The California Duck Curve reveals a potential costly issue for utilities and their customers. The annual peak load appears to be continuing to grow -- because it occurs after dark when there is no solar power being generated -- yet energy sales may be declining with the growth of distributed solar generation during the day. This results in the need to continue to expand the grid, but without the sales revenue to support the added capital expense, presenting a Catch-22 that utilities are struggling to overcome.
This week, we feature guest blogger Peter Asmus of Navigant Research, who talks about virtual power plants (VPPs) and their changing role in the utility industry.
The primary goal of a virtual power plant (VPP) is to achieve the greatest possible profit for asset owners—such as a resident with rooftop solar PV coupled with batteries—while maintaining the proper balance of the electricity grid at the lowest possible economic and environmental cost. The purpose is clear, but getting to this nirvana is not easy. Nevertheless, there are clear signs that the VPP market is maturing. New partnerships are pointing the way for control software platforms that can manage distributed energy resources (DER) in creative ways.
IN CASE YOU MISSED IT:
Virtual power plants or VPPs are one of the hottest topics in the energy industry today. In fact, investments in VPPs are expected to total over $68.6 billion by 2025 -- this according to Navigant Research, who has published a new white paper on the topic.
Software advancements are enabling greatly expanded capabilities in the distributed energy resources (DERs) that can be aggregated into VPPs, which are now capable of responding to the needs of the power grid at the sub-second speeds required for instantaneous grid balancing.
Titled Stacking Values with Virtual Power Plants in Today's Digital Power Grid: Moving Distributed Networked Energy Into the Mainstream, the paper was authored by Navigant's Peter Asmus and covers:
- The expansion and convergence of VPP market segments
- New distributed energy resource architectures
- Physical VPP grid and market interaction values
- ROIs on VPPs