The Rise of Virtual Power Plants

June 26, 2020

Last week, Southern California Edison chose to lead by example in agreeing to partner with a private company to develop and pilot one of the first Virtual Power Plants (VPP) of the region.

As mentioned in Solar Power World, "Beginning this month and continuing through mid-2021, SCE will network up to 300 solar plus battery storage systems across Southern California to demonstrate how clean energy stored in rechargeable solar battery systems can provide the peaking capacity to the electrical grid for Southern California residents.

The virtual power plant will provide a resilient, clean source of energy at times when electricity is needed most, when there is high demand for energy. Families with rechargeable solar battery systems will also have access to reliable backup power to keep their lights on and food fresh during outage events.

Homeowners will earn an incentive for participating in the program, and Sunrun will generate revenue by managing and dispatching the networked home solar and battery-stored energy to the grid when SCE calls an event to meet local grid operational requirements.

'As we continue to decarbonize the power grid it is essential that we find innovative solutions enabling clean, affordable and reliable service,' said Jill Anderson, senior VP of customer service, SCE. 'The Virtual Power Plant will help us understand how home battery systems can perform similar to single large capacity energy sources to benefit all customers.'

The clean energy produced from rooftop solar panels are stored in rechargeable solar battery throughout the day. If there is an outage, the battery provides backup electricity to the customer’s home and enables them to power through the event 24/7, with the battery recharging every time the sun comes up.

Customers have the choice to back up everything from their entire home to simply essential appliances, depending on the type and number of batteries they choose. The virtual power plant will only make use of this battery capacity on the grid when the customer is not relying on it for backup."

The idea of VPPs is not new. Utility managers have known the need for a decentralized grid network for years and has often been used in conjunction with the notion of smart grids. With the increasing need for grid flexibility, VPPs have taken center stage. The aggregated network of distributed energy resources, controlled by software able to understand the various points of generation and consumption, as well as communicate with the overall utility network, is what Virtual Power Plants are comprised of.

Our previous utility infrastructure relied on a one-way flow of energy. The power plants generated electricity, it was distributed and transmitted to the end user, and the energy was then consumed. There was no energy being generated by the consumer, no energy being stored by the consumer, and no way for appliances to communicate with the utility. With the proliferation of smart meter technology, solar, fuel cells, energy storage, and smart devices, our grid no longer needs to rely entirely on large-scale power plants to over-generate. When Distributed Energy Resource Management Systems (DERMS) connect these unique points of generation storage and consumption together strategically into a VPP, we create redundancy, complexity, resiliency, and efficiency.

As seen in the video above, DERMS that enable VPPs create unique opportunities for the grid. Unlike traditional solar net metering, DERMs, also known as Microgrid Controller technology, allow energy to be provided and stored for the grid at times beneficial to overall grid stability, leading to better financial scenarios. As discussed by Microgrid Knowledge, this concept can be defined as transactive energy, or “the ability to control the electrical grid, the flow of power in the electrical grid using economic or market-based constructs,” as defined by Kay Aikin, CEO and co-founder of Dynamic Grid, an affiliate of Introspective Systems. "DER operators are able to tap into new revenue streams by selling services to the grid; the grid gains greater stablization from the services. Employing transactive energy helps with two major challenges to microgrid development: capital and operating costs. One way we can actually make microgrids lower their operations cost and increase value streams is use this idea of transactive energy, and that is making loads integrate into the microgrid and actually contribute to the operation of the grid,” she said.

Other DERMS, such as ANM Strata of Smarter Grid Solutions, have shown promising potential for the continued development of VPPs internationally, including successes working with Tuscon Electric Power, UK Power Networks, Western Power Distribution, Con Edison, Northern Powergrid, SDGE, and more. Seen on the Smarter Grid Solutions website, "ANM Strata is our highly flexible and scalable multi-use case DERMS software platform. Our unique approach to DERMS, using Active Network Management (ANM) technology for continuously executing sub-second decisions, combines different control methods in one comprehensive platform. This combination of control methods means that ANM Strata can monitor and control any size and type of DER, in any location, connected with any communications, interfaced to grids and markets, and manage them across any time horizon. ANM Strata allows individual assets or groups of assets to be addressed using a variety of protocols allowing it to scale to millions of devices."

As seen from the video above, with the advancing technology in electric and hydrogen vehicles, the automotive industry adds another potential resource to the VPP paradigm. Vehicles of the future can be designed to charge, and potentially discharge, energy at times when the utilities deem it beneficial. This creates grid flexibility, stability, and resiliency.

The team at Instant ON is excited to work with its partner organizations so to advance the development of VPPs throughout California, Hawaii, and beyond. As success stories for VPPs and Microgrids proliferate, we build the framework for the grid of the future. Clean, affordable, and equitable energy can be made a reality for all. Virtual Power Plant pilot projects will pave the path for prosperity!

Published by David Perzynski, 6/26/2020

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