![]() In that way, a lot of virtual power plants are a mix of supply-side and demand-side solutions, meaning they can combine both power production and power reduction into a single project. Often, a kilowatt-hour (kWh) of electricity that you don’t use can be just as valuable–or even more valuable!–than a kWh of electricity that you produce. Could be either a supply-side or demand-side project ![]() While there certainly are hardware aspects of virtual power plants like the solar panels on your roof or batteries in your garage, a key characteristic of a virtual power plant is that it’s primarily a software solution, not a hardware solution. Virtual power plants mimic traditional power plants and physical infrastructure with software to dispatch its resources to respond to signals from the grid operator. Software solution, not a hardware solution The projects are optimized to provide grid services, whether that means power (measured in MW), supply (measured in megawatt-hours, MWh), frequency regulation, or reserve capacity. Grid-tied, not off-gridĪs opposed to microgrids, which are often optimized for being able to run off-grid in the event of an emergency, the whole point of a virtual power plant is that all of its components are connected to the grid so they can operate in markets. ![]() No two virtual power plants look alike, but there are some standard hallmarks that you can be on the lookout for with virtual power plants. When your solar (and storage!) plays a significant role in helping the grid, virtual power plants and aggregators help make sure you get compensated for that service. Access to markets: by relying on residential or commercial distributed energy users, aggregators–the people who find enough solar projects to create a virtual power plant–are able to provide more access to energy and power markets for individuals.For instance, virtual power plants can (and have!) offset the need for building new central power plants, as well as pricey transmission line or substation upgrades. Avoiding major infrastructure investments: in many cases, the need for large, grid-scale infrastructure projects and investments can be offset by aggregating distributed energy resources.Instead of having one single, major point of failure (i.e., a central power plant), expanding Resilience: by aggregating multiple, smaller projects together, virtual power plants provide added resiliency to the grid.That’s exactly what a virtual power plant achieves. In other words, if you aggregate enough of these solar (or solar-plus-storage) projects together, you can find enough kW to offset MW of power plants. Now that we also have miniature power plants distributed throughout neighborhoods, it’s possible to aggregate multiple of these distributed energy resources to play the same role as a single, central power plant, with a number of co-benefits. Where virtual power plants come into play ![]() ![]() These power plants are often quite large: compared to residential solar installations, which are normally around 10 kilowatts (kW), most central power plants are at least a few hundred megawatts (1,000 kW = 1 MW), and some are rated in gigawatts (1,000 MW = 1 GW). To summarize, we have large, central power plants that are responsible for powering entire communities or cities. With the benefit of a connected grid of transmission and distribution lines, these large power plants do not need to be located close to customers, but rather can remain part of a centralized market.” These high-powered generation resources are designed to satisfy the electricity needs of hundreds of thousands - or even millions - of households and businesses in a given region. “At present, the electric grid is very centralized: Large power plants are connected to electricity buyers through a web of transmission and distribution lines.
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