Virtual Power Plant

A virtual power plant is a system that aggregates many small, geographically scattered energy resources, such as rooftop solar panels, home batteries, electric vehicle chargers, heat pumps and small generators, and coordinates them through software so that together they can be dispatched and sold into electricity markets as if they were a single, conventional power plant. Individually, a resource like one home battery or solar array is too small for a grid operator to manage or trade, but a management system aggregating thousands of them can shift electricity use, discharge stored power or curtail demand on request, providing grid services such as frequency regulation and reducing the peak demand that would otherwise require expensive peaking power plants. Because it relies on distributed hardware that already exists rather than new large-scale generation, a virtual power plant can be built up faster and at lower up-front cost than a conventional plant of equivalent capacity, and utilities have reported that the approach can cut peak-demand costs substantially compared to relying on peaker plants alone.