Virtual Power Plant Market Redefines Electricity Generation and Supply Scenario
Today’s energy landscape is evolving from a rigid, centralised system of coal, and gas plants owned by a few, to a decentralised system of diverse, clean, and distributed energy resources owned by many -in other words, the virtual power plant, or VPP (a network of independent distributed energy resources (DER) systems).
An increasingly relevant new energy management concept based on intertwining several energy sources into a single electricity flow of demand, managed through technology - the Internet of Things (IoT) is changing the course of electricity supply and demand. Blockchain technology may further accelerate the growth of virtual power plant market, and distributed resources (DR). A simple, automated Energy-as-a-Service technology solution, and IT structure that integrates different types of distributed energy sources, flexible consumers, and energy storage with each other and with other market segments in real-time through a smart grid.
The rise of virtual power plant market has ensured energy security, besides improving grid stability and reliability, assuring optimum utilisation of energy resources, lowering the load-demand response, regulating the frequency, using operational reserves, and managing peak demand. Players in the global virtual power plant market have truly taken off in the last 10 years, not just as a concept but as something that a growing number of energy companies are creating, using, and commercialising. Fairfield Market Research thus states that the global virtual power plant market is thus en route to progress.
Global Virtual Power Plant Market to Enable Better Control and Distribution
Renewables have been garnering the spotlight in the world of energy and a large number of small DERs are about to replace conventional power plants banking on a strong support that they have - the virtual power plant. The VPP not only allows to aggregate thousands of electricity producers, consumers, and storage units but utilises a cloud-based control system to perform like a single large-capacity energy source. By intelligently controlling their feed-in and consumption, their power, and flexibility can be valorised on different markets. The conventional method of electric supply that seeks last-mile connectivity to every home, office, and factory is fraught with inefficiencies. With VPP and DERs it is now possible to move power generation resources closer right to the point of consumption.
Future of Energy Distribution Resides With Solutions Offered by Virtual Power Plant Market
A network of decentralised generation sources such as wind farms, solar arrays, and combined heat and power units works in coordination with storage systems, and flexible energy consumers. While VPPs may take a variety of different forms, they all operate with one goal -to relieve demand on the grid by distributing the power generated by individual units during peak hours. They serve to provide end users with desired data to make an informed decision whilst also being able to react quickly to ever-changing loads in addition to allowing end users to manage their energy in a way that suits their needs. This enables end users to save money through the avoidance of peak tariff periods or make money through the process of energy arbitrage whilst supporting the wider needs of the energy network. The business model is perceived as a method of increasing, and exploiting the company’s resources for preparing new products, or services for customers in order to achieve an added value in terms of the competitive advantage and improved profitability.
Virtual Power Plant Market to Create a Digital Control Room for Distributed Energy Resources
The increased penetration of renewables in the energy mix means that balancing supply and demand in real-time is becoming more of a challenge for grid operators as they more frequently face periods when there is too much generation, and too little load, or vice versa. With the rapid growth of distributed generation, most commonly from rooftop solar PVs, and on- and offshore wind turbines, balancing supply and demand becomes even more challenging. At the times of excess renewable generation, prices in the wholesale market plunge, or occasionally go negative. In an increasing number of places, some of the excess solar and/or wind generation must be curtailed - simply because there is no easy way to use it, not enough transmission capacity is available to transport and/or store to be used later.
Virtual Power Plant Market Represents a Networked Marketplace
The advantages regarding virtual plants are undeniable as the energy can be produced at a more affordable price in localised areas while decreasing environmental impact, reducing network failure due to demand peaks, and providing customers with more flexibility. They can replace those power plants running on fossil fuels. They can also make grids more resilient to disasters dues to climate change, like hurricanes, and wildfires, distribute energy generation over a wider area so that it is not as vulnerable to a localised calamity, enhancing power generation, as well as trading or selling power on the electricity market. However, the requirement for unprecedented levels of electrification, digitisation, and interconnectivity is still a challenge for many in the industry. Robust cybersecurity protocols are also imperative to safely, and securely meet the future energy needs in the wake of the Colonial Pipeline cyber-attack.
Nonetheless, the global virtual power plant market is expected to continue growing quickly, supported by the consistently falling costs of renewables. Across North America, Europe, and Asia, the market looks attractive as the use of renewables expands. Goal 7 of the Sustainable Development Goals of the UN (SDGs) aims for ensuring everyone has an access to affordable, reliable, and modern energy services by the year 2030. To expand energy access, it is crucial to enhance energy efficiency, and invest in renewable energy. In Europe, many programmes are looking for a way to increase distributed network supply capacity in their respective markets, and companies are beginning to participate in viability strategies to reduce the conventional system’s onus. South Australia has the world’s largest VPP with a network of 50,000 solar, and Tesla Powerwall home battery systems - all working together as a single power plant.
Recent Key Developments in Global Virtual Power Plant Market
Global Virtual Power Plant Market: Key Players
Portland General Electric, Green Mountain Power, Swell Energy, AceOn Group, Amp Energy, Ampard, AutoGrid, EnBW, Encorp, energy & meteo systems, Enel X, Geli, Greensmith Energy, Gridwiz, Leap, Limejump, Moixa, Nebras Power, Next Kraftwerke, OhmConnect, Piclo, Powerstar, Siemens AG, Generac Power Systems, Inc., Sonnen, Stem, Sunverge, SwitchDin, Sympower, Tesla Inc., Toshiba Energy, and Wärtsilä constitute some of the most prominent players in the global virtual power plant market. In July 2020, Portland General Electric Company (PGE) announced its plans to run a pilot programme to incentivise the installation, and connection of 525 residential energy storage batteries to form a 4MW virtual power plant.
Global Virtual Power Plants Market is Segmented as Below:
By End User
Key Elements Included In The Study: Global Virtual Power Plant Market
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