Overview: Virtual Power Plant
Everything has to change with the changing world, and a power plant is not an exception to it.
When the global energy market is going through a transformation, it is high time we should move from the conventional model of centralized electricity generation.
The shift has to be towards a mixture of decentralized model and renewable energy production at smaller units.
Small companies or even households might own these small production houses. They will be called â€˜prosumersâ€™; a new term coined by joining two words-producer and consumer.
Isnâ€™t it a paradigm shift? Indeed, it is. Letâ€™s understand the VPP model.
What is Virtual Power Plant?
As the non-conventional renewable energy generation penetrates further, it challenges the traditional way of operating the electricity system.
It forces the reinvention and redesign of grids. Renewable energy sources such as sun and wind donâ€™t endanger the system balance if they are dealt appropriately.
Here comes the role of Virtual Power Plant! Here are some salient points of VPP.
- It is a collection of decentralized units in a power network linked and operated by a centralized, single control system.
- The individual units can be power producers, power storage units, power consumers, or power-to-X plants.
- The flexibility and power of the aggregated assets are collectively traded when the assets are integrated into a VPP.
- It gives the opportunity to the smaller units to access the energy market.
- Any decentralized unit can become VPP regardless of whether it is a producer, storage, or consumer unit.
The central control system uses an algorithm to adjust the balancing reserve commands. It is similar to the large conventional power plants.
VPP can quickly and efficiently react to trading power. It can adjust the plant operations as per price signals received from power exchange.
It is a flexible model
The biggest strength of VPP is its flexibility. It can balance the grid very fast. Hence, it is considered a versatile and swift model. In fact, it is the distinctive quality of Virtual Power Plant to a conventional power plant.
A VPP model well utilizes the aggregated power to react to variations of the power price on the exchange. Thus, it can execute trades fast.
The rates keep on changingmany times in a day on power exchanges. In the case of VPP, even the difference of three digits per megawatt makes hardly any difference.
All these things make VPP the power model of tomorrow.
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