would have previously been called as demand-side management (DSM) or demand response (DR) programs. Now many such programs are counted and labeled as VPPs.
Other utilities, typically with the help of an aggregator, are experimenting with more sophisticated and targeted programs. Baltimore Gas & Electric Company (BGE), for example, is working with Sunrun, a major solar and battery installer, to test the feasibility of bidirectional electric vehicle charging and discharging.
While the initial trial was of modest scale, the scheme tested the feasibility of using the batteries of Ford F-150 Lightning electric trucks to demonstrate vehicle-to-home (V2H) technology. According to Sunrun CEO Mary Powell the goal is scale up these programs all around the country once they have been successfully implemented.
Sunrun and BGE said they “plan to explore expanding the program, offering incentives for existing F-150 Lightning owners to adopt bidirectional charging and developing direct, vehicle-to-grid capabilities so that energy from electric vehicles can be shared throughout a community.” The effort, which received funding from the US Department of Energy (DOE) runs from June to September from 5 to 9 pm on weekdays.
If you own a bi-directional Ford Lightning, you are in
Source: UtilityDive
According to Mark Case, BGE’s VP of Regulatory Policy and Strategy, “We know that the power stored in electric vehicles will be essential in our state’s effort to achieve its bold net-zero emissions goals,” adding that the aim is to understand how vehicle-to-grid programs “will support increasing grid efficiency and reliability with distributed energy resources, while providing a valuable new benefit to customers.”
Qualifying customers who own an F-150 and a Ford Charge Station Pro and Home Integration System will receive payments based on the amount of energy shared, which Sunrun estimates to be $800 over the four months of the program.
Powell said, “This exciting partnership lays the foundation for the power grid of the future where electric vehicle owners can contribute to grid resiliency and utility price stability for everyone,” noting that, “The summer heat can be especially stressful on our power grid, which is why proving the use of stored energy in electric vehicles for capacity is so important.”
Add lots of batteries and DERs to get a VPP
Source: UtilityDive
Another example was reported in One Step Off Grid on 31 Aug 2024 on a scheme offered by Nectr who is offering 50c/kWh for energy fed into the grid between 4-9 pm. Nectr an Australian retailer with around 35,000 customers is a subsidiary the South Korean solar and battery maker Hanwha Group with strong incentives to sell solar systems and batteries but also to milk them for all they are worth. It uses a smart algorithm to manage the export energy from customers’ solar and battery systems.
Launching a VPP is becoming easier with recent changes in rules from the Australian Energy Market Commission (AEMC) allowing consumer-owned resources to bid into the spot market, set prices, receive dispatch instructions and earn revenue for grid services. The AEMC says expanded opportunities for VPP market participation could result in cost savings of $834 million between 2027 and 2050.
According to AEMC chair Anna Collyer, the proposed changes “… will lead to more efficient generation use, lower system costs, and potentially reduced energy prices for all consumers. It’s a win-win that doesn’t require changing behavior, just smarter market operation.”
This article originally appeared in the September 2024 issue of EEnergy Informer, a monthly newsletter edited by Fereidoon Sioshansi who may be reached at fpsioshansi@icloud.com"