A New Generation of Virtual Power Plants is Set to Transform the Energy Sector

15 October 2014
Report type: White Paper
Author(s): Emil Berthelsen
Categories: New Energy Sources
Number of Pages: 0

This White Paper examines the increasing criticality of Virtual Power Plants in managing electricity production and consumption. Deployments of VPPs have been in existence for more than three decades. However, we are starting to see, in Germany, Scandinavia, and North America, a new generation of VPPs emerging in response to changes in the energy market, new enabling technologies, and a realisation that just scaling up traditional VPP approaches will not address the requirements of customers. This new generation of VPP aims to manage an interconnected market of energy devices through the intelligent application of abstracted software tools and systems.

Machina Research has identified three different models of Virtual Power Plant, which are increasingly sophisticated in terms of the capabilities:

  • Operational Control Virtual Power Plant (VPP) model
  • Functional Management Virtual Power Plant (VPP) model
  • Smart Energy Market Enabler Virtual Power Plant (VPP) model

The White Paper aims to answer the following key questions: how is the electricity energy market transforming, how are VPPs changing to meet the opportunities enabled by these transformations, and which suppliers of next-generation VPP solutions are best placed to meet the varying needs of the market? Section 1 identifies the major changes happening in the energy market that are stimulating the demand for VPPs. Section 2 looks at the three main types of VPP. Section 3 examines Machina Research’s 23 criteria for comparing different VPP providers. Section 4 provides our views on the suppliers in the market today.

This White Paper is, first and foremost, relevant to utility and grid operators but it also highlights significant opportunities for energy brokers, governmental or semi-governmental authorities, and what could loosely be termed ‘stakeholder energy communities’.

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