SEPT 2023
What is a Virtual Power Plant?
VPPs Made Simple
Written by Kerry Mullany
What is a VPP?
The term VPP is buzzing around the world of renewable energy as the uptake of solar batteries grows. However, an acronym is just gibberish if we don’t know what it means.
VPP stands for ‘Virtual Power Plant’
Still scratching your head?
You're not alone. It took us some time to wrap our heads around this innovative way of managing and distributing renewable energy too.
To help you become the virtual power plant expert we know you want to be, we wrote this blog explaining everything you'll ever need to know about VPPs.
What we'll cover:
- Traditional vs Virtual Power Plants
- Who controls the VPP network?
- Why do energy retailers need my system?
- A super simple way to think about VPPs
- What are the perks of VPPs?
- How do I sign up?
Let’s jump in.
Traditional vs Virtual Power Plants
Before diving into the virtual aspect, a good place to start is understanding what a traditional power plant is.
Traditional power plants are large centralised facilities that generate electricity using sources such as fossil fuels (coal, oil, natural gas) or nuclear reactions. This electrical energy flows in one direction, from the plant, through the grid transmission lines, to the consumer.
Now, let's talk about Virtual Power Plants (VPPs).
A VPP is an interconnected network of smaller power resources, centrally controlled and coordinated to act as a united energy source. The power resources include wind turbines, solar panels and batteries, spread across various locations. To avoid over-complicating things, our focus will be on solar panels and battery storage systems for this blog.
Who controls the VPP network?
Energy retailers manage VPPs. They can access a part of your battery's energy to help balance the electricity grid. They might use your solar battery during times of high-demand or store energy for later use - we'll explain why shortly.
The bonus: they pay you for this privilege.
This doesn’t mean you relinquish all control by the way. How you use your battery and solar energy is still under your jurisdiction. Special energy plans help you manage the what, when, who and how of your solar energy is used and exported.
All you need to really understand is that a percentage of your battery’s energy is accessible to the energy retailer.
You're basically saying to your VPP energy retailer: “Hey, my battery is abundant with clean solar power and you can share a portion of it for an agreed price".
We’ll explore the details of making money later…
Why do energy retailers need my system?
The switch to renewable energy on a mass scale is inevitable for a stronger and more reliable energy system. The traditional methods of using depleting resources and an ageing grid, is no longer a sustainable option for the energy industry.
To improve the way we make, use and distribute energy, it's out with the old and in with the new tech. That's where VPPs come in. They allow energy retailers to use and store energy more efficiently, reduce waste and provide a more reliable service.
A super simple way to think about VPPs
Imagine your solar panels and battery teaming up with others nearby. Each system share a portion of its solar power and battery space with the energy provider. The energy provider manages the collective network of systems to move and store energy between them and other energy consumers. The reward for participating in this team network: you earn money from the energy retailers.
BONUS: Feel good about helping ease pressure on the grid and providing clean energy to others consumers when it's needed the most.
Why do I even need a solar battery in the first place? Are batteries worth it?
It's not just VPPs making battery investments worth while.
Starting to make sense?
Hopefully we’ve simplified the energy jargon enough to give you the basic concept of a Virtual Power Plant. Now, let's explore the benefits of Virtual Power Plants.
What are the perks of VPPs?
As a solar and battery owner, you are no longer the average energy customer. You’ve got yourself quite the combo with that valuable storage space and squeaky clean rooftop solar energy.
Remember we mentioned energy retailers tapping into your battery storage space and accessing your solar energy?
Take advantage of big energy retailers in need of a solution to their problem! C’mon, it’s not like they haven’t taken advantage of you for years until now!
Make the most of your solar purchases by participating in a VPP network and accessing these benefits:
1. The 'Special Treatment’ Money-Making Energy Plans
Solar and battery owners have access to exclusive energy plans designed to maximise their battery’s efficiency and make them money. Yep, that's right… You could start looking forward to your energy bill arriving!
There are a number of VPP plans out there, each with their own settings and incentives. Some might offer a higher fixed rate for energy exports, whilst others offer a variable rate based on wholesale prices at the time. Consider what you want to achieve from your battery and solar system. Whether it’s making extra cash, boosting battery efficiency, or both. With lots of options to choose from, there will be one suited to your needs.
2. Use Energy More Efficiently
A VPP network uses advanced software to monitor energy demand, supply, and market conditions in real time. This measuring technology helps the network distribute energy more effectively, reducing waste. Monitoring market conditions helps you rely less on the grid and optimise your savings.
3. VPPs are Smooth Talkers
Unlike traditional power plants, VPPs can move energy back and forth between sources and storage facilities. Energy can be created, stored, and shared more smoothly as demand fluctuates.
4. Enhanced Energy Independence:
With VPPs, you have more control over your energy use, relying less on external sources and their market prices.
5. Enhanced Grid Reliability
VPPs make the grid more stable by using renewable energy more effectively. By bringing together a network of different sources, such as your solar panels and battery, a VPP creates a stronger, steadier and more consistent supply of energy. This stability reduces the chance of blackouts.
6. Environmental Advantages
And of course, solar and batteries are already playing a big part in cutting back emissions. VPPs harness this clean renewable energy and minimise grid energy wastage by providing a storage space for excess. All of which help curb greenhouse gas emissions and combat climate change.
Side note: If you don't have a solar battery yet, there are even more perks to enjoy on top of participating in a VPP.
Where do I sign up?
Ready to reap the benefits of VPP? It's easy!
All you need are solar panels, a battery, and an energy company offering VPPs.
There is usually a basic application, but once you're in, you'll enjoy the perks.
Conclusion
VPPs, or Virtual Power Plants, are the future of energy management. By connecting solar panels and batteries in a VPP network, we are revolutionising the way we use and share energy. Allowing energy retailers to tap into your battery's energy and storage space, offers them a viable solution to stabilise the grid and increases access to clean renewable power.
More importantly you can increase your savings along with other perks; exclusive energy plans, improve your solar system's efficiency, enhance your energy independence. Joining is simple; all you need are solar panels, a battery, and an energy company offering VPPs. Making money has never been easier.
VPPs are the bridge to a cleaner, more sustainable future. Think of it like a team effort, where solar panels and batteries work together, benefiting all involved, including other energy consumers and the environment. Embrace the future of energy with Virtual Power Plants and make a positive impact on your wallet and our world.
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