Powering the Future: Virtual Power Plants and the Shift from Centralized to Decentralized Grids.

Future power systems will contain an increasing penetration of non-synchronous distributed energy resources. In this regard, reliable ancillary services provision, as currently ensured by conventional generators, must also be shouldered by distributed energy resources. This imposes great challenges to cope with the fluctuating nature of renewable energy sources, as well as their device-specific limitations.

As early as 1997, virtual power plants have been proposed to pave the way for future ancillary services by distributed energy resources. Virtual power plants are collections of distributed generators all with individual device limitations, aggregated to have the same visibility, controllability, and market functionality as a unique power plant. Today, most commercial implementations as well as the scientific landscape are restricted to virtual power plants providing static ancillary services in the form of tracking power and voltage set points.

The global energy demand is increasing daily because of economic and population growth, particularly in emerging market economies. Since the invention of alternating current electrical systems capable of transferring electrical energy over long distances, the one-stop power station has dominated electricity generation and supply. Currently, the paradigm of centralized power systems is being replaced by distributed generation, which is connected to distribution.

Therefore, the conventional centralized power grid has become a decentralized smart grid characterized by the following components: DG, energy storage, and smart electrical charges. Virtual power plants are innovative power systems that leverage advanced technologies to integrate and optimize the operation of distributed energy resources within a unified platform. Virtual power plants enable the efficient management and utilization of various energy sources such as solar panels, wind turbines, battery storage systems, and demand response programs. Virtual power plants incorporate distributed energy resources and cope with the variability in renewable generation.

The virtual power plants market is segmented based on technology into Distribution Generation, Demand Response, and Mixed Assets. Amongst technology, the mixed-asset segment of the virtual power plants market was at US$ 0.2 billion in 2020 is likely to reach US$ 2.0 billion by 2027, and is growing at a CAGR of 35% from 2021-2027.

In addition, virtual power plants are a new type of coordinated control and energy management technology that includes distributed energy resources, energy storage systems, and controllable loads integrated into different energy markets. Alternatively, the virtual power plant can be used as a power supplier to sell power or as a load demander to buy power. In contrast, the virtual power plant can also supply the distributed energy resource, and energy storage system to participate in the ancillary services market as system support.

In recent electrical power networks, the number of renewable energy sources and energy storage systems has continuously increased. Thus, recent approaches to controlling them have appeared, such as microgrids and virtual power plants. Generally, virtual power plants are autonomous units equipped with effective power flow control systems. Virtual power plants consist of different elements connected to the distribution network. The indicated elements are generators, loads, and energy storage systems.

The following are the most important innovations, focused topics, and virtual power plant-based methods. Virtual power plants, for example, allow the integration of demand response programs, which allow users to adjust their electricity consumption patterns in response to grid conditions or price signals, providing flexibility, and aiding in the balance of supply and demand. Virtual power plants can optimize the delivery of renewable power generation and balance it with other power resources by monitoring weather forecasts and power production in real-time.

As a result, virtual power plants are critical in integrating intermittent renewable energy sources such as solar and wind into the grid. Therefore, virtual power plants can optimize energy storage, smooth intermittent renewable generation, and provide network services such as frequency regulation and peak reduction using intelligent control algorithms.