Grid Modernization

How Virtual Power Plants Are Shaping
the Global Energy Transition

The push for electrification is rapidly driving implementation of smart technology to enhance customer experience in everything from electric vehicles (EVs) and home energy management systems to industrial automation. At the same time, consumers have less choice over both where their power comes from and when.

The U.S. Department of Energy’s recently-published report about Virtual Power Plants (VPPs) as an alternative to the way power is sourced and distributed is both timely and necessary. VPPs, a type of distributed energy resource (DER), will play an important role in the race to find energy solutions that meet the grid needs of tomorrow without compromising on environmental impact.

Why the Status Quo Must Go

The U.S. electric grid will need to add enough new capacity to serve over 200 gigawatts (GW) of peak demand by 2030. To get to 100% clean energy by 2035, we will need twice this capacity. It’s also important to note that this doesn’t account for electricity infrastructure that will be decommissioned and going offline.

Meanwhile, the U.S. Bureau of Labor Statistics revealed that the average utility bill in the United States increased by 16% over the past year. And many energy experts expect electricity prices to continue increasing. 

With this increased load on the grid, businesses are even more susceptible to power interruptions. Short-duration blackouts can cause large-scale damage to products and manufacturing lines. A single power blip can disrupt businesses that depend on automation like robotics, that then have to wait for their machines to reboot.

Commercial & industrial customers, who have historically used diesel, batteries, and solar, are looking to outside resources to overcome the limitations of these power sources. Furthermore, many C&I customers value cost savings, capital strategies, reliability, and sustainability. Until now, no single product has served those needs. Instead, companies have incorporated various projects, which have often been technically challenging, cost prohibitive, or limited in some other way. 

VPP Liftoff

US Peak Electricity Demand
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Peak demand served by VPPs
Peak demand served by non-VPP resources
Peak demand served by retiring resources
New resources needed to meet peak demand
Source: US Department of Energy

C&I customers want – and need – to make big changes both for the financial health of their business and to meet ambitious ESG goals.

Utility companies that understand the importance of keeping up with the continuously evolving energy technologies can use technology to help their customers, attract new C&I customers, and spur economic development in their respective territories. Some of these utilities are already doing a great job of this through joint projects and other ventures. 

Virtual Power Plants are a step in the right direction to address the current crisis in the ever-shifting energy landscape.

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What are the Key Benefits of virtual power plants?

VPPs are a distributed energy resource (DER), a smaller-scale power source relative to the public utility and is usually located on-site or closer to the end user. DERs can include anything as small as a solar panel or battery, or as large as a VPP.

Distributed energy resources such as VPPs are expanding due to the many benefits they offer businesses, such as:

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Increasing societal return on investment (SROI)
investments
Increasing the yield on investments in clean assets
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Reducing reliance on fossil fuel baseload generation
reducing-energy-costs
Reducing energy costs 
for consumers
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Improving the grid’s reliability and stability by providing grid services
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Improving energy resilience by providing backup power when needed
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Reducing the need for 
new transmission and distribution infrastructure
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How can you apply the principles of virtual power plants to your business?

With power blips and outages causing unplanned downtime, damage to products, and an unpleasant experience for customers, businesses need to gain a level of independence from the public grid. One way to do this is to have reliable, local, individually owned power plants at their site, such as a VPP.

Important Considerations and Challenges

Specific requirements for implementing a Virtual Power Plant (VPP) will vary based on factors such as DER composition, operational model, and market participation model. Some common requirements for implementing a VPP, regardless of the above factors, include:

  • A distributed energy resource management system (DERMS) to manage and optimize the use of distributed energy resources
  • Advanced communication and control systems to enable real-time monitoring and control of DERs
  • A market participation model that allows the VPP to participate in energy markets and provide grid services
  • A regulatory framework that supports the deployment of VPPs and enables them to provide grid services
  • Participate in VPP specific programs that allow operators to generate revenue
  • A diverse portfolio of DERs that can provide a range of grid services and optimize the use of clean energy sources

Overall, implementing a VPP requires a combination of advanced technologies, market participation models, regulatory frameworks, and business models to enable the integration of distributed energy resources into the grid and provide grid services.

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Meet Virtual Utility®Your Private Electric Co-Op

e2Companies has made significant investments in researching and developing a solution to overcome these challenges. By offering the benefits of virtual power plants and the certainty of a utility company, Virtual Utility® is able to solve public utility challenges by easing the strain on the grid while giving commercial consumers more choice in their energy mix along with improved reliability and power quality.

Get the power of a public utility at your facility with Virtual Utility®, which combines uninterruptible, prime capable power generation with energy storage and grid optimization services to help you proactively manage your energy consumption. 

At the heart of Virtual Utility® is the patented R3Di® system, a power generation and energy storage system that can operate in-sync with the power grid and or independent from it, providing a reliable energy solution in an uncertain future.

The other component of Virtual Utility® is the Grid Response Optimization of Virtual Energy (GROVE), the operational hub for distributed assets, including the R3Di® system. It provides real-time grid information, asset health monitoring, and remote dispatching capabilities.

Learn More
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How do virtual power plants compare to Virtual UtilityⓇ?

Both are considered DERs and place an emphasis on lowering costs and providing reliable and resilient power. But there are some important differences, one of the main ones being that while VPPs are owned and operated by a utility, Virtual Utility® gives the customer complete energy choice.

Virtual Power Plant
Utility owns and operates portfolio of VPPs, sometimes with third-party software
Manufacturer/retailer of DER enrolls and manages
Dispersed
Aggregates disparate assets to be controlled by the Utility company
Bundle of technical assets that can be turned on and off. Someone else controls electricity generation.
A group of decentralized assets with disparate data sources that are pooled together to mimic a centralized power plant.
Can be vulnerable to cyber attacks due to cloud computing and the accessibility of the physical location of the hardware.
Broad definition — can refer to many different types of networks and physical assets.
Aggregates many DERs to reduce demand during peaks
Virtual Utility®
Customer can own and operate the DERs that comprise the VU, such as the R3Di® system
Customer can own the DER and VU can manage for customer, if desired
Centrally located
Customer has complete autonomy with Public Utility’s optionality
You have full control over your electricity generation mix + optional monitoring and optimization service.
Data is aggregated in one central platform (Grove365), designed to give end-users complete SCADA control.
Triple-redundant security protocols, with verification of end-user controls, independent of cloud computing.
Tangible, specific — refers to one, unified transmission and distribution network.
Streamlines all power, generation, delivery, billing, and supply management to give the consumer complete energy autonomy

Beyond the provision of individualized components like solar panels, batteries, or generation sets, Virtual Utility® presents a comprehensive solution that encompasses all requisite technological facets that are augmented by optional optimization assistance. This extends to leveraging market dynamics that empower consumers to make informed decisions regarding whether to use renewable sources versus the public grid based on prevailing market prices.

Virtual Utility® offers consumers an independent energy position with the option to have expert monitoring through Grove365, resulting in increased flexibility and cost savings.

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How Virtual Utility® Can
Bolster Utility Companies

While relying solely on centralized, large-scale utilities is no longer feasible due to increasingly unpredictable weather patterns and costly upkeep, utility companies can play a pivotal role in energy decarbonization through a mix of decentralized, distributed energy on both sides of the meter.

Virtual Utility® is uniquely positioned to integrate with utility planning and incentives. In addition to the benefits of a VPP, Virtual Utility® offers:
  • Quick, seamless switchover to alternate power sources when positioned at substations or between large generation systems including renewables. For example, the R3Di® will respond to wind turbines that are no longer working, offering a cushion for renewables by filling the gaps
  • Redundancy through the R3Di® system, providing instant grid support and can operate indefinitely on an on-demand basis, if needed
  • Power density that enables long-duration support versus the 1-4 hours offered by generators
  • Non-wire and grid service solutions
  • Meets utility standards as prime power
  • Elimination of upstream equipment to harden grid reliability
  • A smaller geographic footprint — High power density in a compact package. No battery farms or large amounts of land required for energy storage installation.
  • Integration into utility planning and incentives, including wholesale markets
  • Support for larger scale operations compared to most VPPs
  • Lower costs, improved reliability and lower environmental impact, earning support from your customers

Rather than directly providing power for a large region, utilities can address demand reduction through tailored programs by becoming energy brokers that fund projects such as microgrids, Virtual Power Plants and other DERs.

These types of projects have been seeing success in areas such as Austin, Texas, where utility companies have created a win-win situation: Businesses seeking backup power provision can contribute excess energy back into the grid, effectively subsidizing initial capital expenses, and in return, they gain priority access in times of grid instability or challenges.

4 Important Next Steps
for Utility Companies

  1. Utilities should give consideration to all customer classes, including large commercial industrials such as those found in Austin Energy’s Resiliency as a Service, thereby supporting their customers and local service territory
  2. Simplify VPP enrollment by increasing standardization in VPP operations, the biggest issue being cost and clear incentives from the participation of distributed generation in VPP aggregations.
  3. Work with legislators on tax incentives and set up programs, realizing we can’t afford to wait for disaster to strike as we saw previously during Winter Storm Uri. Texas is leading the charge in this area with a backup power package program. The state funded $1.5 billion for microgrids, and the public utility distributes those funds. If the grid goes down, critical services and capabilities will be maintained.
  4. Create a clear process for a forum for companies that have these new technologies to present what they’re working on and get real feedback.

How Virtual Utility® Can Help Your Business

Virtual Utility is a one-stop shop that streamlines all power generation, delivery, billing, supply management, and more.

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Energy
Autonomy

Gain full control over the what and when of your energy sources. You can connect to a microgrid, renewables, the public grid, or a combination of all three.
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Cost Savings
and Compliance

With 24/7/365 Asset Monitoring through The Grove, our network operations center, you can access different power sources when it makes financial sense to do so, while also ensuring you maintain ESG compliance.
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Energy Reliability
and Security

And thanks to the R3Di® system, which provides blip-free, instantaneous backup power, your company never has to lose money due to unplanned downtime, product damage, or customer loss due to brownouts and blackouts.

If you’re ready to gain the advantages of a virtual power
plant, but with more control over your power, let’s talk today!

Contact Us