NewEnergyNews: TODAY’S STUDY: Virtual Power Plants Go Global


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    Tuesday, July 23, 2019

    TODAY’S STUDY: Virtual Power Plants Go Global

    Virtual Power Plants Go Global; A Commercial Pathway for Moving From VPP to DERMS

    Peter Ausmus, 2Q 2019 (Navigant Research)


    Virtual Power Plants Go Global

    As distributed energy resources (DER) continue to proliferate, so do the reliability challenges associated with smaller, diverse, and dispersed assets now populating the world’s aging grid infrastructure. In the past, one of the chief concerns of utilities and grid operators was managing the intermittency of wholesale renewable energy sources, such as wind. Today, the diversity of resources being added to the power grid now include EVs—with mobile loads equivalent to a home—and rooftop solar PV coupled with energy storage devices at residences. As the aging grid infrastructure was not designed for twoway power flows, these recent trends create new challenges—as well as opportunities. A transformation is needed. As the platforms required to manage a more DER-dominated grid emerge, virtual power plants (VPPs) provide the necessary software to deal with these challenges and keep electric grids in a state of constant, delicate, and reliable balance.

    Across Europe and Asia Pacific markets, utilities are joining their North American counterparts in seeking to modernize legacy demand response (DR) programs, widening the pool of DER assets and the services they can provide. This white paper shows that the need for grid balance is a global phenomenon. It highlights the ever-growing pool of diverse assets being rolled into VPPs and setting the stage for future DER management systems (DERMS). The VPP market is much more mature, but the evolution to DERMS is likely a natural response to the need for optimization of distribution networks due to the anticipated explosion of prosumer DER assets


    Utility Drivers for Grid Asset Control and Optimization Enbala has conducted a survey of the DistribuTECH conference attendees over the last 3 years. While attendee demographics shift annually, the survey provides a snapshot of top-of-mind trendlines among energy market participants—predominantly in North America, but also in Asia Pacific and Europe. The surveys reflect common concerns for utilities and grid operators as the world undergoes dramatic changes.

    As Figure 2-1 shows, the distributed energy resources (DER) that utilities and grid operators seek to control are diverse, ranging from loads to generation, energy storage to EVs. These findings confirm Navigant Research’s contention that the virtual power plant (VPP) market is shifting to the mixed-asset segment. VPPs, and ultimately DER management systems (DERMS), will both be designed to network and optimize the full spectrum of DER due to advances in artificial intelligence, scalability, and speed.

    click to enlarge

    Approximately 25% of the survey respondents have a VPP or DERMS platform in place to control and manage DER. When asked about the programs for which these assets are used, respondents name automated DR and integrated energy efficiency as the top two applications.

    This is consistent with results from the previous 2 years; however, 2019 showed a decrease in respondents saying they had DERMS pilots underway, dropping from 52% in 2018 to 38% in 2019.

    Despite these perceived obstacles shown in Figure 2-2, respondents also acknowledge many compelling reasons to invest in DER assets and the hardware and software technologies that control and manage them. Chief among them are meeting grid reliability concerns and sustainability/carbon reduction goals. Some 61% of the 2019 survey respondents said grid reliability was their primary investment driver, followed by 48% who cited sustainability goals and 47% who focused on increasing opportunities for customer choice. These drivers are closely aligned to results from 2018 and 2017. Addressing declining electric supply was ranked highly as an investment driver in 2019, with 38% of the respondents saying it was a key reason to invest. This is higher than reflected in the survey results for the previous 2 years.


    Expanding the Universe of VPP Portfolios and Use Cases The buzz around DERMS remains high. However, most utilities and aggregators start their journey to DERMS with VPP use cases centered around the monetization of revenue streams from DR, capacity, and ancillary services such as frequency regulation markets. While some of these markets have existed for quite some time, the needs of the grid have evolved to mixing and matching diverse aggregations of DER, instead of siloed solutions zeroing in on just load or just generation. The rapid increase in deployment of energy storage has shifted the entire global VPP market to the mixed-asset VPP model. Enbala’s Concerto™ software platform is one example of the continued evolution of this DER optimization and management. The company is among the key players setting the stage for the convergence of mixed-asset VPPs into DERMS…


    Extracting Value from Mobility Assets for Grid Services Vehicle-grid integration (VGI) enables EVs to participate in grid balancing schemes as generation or demand assets for grid operators. EV batteries can respond more quickly and accurately to grid signals than other utility grid service assets, such as natural gaspowered peaker plants. This speed and accuracy could boost grid efficiency, but in most markets, these performance advantages are not compensated accordingly. Nevertheless, the availability of EVs to respond to grid signals at any time is sporadic. As a result, many early VGI pilots have targeted plug-in EV (PEV) charging at workplace PEV fleets. If integrated into VPPs, EVs themselves can be transformed from a grid challenge into a DER opportunity. If creatively controlled, software can tune EVs to do the following:

    • Reduce negative impacts of EV charging loads on grid stability • Regulate frequency and offer voltage support for power grids • Enable mobile EV energy storage devices to become a grid balancing resource

    EVs are ideally suited for frequency regulation, a major VPP use case. They can also provide reactive power and voltage balancing—services that are more aligned with DERMS deployments by utilities. EVs offer several components and services of value: last resort stationary storage services, loads that (if curtailed or modulated) represent DR resources, and loads coupled with energy storage for optimized DR firming and flexible capacity. Early discussions of vehicle-to-grid focused on the use of vehicles to store energy in bulk and make it available to the grid or building at times when electricity is more expensive. While this market continues to have potential, attention has shifted to the use of EV loads for DR and to charging for frequency regulation. Using PEVs in frequency regulation has a lesser impact on vehicle batteries and automakers view it with greater acceptance. Along with DR, frequency regulation is also the prime service PEVs are expected to provide to microgrids and VPPs, ultimately addressing voltage concerns…


    The Convergence of VPPs and DERMS

    Though DERMS may be the new buzzword for those seeking solutions to DER challenges, the VPP use cases are more widely supported by regulatory structures, RFPs, and software technology advances. Each region around the world adds nuances to these use cases. The focus in North America, for example, has been more on regulated utility markets that are focused on DR. By contrast, Europe has seen a greater emphasis on large-scale renewable energy integration into wholesale markets since many DER portfolios are supported by feed-in tariffs rather than behind-the-meter energy consumption. Some view DERMS as a wider umbrella under which fall VPPs. Others, including Enbala, view DERMS and VPPs as essentially two sides of the same coin.

    Today, organizations ranging from the Institute of Electrical Energy Engineers, to the Electric Power Research Institute, to the Smart Energy Power Alliance are all trying to come up with a definition for DERMS. Perhaps the best way to view the convergence of these two control platform concepts is that they are on a journey—heading toward a future where economic and grid stability functions are ideally solved by a single platform. Just as DR providers have gradually expanded their control functionality to include control generation and then energy storage, so to can VPP platforms evolve into a DERMS solution, shifting from wider area networks and wholesale market transactions to more targeted active power management on distribution feeders, solving voltage hotspots. Today, actual commercial solicitations for DERMS solutions are few and far between. The global market for controls is looking to the monetize value streams now possible from DER portfolios. As DER penetration increases in the distribution network, there will be a need for DERMS to solve grid reliability issues in a more surgical way…


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