Virtual power plants can help the adoption of decentralized generation

1 July 2010 - The concept of ‘virtual power plants’ could become more than a theory or small-scale pilot by the aggregation of large enough quantities of locally-generated electricity that can be traded on the energy power markets. So says research company IDC Energy Insights in a new report that provides an in-depth look at the RWE Virtual Power Plant (VPP) implementation.
In its report: ‘Defining the Virtual Power Plant’, IDC defines a VPP as a technical, operational and economic construct that aggregates distributed supply and demand resources in a manner that enables the VPP operator to treat the distributed energy resources as if they were a single power plant.
Basically, a central control room links-up and remotely operates small, distributed power stations, like CHP units, photovoltaic systems, small hydropower plants, wind farms and biogas units, storage facilities – but also power loads that can be switched off or dynamically managed.
IDC believes that the positive environmental and economic impact of decentralized generation can be substantially improved by setting up virtual power plants. While a handful of VPP projects are being developed, the concept is far from being normal practice.
IDC believes that RWE's VPP is exemplary for its size, and its attempt to reach a large enough scale to be able to sell on the market both its generated electricity and its reserve capacity.
RWE began its first VPP implementation in 2007.
The generation capacity that RWE Energy is able to collect is sold on the EEX power exchange, and the reserve capacity is sold through auctions. The current success of the project has given the partners the possibility to further it by expanding its capacity to 30-40 MW over the next couple of years.

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