“Virtual Power Plant”: Is This The Future Of Energy?

The world is moving towards energy efficiency and renewable energy. Considering this growing awareness around environmental protection, India has set a target of achieving 175GW renewable energy by 2022. The Virtual Power Plant (VPP) will aid in achieving this goal substantially.

A VPP is a cloud-based/virtual system, which aggregates heterogeneous energy resources in one place. The ecosystem consists of solar plants, battery storage systems, wind turbines, electric vehicle charging stations, demand and response management centers, and smart meters. Power utilities, renewable energy operators, energy producers and retailers, VPP operators, and building managers are some of the key stakeholders involved. This system functions for power generation, intra and inter electricity trade, sale and purchase of power in the market. In simple words, VPP is to a traditional energy plant what the internet-connected desktop computers are to the mainframe computer. Both can perform advanced computing tasks, but VPP can also perform energy management functions.

The brain of the Virtual Power Plant is in the main control system, which is supported by the much spoken about Artificial Intelligence (AI) and Internet of Things (IoT). These technologies have the power to produce a progressively autonomous grid that will eventually handle billions of endpoint users within utility networks and mini-grids. The VPP receives commands and sets points from the top-level entities, else acts autonomously. The database is connected to the electricity market, where relevant and important information is exchanged between the VPP, retailers and aggregators. The VPP platform consists of the solution developer, platform operators and end-users.

This system has multiple advantages:

· Real-time, smart management of power supply, will aid in preventing electricity theft

· Under this system, electricity from one consumer can be transferred to another consumer in case the electricity supply goes down at either end.

· Given the efficiency and proximity to the source of energy, electricity can be accessed at a lower cost than traditional methods.

· The consumer will potentially have the flexibility to either choose between two VPPs or between a VPP and a traditional electricity supplier. Thus, the cost of electricity will assume competitive prices and go down for the consumer.

· It will also present the option between renewable and non-renewable sources of energy. This will also reduce harmful emissions and achieve environmental goals.

· Since consumers will be closer to where energy is generated, it will result in less energy loss during energy transmission. As per US Energy Information Administration, India's transmission and distribution losses are almost 20% of total generation, way more than twice the world’s average.

· Virtual power plants are also used to provide additional services to grid operators to aid plant stability. The ancillary services include frequency regulation, load maintenance while providing operating reserves. These services are used to maintain the instantaneous balance of electrical demand and supply. The power plants providing ancillary services must respond to signals from grid operators when asked to increase or decrease the load. This task is performed within seconds or minutes in response to varying levels of consumer demands.

· Other benefits for customers include self-sufficiency in the community, and freedom from large, faceless, inaccessible companies. This, along with mass participation and co-determination, while help imbibes a strong community feeling.

If we are to talk in the Indian context, favorable government acts and policies will play an important role in the adoption process of VPP. As far as the existing initiatives of the government are concerned, the electric vehicle (EV) policy of the government, as part of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) along with National Electric Mobility Mission Plan (NEMMP) 2020, will require the development of EV charging infrastructure. Implementation of VPP can help in effectively managing the battery charging stations across the country, for which efficient power supply is an issue. Furthermore, successful implementation of the management practice of the “five-minute scheduling” policy can be made possible by using VPP.

In India, DISCOMS (power distribution companies) come under decentralized, state control. Solar cells installed on the rooftops of buildings and offices, India is heading towards decentralized power generation, known as distributed energy resources (DER). India has started energy export recently for the first time in its history, to countries like Nepal and

Bangladesh. This technology will aid further export with greater efficiency. Thus, VPP is in line with India’s energy goals.

VPPs can also be used as an aid to advance socio-economic programs and policies. Reliability and output efficiency due to its modular design enables setting up a database practically anywhere, irrespective of whether the area is supported by the main utility grid or not. This will allow manufacturing companies to either relocate from the usual urban outskirts to an area where overhead and labor costs are low. This system thus has the potential to make sustainable and renewable energy an increasing reality, as VPPs have all the software to modify how we generate, use, and store electricity.

Despite these prospects, there are certain challenges we are yet to overcome. For instance, large-scale implementation of VPP in India can be deterred by several challenging factors such as a weak regulatory framework. Some large companies are reluctant to join the VPP architecture owing to issues around power grid safety, stability, pricing, and operational efficiency. Further, with the growing number of cyber-attacks, security and privacy of the enormous data collected from consumers and companies become a major challenge. To overcome these challenges, India needs massive up-gradation of its technologies. To accomplish this task, we need to focus on research and development (R&D). As per World Bank figures, India allocates than 0.65% of GDP is allocated to research. Lastly, VPP can be used in mini-grids and micro grids only, thus limiting its scale of operations. Thus, we have a long way to go for VPP adoption.

Today, The International Energy Agency (IEA) estimates that approximately 1.3 billion people, mostly in Africa and South- Asia live without power today. Fairness of opportunity demands all populations to have access to electricity and the benefits it provides in the domain of health, education, and economic opportunity. Moreover, a similar number of people have only intermittent access to power, that is, they suffer from regular power outages for hours or days at a stretch.

The government initiative is imperative in the present situation. As BES Director South America of AES Corporation, Joaquin Melendez C. notes:

“We need to educate the masses about the ongoing projects because they are similar to solar power projects initiated by the government. It is the same context. This is the concept government of India is discussing across meetings.”

Thus, government of India is on the right track by initiating talks and generating awareness. However, a long path is to be covered before Virtual Power Plants are commonplace.