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The Virtual Power Plant—making it happen

The Virtual Power Plant is the working title assigned to the modern electric system architecture and operations envisioned by utility industry leaders. The VPP integrates the operation of supply- and demand-side assets to meet customer demand for energy services in both the short- and long-term. It’s the evolution of the present-day power plant, so it can adapt to ongoing, rapid changes from electricity demand to information technology, and customer expectations, to name a few.

While the VPP represents a change a significant new direction in utility planning and operations, the critical capital components—advanced metering infrastructure (AMI) and related control systems—have already been deployed by utilities in all 50 states. Furthermore, these systems enable utilities to achieve enhanced capital utilization, lower financial risk, improved reliability, and reduced environmental damages. Whereas these goals previously often conflicted, they are the principal strategic objective of the VPP.

Yet, the VPP faces challenges that must be overcome, especially the ability to show net social benefits of AMI-enabled systems to complete this investment. A majority of benefit-cost analyses of AMI determined that utilizing these systems to also increase energy efficiency and provide load management, demand response, or price response helps to maximize the business case.

In April 2010, KEMA hosted its first Energy Innovation Forum—for its newly formed Innovation Day series—in Oakland, California. Industry leaders and experts gathered at this private, invite-only event, which included panels and workshops dedicated to the Virtual Power Plant (VPP).

KEMA compiled findings from the Energy Innovation Forum in a new white paper, “The Virtual Power Plant.” Whereas additional technological developments are necessary to make the Virtual Power Plant happen, the white paper also explores how designing service offerings and supportive business processes for both the residential, and commercial and industrial sectors are critical to connect with customers now. In addition, it outlines the policy and regulatory agenda elements necessary to support the VPP, as well as actions the utilities can start now, such as customer education of energy efficiency and demand response.

Read more in the “Virtual Power Plant” white paper.
Download the white paper at: http://www.kema.com/news/articles/2010/Virtual-Power-Plant-KEMA-Energy-Innovation-Forum.aspx

More information on the Virtual Power Plant will be available in KEMA’s forthcoming Utility of the Future Leadership Guidebook, Volume 3: Engaging the customer – The power behind the meter.

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