The network of tomorrow: how virtual power plants can revolutionize urban energy

The face of the energy sector is changing rapidly. Data published by the U.S. Energy Information Administration (EIA) shows that just 19.5% of our energy currently comes from coal and 21.5% from renewable sources such as hydro, solar and wind.

However, coping with these changes means we need to rethink how the network works. This is especially important today, as the rise of renewable energy means traditional energy operators may fall by the wayside and citizens may finally get the chance to power their own homes with solar panels.

While this will certainly pose a challenge, one area where energy engineers can find help is virtual power plants (VPPs).

What are VPPs?

According to the U.S. Department of Energy, virtual power plants are “an interconnected concentration of distributed energy resources (DER) technologies.” In short, this means that VPPs bring together all the different energy sources that currently power our energy grid. They offer greater integration of renewable energy sources and are more flexible than physical power plants.

These VPPs will play a key role in securing our energy in the future, as they can effectively connect all small energy sources such as individual solar panels and batteries. People who agree to use their power on the grid can sell it to utilities, which could reduce peak demand by as much as 60 gigawatts by 2030 by displacing centralized generation.

Companies are already lining up to provide VPP to consumers as well. Solar energy companies including Sunrun Inc. and SunPower Corp, already have VPPs in urban areas such as California, Hawaii and New England. The VPP model is also used in Australia, Japan and some European countries, which could potentially help usher in a new era of energy supply and help homeowners minimize their electricity bills.

Benefits of VPP

People who connect their solar panels and batteries to a VPP can sell electricity to the grid and reduce their energy bills. However, the benefits of VPP go far beyond energy loans for individuals. VPPs offer wide-ranging benefits, including:

• Better decarbonization and less dependence on non-renewable raw materials;
• Increased efficiency thanks to better integration of renewable sources;
• Greater flexibility on the demand side, resulting in reduced bills and improved resilience.

The VPP emergency may also convince more companies to purchase solar panels for their premises. The increased flexibility and affordability of VPPs can help companies address climate-driven continuity challenges, such as power outages and natural disasters that impact power generation at physical power plants. Companies that invest in VPP can even take advantage of reliable scenario building tools to better estimate the impact of a climate-induced outage and begin developing appropriate response plans, potentially identifying vulnerabilities before a disaster occurs.

In the case of VPP, the transition to on-site renewable energy generation is also of great operational importance. They allow companies that can generate their own energy to minimize overhead costs while securing electricity for their buildings. This strengthens the case for renewables and can improve grid resilience.

Resistant nets

Renewable energy provides greater resilience compared to non-renewable energy. This is good news for consumers, who will be insulated from problems such as global conflicts that previously caused the price of energy sources such as oil to skyrocket. Fortunately, it is possible to solve the renewable energy problem by updating our infrastructure to include more VPPs, which is crucial to the future of renewable energy supply. Some of the challenges facing renewable energy include:

• Intermittent delivery: Systems such as wind and solar energy depend on the weather to generate enough electricity. Persistent periods of cloudy and windless days in urban areas are therefore detrimental to the network and weaken supplies.
• Overload: If solar panels and wind turbines capture too much energy, there is a risk of overload. This means that controllers may have difficulty managing the frequency and voltage in the system.
• Balancing supply and demand: Energy demand and sustainable energy production do not always go hand in hand. For example, energy demand often peaks in the morning, when most city dwellers are heating their homes and getting ready for the day. However, during the winter months, many solar panels have not yet started generating energy.

VPPs can overcome supply problems and alleviate challenges caused by congestion. These VPPs can be further enhanced with network improvement technologies. VPPs that remotely manage and monitor power surges and shortages can direct the flow of energy where it is needed most and ensure that urban areas are adequately supplied by homes and turbines that received enough wind and sunlight that day.

Integration of renewable energy sources

As climate change looms, policymakers are increasing investment in renewable energy sources. But finding a way to connect massive solar farms with supplies generated by individual homes in urban areas is a challenge. Not only are urban homes far from solar farms, but they are likely to provide varying levels of supply depending on their location and ability to capture solar energy.

No one is quite sure how VPPs will change the network, but we can be fairly certain that the Internet of Things (IoT) will play a role in it. For example, smart thermometers can pre-cool homes on hot summer days. This reduces the demand required later when temperatures rise rapidly. Homes connected to VPP can also change heating/cooling schedules, meaning the network won’t experience extreme spikes that threaten supply.

AI can also facilitate greater integration of VPPs and renewables. AI programs are able to predict energy demand based on variables such as weather and current events, which means our networks are more responsive to changing demand. It also simplifies energy supply, which is crucial if we want city dwellers to benefit from clean energy initiatives such as heat pumps and electric vehicles.

Overall, VPPs benefit in many ways, offering more flexible energy and rewarding people and companies who install solar panels on their municipal buildings. In the coming years, they could also become key assets in efforts to secure future renewable energy sources. If used correctly, VPPs have the potential to better manage supply and ensure demand is met even during peak hours. This is becoming increasingly important as we seem to face new challenges in the fight against extreme heat and must adapt to reduce emissions while staying cool.

Amanda Winstead is a freelance science and technology writer. You can follow her work online on her website.