Virtual power plants (VPPs) are part of a growing trend in which the intelligent aggregation and optimization of distributed energy resources (DER) can provide the same essential services as a traditional 24/7 centralized power plant. VPPs can help transform formerly passive consumers into active prosumers through the integration and optimization of new technologies such as demand response (DR), solar PV systems, advanced batteries, and electric vehicles (EVs).
According to a new report from Navigant Research, VPP market revenue from 2019 to 2028 will experience a compound annual growth of 48.6%. The report analyzes capacity, implementation spending, and market revenue for three primary virtual power plant market segments.
“The evolution of energy markets is accelerating toward a greater reliance on DER, whether those resources generate, consume, or store electricity,” says Peter Asmus, research director at Navigant Research. “Through VPPs, prosumers can become active participants in delivering services tailored to their own needs and preferences that also serve the larger grid.”
According to the report, VPPs can be viewed as a part of a trend often described as transactive energy (TE). This puts the value of the grid itself in a central role and involves the counterintuitive trend of customers self-generating and managing supply and demand at the premise. TE, which is expected to expand and grow more sophisticated, involves the free communication of information among parties, allowing them to exchange energy services.
The study segments the VPP market by two customer applications: commercial and industrial (C&I) and residential customers. Global market forecasts extend from 2019 to 2028 and are based on a number of key assumptions. The report also provides a total VPP forecast for five countries deemed key markets: US, Germany, UK, Australia, and Japan.
— Solar Builder magazine