Virtual Power Plant Solar Aftercare. Our story. Virtual Power Plants Explained. ShineHub Virtual Power Plants Explained A VPP is a collection of home solar batteries that can provide on-demand battery power to support the electricity grid in times of need. Get paid premium rates or the excess battery power you feed back to the grid. Keep reading. Back To All Blogs. Start your journey with solar that works. Shop solar online. Book a call. Solar Products. Solar blog.
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State Please select your state. Get A Quote. Transmission System Operators have huge deltas. Trading limps behind and is punished by expensive balancing costs for ex post portfolio corrections. Why does this happen?
There may not be the same historical data to rely on yet. So the utility turns to the technology of a Virtual Power Plant to get a grasp on things: All renewable energy sources RES in the portfolio of that utility are networked through remote control units, so that the aggregated volume of power generation from all distributed plants is displayed live, and all or individual PV and wind farms can be curtailed from the trading floor.
Furthermore, historic data is either added to the system by importing it from DSO-metered data or starts building itself once all plants are sending their infeed. Now you add some meteorological forecast data and put the whole dough through statistical analysis and machine learning algorithms to gain the best possible forecast of the entire renewable portfolio. Where is the money in that, you may ask? Secondly, the portfolio manager or the trader can now curtail the RES portfolio as soon as prices fall below zero.
Thirdly, in case the RES portfolio contains some sort of bioenergy or hydropower — or other dispatchable renewable energies like geothermal etc. This way, he is now able to beat average prices on short-term markets and share the additional revenues with the plant operator. Lastly, by understanding the own RES portfolio better, the trader also learns more about the whole market situation and where spot market prices will be heading, since PV and wind infeed tend to become the price drivers in energy markets with higher shares of renewables.
The trader then uses that information to take up not only a safer but also potentially more lucrative trading position. But what about the actual physical fluctuations that the trader now knows more and earlier about than before but which nevertheless of course occur and which need to be physically balanced within the grid? First of all, more lead time due to improved forecasts already enables the entire market — other traders and dispatchers — to react more quickly to fluctuations and thus to counter them before they cause pain in the system.
But more importantly, a VPP not only networks renewables to improve forecasting but also to provide ancillary services to the grid operator. After receiving a signal to ramp up or down power generation from the grid operator, the central control system of the VPP splits up that signal to hundreds or thousands of individual signals for the individual dispatchable renewable power plants, taking into account their restrictions on response time, filling levels, heat generation, you name it.
It then automatically sends the ramping signal to the involved networked units and ramps them up or down to support the grid frequency and to counter the very same fluctuations other units in the VPP — mostly PV and wind — have caused in the first place.
Since short-term reserves are extremely important to run the electricity system and to provide the security of supply we all enjoy every day, they have a significant price tag.
Traditionally, the VPP operator splits the revenues from successful capacity tenders and actual deliveries of ancillary services with the operators of the dispatchable RES unit that is networked in the VPP. Basically a subset of Exhibit B, an aggregator might opt to not only aggregate power generating units but also or exclusively demand side units to provide ancillary services to the grid. In some energy markets, there are even — on top of the ancillary services markets — special tender schemes for reserves that are supplied by the demand side in order to promote their development.
While the implementation of demand response aggregation is a very regional phenomenon today US, Australia and often limited to commercial and industrial power consumers, it holds gigantic potential once tiny flexibilities on the household level e.
EV batteries, heating pumps, AC units are aggregated and become more active on the energy market. Moreover, a fleet of aggregated demand response units may also be used to not only deliver ancillary services to TSOs but also to dispatch consumption of the networked units to times of low prices on spot markets — this way lowering the costs for power procurement for each asset with a share for the VPP operator.
Like every typology, this one also has its flaws. Key Takeaways Volumetric production payments VPPs are a way to convert a portion of oil or gas production into a cash flow stream for investors. The investors, or buyers of a VPP, will tend to be financial institutions or else energy companies who are guaranteeing future delivery of oil or gas. The sellers in a VPP are oilfield companies or drillers that are able to monetize their capital investment while retaining ownership of their property.
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