This article from Navigant Research tells of a global market analysis and provides a forecast for demand response, supply-side, and mixed asset, virtual power plants or VPPs
The evolution of energy markets is accelerating in the direction of a greater reliance on distributed energy resources (DER). Successful strategies to manage this increasing two-way complexity are being deployed today all over the world. One such strategy is called a virtual power plant (VPP), which can be viewed as a manifestation of the concept of transactive energy. Essentially, the VPP can combine a diversity of independent resources into a network via sophisticated planning, scheduling, and bidding of DER-based services.
Several recent trends are creating an environment conducive to VPPs. These include the increasing penetration of smart meters and other smart grid technologies, growth in variable renewable generation, and emerging markets for ancillary services. However, challenges to commercial rollouts of VPPs remain, including the lack of reliance upon dynamic, real-time pricing and consumer pushback against the smart grid. The end goal for this market is the mixed asset VPP segment, because it brings distributed generation and demand response together to provide a synergistic sharing of grid resources.
Navigant Research forecasts that total annual VPP vendor revenue will grow from $1.1 billion in 2014 to $5.3 billion in 2023 under a base scenario.
This report analyzes the global VPP market, with a focus on three primary segments: demand response, supply-side, and mixed asset VPPs. The study provides an analysis of the market issues, including business cases, market drivers, and implementation challenges, associated with VPPs. Global market forecasts for power capacity and vendor revenue, broken out by segment, region, and scenario, extend through 2023. The report also examines the key technologies related to VPPs, as well as the competitive landscape.
Navigant says the report addresses these key questions:
- What is the Navigant Research definition of a virtual power plant (VPP)?
- How do the market dynamics differ for the three VPP market segments: demand response (DR), supply-side, and mixed asset?
- What technologies are being deployed within VPPs globally?
- Where are the projected hot spots for the three primary VPP segments over the next 10 years?
- How do VPP business models differ among vendors?
- How does the VPP fit into transactive energy trends?
- Why is the VPP the ultimate example of the energy cloud concept?