An emergent clean energy field: virtual power plants
Los Angeles area utilities are starting to turn to the new concept of “virtual power plants”.
Los Angeles area utilities are starting to turn to the new concept of “virtual power plants”.
Virtual power plants are networks of independent batteries, solar panels, and energy-efficient buildings that are linked and remotely controlled by software and data systems.
As well as providing renewable energy supplies in targeted areas, the plants permit the reduction of customers’ energy demand during peak hours, and this enables utilities to offset part of the needs for power from traditional sources and avoid disruption on the grid.
According to Navigant Research, a consulting and market research firm, the example of California could be a blueprint for virtual power plants, which new clean energy sector is expected to quintuple in size in the US by 2023, from 4,800 MW of capacity in 2014 to 28,000 MW in 2023.
In the US and in Europe, energy providers are experimenting virtual power plants as well for the management of distributed energy systems.
Omar Saadeh, senior analyst, GTM Research said: “There’s been a significant up-tick in interest from utilities and other power-sector shareholders to deploy these solutions for their different needs.”
He added “The whole notion that utilities are transitioning into a decentralised system is where this interest in virtual power plants and other technologies has really emerged.”
The software part of virtual power plants – “distributed energy resource management systems” – is expected to soon double in market value, from $50 million in 2014 to $50 million in 2018, according to GTM Research, and the whole virtual power plant market – including renewable energy technology and batteries – could grow from $1.5 billion in annual revenue in 2016 to $5.3 billion in 2023, according to Navigant.
The residential and commercial battery system market increasing quickly – thanks to companies like LG Chem or Panasonic – the market may be worth more, according to Peter Asmus, principal research analyst for Navigant in San Francisco.
