Virtual Power Plants Gaining Traction Down Under and in the U.S.

Oct. 18, 2023
Virtual power plants are growing in popularity as utilities, state and local governments and communities look for ways to effectively utilize an increasing number of distributed energy resources (DERs).

This week it was announced that construction had begun on phase two of Western Australia’s (WA) Schools Virtual Power Plant Project, which will add seven regional schools to a virtual power plant (VPP) first launched in 2021.

The schools, which are located in Kalbarri, Geraldton and Kalgoorlie, will have solar panels and commercial batteries installed on-site. It is expected that the systems will be operational in time for the 2024 school year.

VPPs key to Western Australia’s future

"Virtual power plants have the potential to play an important role in [Western Australia’s] future as we build more renewable energy assets," said Bill Johnston, Western Australia’s Energy Minister.

That’s why WA’s government and Department of Education partnered with Synergy, the state’s largest electric utility, to launch a VPP pilot program in 2021. Seventeen schools were part of the initial phase, which was dubbed the Schools Virtual Power Plant Project.

The pilot was a success and enabled participating schools to better manage their energy use and support the larger power grid, according to a statement released by the WA state government.

"The virtual power plant project is a terrific program that is supporting schools in lowering their energy bills, while also stabilizing the broader energy system,” said Tony Buti, Western Australia’s Education Minister.

The program’s expansion to add seven more schools, which is being funded through the WA government’s Schools Clean Energy Technology Fund, was announced in 2022.

In addition to lower energy costs and increased grid stability, proponents of the Schools VPP Project are also excited about the learning opportunities it provides to students.

"The project offers WA students the chance to learn more about how energy is produced and used – equipping them with STEM skills and knowledge, which is a really important part of their education," Buti said.

VPPs are similar to microgrids

Virtual power plants are growing in popularity as utilities, state and local governments and communities look for ways to effectively utilize an increasing number of DERs.

VPPs are similar to microgrids in that they utilize solar plus storage systems, electric vehicles and other DERs to create a reliable power network. The difference is that VPPs use an intelligent control system and bidirectional technology to aggregate energy from networked resources located at multiple sites, bundling together what could be hundreds of discrete power sources into one during times of peak demand, just as a centralized power plant would.

Microgrids, on the other hand, use connected DERs to power a defined area, such as a college campus or business, independently of the main power grid – providing resilience to the microgrid owner.

VPP programs also launching in the United States

Australia has been on the forefront of VPP deployment. In 2018, South Australia announced the construction of what was, at the time, the largest virtual power plant in the world. Later that year, the Australian Energy Market Commission announced it would support the idea of VPPs competing freely on the wholesale energy market.

Virtual power plants are increasingly becoming an important part of the U.S. energy landscape as well.

In August, the Public Utility Commission of Texas announced two VPP pilot programs that will coordinate the operation of consumer-owned connected devices and will collectively become another dispatchable power source for the Electric Reliability Council of Texas during times of high demand.

San Diego Gas & Electric is also running a VPP pilot project to help the grid meet electricity demand when summer temperatures rise.

And, just last week, the Missouri Public Service Commission voted overwhelmingly in favor of a plan that would allow the aggregation of commercial and industrial customers into VPPs that can participate in wholesale market demand response programs.

The move was praised by DER monetization and VPP providers like CPower.

"We applaud the Missouri Public Service Commission for its leadership in being the first MISO state with a traditional regulatory model to allow VPP providers and customers to contribute to grid reliability,” said Peter Dotson-Westphalen, senior director of regulatory and government affairs at CPower.

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About the Author

Kathy Hitchens | Special Projects Editor

I work as a writer and special projects editor for Microgrid Knowledge. I have over 30 years of writing experience, working with a variety of companies in the renewable energy, electric vehicle and utility sector, as well as those in the entertainment, education, and financial industries. I have a BFA in Media Arts from the University of Arizona and a MBA from the University of Denver.

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