Virtual Power Plants: The future of energy

What if instead of building power plants, we could make hundreds or thousands of energy resources such as solar panels, wind-turbines, work together to create virtual power plants to meet our demands and distribute energy as needed?

A virtual power plant (VPP) is an energy system that represents an ‘internet of energy’ and unifies several power sources to give an overall reliable power supply in a controlled manner. VPPs use a smart grid to manage and forecast customers’ energy assets and provides them with the exact amount of energy needed at any given time, thus increasing revenue for customers and energy providers alike.  

As the grid is designed today, power plants supply energy to consumers which then pay a certain amount depending on how much they used at the end of each month. VPPs however, allow energy to flow both ways and offer customers the opportunity to participate in the market by supplying renewable energy, such as solar energy. Instead of providers meeting customers’ demand for electricity by supplying a greater amount, they have an option to pay their customers for their energy generated through solar panels or any other viable source. By doing so, they reduce people’s energy usage in one area and make use of the stored renewable energy to balance increased demand elsewhere.

For businesses, being part of a VPP system gives them the opportunity to participate in the market and making better use of the energy system by avoiding peak charges, simplifying future demand on energy as the company expands and ideally making profit. 

The virtual power plant project will remain as a pilot project since it is still unknown who would own the resources of a virtual power plant and what different power sources it will consist of. However, it is projected to drastically scale up in the next few years and it is estimated that the Solar VPP market in countries such as Ontario and Quebec will exceed 2000MW by the year 2022.