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Virtual power plant

technology Maturity 5-7 Next article →

A virtual power plant, or VPP, is a clever way to manage electricity. Instead of using one giant building, it connects many small energy sources. These small parts are called distributed energy resources. They can be solar panels on a roof or wind turbines. They can even be batteries in electric cars. A smart computer system brings them all together. This makes many tiny sources act like one single, large power plant.

This system works by balancing supply and demand. Supply is the amount of power being made. Demand is how much power people are using at that moment. A VPP can manage both sides of this balance. It can send extra power to the grid when people need it most. This is called peak shaving. It also helps by turning devices like heat pumps off for a short time. This lowers the total demand on the grid.

People have been thinking about this idea for a long time. Shimon Awerbuch first proposed the VPP concept in 1997. At first, it was mostly just an idea on paper. New technology and different rules made it hard to build back then. In 2008, a company called RWE launched the first real VPP. It connected nine hydroelectric plants to make 8.6 MW of power. Later, the University of Kassel tested one using wind and solar.

Today, VPPs are growing very large all over the world. In the United States, capacity reached 37.5 GW by 2025. In 2023, VPPs provided about 4 to 8 percent of peak demand. In the UK, Tesla and Octopus Energy work together with many homes. In 2022, some VPPs in California supplied 68 MW of power. In Europe, companies like Enpal and Entrix are building a huge VPP. They want to reach 1 GW of power by the year 2026.

Using a VPP is often much better than using old power plants. These systems can react in just seconds or minutes. This makes them much faster than traditional thermal generators. They can also save a lot of money for the grid. Using a VPP for peak shaving can save 40 to 60 percent in costs. This helps avoid using expensive "peaker" plants that run on gas. It is a way to make our energy systems more stable and smart.

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