Virtual Power Plants











The Smart Grid value chain brings together a wide range of vendors, power providers, investors, regulators, government agencies, research institutions, and standard-setting organizations. Key transition points within SG deployment include: deregulated electricity industry (‘broken value chain’) from a business viewpoint, the consumers consumption behavior (e.g. drastically change from passive to active actor of the grid), consumer concerns on data privacy/security or remote operation of appliances to manage peak load; the existing pricing mechanisms and transition access management from a regulatory viewpoint as well as financing of this new infrastructure and the achievement of a fair distribution of costs.

By far, there has been no consensus on the definition of the VPP. Literally, the VPP can be interpreted as a power plant with geographically located generation assets which are interconnected through the “virtually” existing communication channels.


The VPP can be generally viewed as a modularly designed software suite which effectively connects, coordinates and monitors decentralized power-generating sites, storage facilities and controllable loads via a common intelligent control centre. If ICT is incorporated, then the VPP can be considered as a small sized smart grid incorporating all aspects of a smart grid: communications infrastructure that goes all the way to the building premises, interfaces with advanced metering, distribution automation, energy management systems, home management system and optimization of system performance through a combination of enterprise level applications and distributed intelligence. In doing so, it can act within various energy markets as would a conventional power plant (see Figure 1). The VPP offers a broad variety of services to power plant operators, industrial enterprises, public services, electricity suppliers, power brokers and grid operators.


An important aspect in the VPP is the new perspective of the consumption and production of energy which is not anymore clearly separated, as there is an increasing number of industrial, commercial and private prosumers which are managing local energy production, consumption and storage (in some cases). The possibility of monitoring the electricity consumption will create both a new awareness of the final user for a less stressful management of the network and offer opportunities for “prosumers” to participate in the ancillary services market.




The study is based on three technical components.  Firstly the Virtual Power Plant (VPP) at an aggregate level combining energy generation from multiple sources, leading to "positive energy" buildings, i.e. having the ability to satisfy their own energy needs (thermal and/or electric) and contribute excess power to the community. Secondly electric vehicles (EVs) with a vehicle to grid capability and smart metering to allow the ebb and flow of energy between the grid, the virtual power plant and the EVs. The third element involves identifying business models for implementation and operation of the system.  The positive energy building concept becomes technically  and economically feasible if extending its boundary to groups of buildings, campuses or communities (aggregators). The feasibility study aims to indetify the issues that need to be addressed in these three areas and develop an approach to addressing the issues and the appropriate business model or models for developing a solution.