A recent report from Navigant Research examines the core of virtual power plant (VPP) and transactive energy (TE) platforms, identifying potential revenue streams that could be created through the integration of both.
The concepts of VPPs and TE are similar in that they place prosumers—formerly passive consumers that now also produce energy—at the forefront of an emerging market for grid services delivered by distributed energy resources (DER). Yet, industry stakeholders must consider significant differences as policymakers accommodate new technologies, business models, and software platforms associated with power generation, control, and transmission and distribution.
“The energy industry is shifting inexorably toward a more dynamic and volatile distribution network, where self-consumption and micro-trading will be the norm, whether between prosumers and the power grid or between prosumers themselves,” says Peter Asmus, principal research analyst at Navigant Research. “The disruption created by this scenario will be deep and pervade the entire energy value chain.”
VPPs could be viewed as a leading pathway to TE to meet the objectives of the Energy Cloud: providing power at high quality, on demand, and at a reasonable price. These platforms deliver greater value to the customer while also creating benefits for the host distribution utility and the transmission grid operator. According to the report, TE also enables prosumers looking to localize energy solutions in novel ways without traditional grid players, such as utilities or transmission grid operators, necessarily defining the rules of engagement.
The report, VPP Transactive Energy Revenue Streams, identifies six potential revenue stream opportunities: localized clean energy; virtual capacity; real-time demand response (DR); fast frequency regulation; smart voltage control; and big data from small sources. The report focuses on an envisioned integration of TE within VPPs and what types of services could result from such a marriage. An Executive Summary of the report is available for free download on the Navigant Research website.
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