What are Virtual Power Plants?

Virtual is the buzzword of the decade. With virtual reality, virtual learning, and a host of other virtuals, virtual power will inevitably become a reality.

Termed “the Internet of Energy”, Virtual Power Plants (VPPs) are being utilised worldwide to support energy grids and drive the clean energy revolution. In 2020, London pioneered its first VPP, ushering in a new generation of energy supply and distribution in the UK.

But what are VPPs, what do they mean for you, and how can Agenda Electrical help you claim your stake in the Internet of energy?

What is a virtual power plant (VPP)?

Virtual Power Plants are collections of small-scale production, storage and consumption devices aggregated to support the National Grid. In other words, it’s a decentralised system that combines to boost the UK’s power capabilities.

Some of the devices included in this web include:

·  Solar panels

·  Batteries

·  Heat pumps

·  Smart home thermostats

·  Electric vehicle (EV) chargers

With more than 17,000 households installing solar panels every month in 2023, there’s never been a better time to make this more efficient method of managing energy a reality. The goal of a VPP is to create something greater than the sum of its parts.

For example, you might have an area with solar panels, batteries and other devices in different homes. Rather than them working alone to power their individual homes, they’re connected like they were a real power plant.

Whenever the grid needs more power to cope with demand, the VPP can send excess power. Obviously, this saves money by taking advantage of energy buy-back schemes and keeps the country’s supply more efficient.

What is an example of a VPP?

Today, the largest VPP in Europe is based in Germany and operated by the Norwegian company Statkraft.

Statkraft’s VPP brings together 1,400 power producers, providing a massive 10,000 MW capacity. If we dig into their portfolio, they’ve got 100 solar units, 1,300 wind farms, hydropower and bioenergy generators.

For context, 10,000 MW adds up to around ten nuclear reactors.

What is the objective of a virtual power plant?

VPPs are designed to provide more stable energy grids for all. It makes grids worldwide more resilient, reducing the risk of outages. Plus, by harnessing the power of households and separate installations as a single entity, it’s just a more innovative way to manage our increasing energy needs.

Additionally, VPPs reward households, often through lower prices or paying them an amount for excess energy generated.

How do virtual power plants work?

VPPs are decentralised systems that activate based on local energy demand. They rely on advanced software and smart algorithms to balance current grid loads, resources from customers and energy demand.

VPPs themselves are controlled by grid operators, which may be in the public sector or private companies. Under the rules, they can use the resources in certain circumstances, as described in their contract agreement. However, any participant maintains 100% ownership of their equipment.

In the UK, it’s standard practice for VPPs to provide direct compensation or energy credits on your bills if the stored power generated is discharged. Additionally, more advanced VPPs give you more control over your power, such as how, when and where your excess energy is sold.

What problems are solved by virtual power plants?

There’s never been a better time to go green. According to a study, solar panels save £1,099 annually on your energy bills, with up to £30,000 in savings across their lifespan. Solar batteries boost your capabilities even further.

So, by joining a VPP program in your area, what problems are you solving?

Energy Stress – As our demand for power grows, the National Grid is struggling to keep up. VPPs prepare communities by enhancing stability and efficiency, making them more resilient to periods of unprecedented demand.

Improve the Environment – VPPs drive the clean energy revolution at the consumer level. By providing real incentives, it’s hoped more households will invest in green energy installations. This will naturally improve local air quality and reduce carbon emissions.

Disaster Resilience – The UK is free of tornadoes, volcanoes and earthquakes, but flooding and high winds can play havoc with power generation. Advanced VPPs can send energy wherever needed after isolating downed lines, allowing communities to bounce back faster.

Fight Soaring Energy Bills – Energy bills have never been higher, and it’s caused the cost of living to spike. Households are looking to save more, and VPPs are one part of that. It works on two fronts: encouraging green investments that deliver savings in the long run and giving more consumers control over the energy they generate, allowing households to benefit from rebate programs.

You might say that VPPs are democratising the energy market by giving you more control over what you generate. It’s an opportunity to save money and drive down your bills by amplifying the savings from solar panels, heat pumps and other green energy installations.

What is the Swarm Virtual Power Plant?

The Swarm Virtual Power Plant is another innovation helping households to take advantage of this innovation. Connected through the brand-new Home Energy Management System (HEMS) device, the Hub:One, you can connect all your compatible devices at home.

The point of the Swarm VPP is to aggregate and manage every decentralised energy source across not only your household but also those of your neighbours. These are then linked together through Swarm to share and coordinate resources.

Like other VPPs, Swarm returns this excess energy to the National Grid, improving efficiency, grid resilience and reducing energy costs. According to Swarm, this simple device can save households an extra £30 per month.

The advantages of VPPs are why Agenda Electrical became the first supplier in the world to install the Hub:One and connect the first households to Swarm’s VPP. That’s why we install Hub:Ones with every future solar array installation.

If you’re interested in benefiting from the VPP concept and making your home more energy efficient, Agenda Electrical’s installers are ready and waiting. To learn more, contact us for your no-obligation consultation today.