Over the past decades power grids have undergone a transformation towards smaller and more intermittent generators – primarily in the form of wind and solar generators – as well as smaller grid-connected batteries. This poses a significant problem when it comes to grid management, as this relies on careful management of supply and demand. Quite recently the term Virtual Power Plant (VPP) was coined to describe these aggregations of disparate resources into something that at least superficially can be treated more or less as a regular dispatchable power plant, capable of increasing and reducing output as required.
Although not actual singular power plants, by purportedly making a VPP act like one, the claim is that this provides the benefits of large plants such as gas-fired turbines at a fraction of a cost, and with significant more redundancy as the failure of a singular generator or battery is easily compensated for within the system.
The question is thus whether this premise truly holds up, or whether there are hidden costs that the marketing glosses over.
Reactive Power
The alternating current (AC) based electrical grid is a delicate system that requires constant and very careful balancing to ensure that its current current and voltage don’t go too far out of phase, lest grid frequency and voltage start following it well beyond tolerances. The consequence of getting this wrong has been readily demonstrated over the decades through large-scale blackouts, not the least of which being the 2025 Iberian Peninsula blackout event that plummeted all of Spain and Portugal into darkness. This occurred after attempts to reduce the amount of reactive power in the system failed and safeties began to kick in throughout these national grids.
This is also the point where the idea of a VPP runs into a bit of a reality check, as the recommendation by the grid operators (transmission system operators, or TSOs) is that all significant generators on the grid should be capable of grid-forming. What this means is that unlike the average invertor on a wind- or PV solar installation that just follows the local grid frequency and voltage, it should instead be able to both absorb and produce reactive power.
Effectively this involves adding local energy storage, which is where the idea seems to be that you can sort of fudge this with distributed dumb inverters and grid-connected batteries in the form of people’s whole house batteries and whatever Vehicle-to-Grid (V2G) capable BEV is currently plugged in within that subsection of the grid.
Theoretically with enough of these scattered generators and storage elements around, along with a few grid-forming converters and remotely controlled loads like EV chargers and airconditioning units, you could simulate the effect of a regular thermal- or hydropower plant. The question is whether you can make it work well enough, and as a logical follow-up question, there are those who would like to know who is really footing the bill in the end.
Battery Rental
An example of such a VPP in action can be found in California, where PG&E and others have recently been running tests. A big focus here is on these home batteries, which are also used for peak-shaving in these tests, with the battery owner compensated for withdrawn power. In a report sponsored by Sunrun and Tesla Energy, the Brattle Group describes this system in which the Demand Side Grid Support (DSGS) program aspect is hailed as a major revolution.
The idea here is that regular grid-connected consumers install batteries which the grid operator can then tap into, which can compensate for California’s increasing amount of non-dispatchable, non-grid forming generation sources. Of note here is that grid-scale energy storage can never provide enough capacity to bridge significant spans of time, ergo the proposal here is primarily to provide an alternative to expensive peaker plants, of which California already has a significant number.
With a predicted 4 GW of home battery capacity by 2040, this could then save the grid operators a lot of cash if they can use these batteries instead of running special peaker plants, or installing more large batteries as at the (PG&E-operated) Moss Landing battery storage facility.
Incidentally, said Moss Landing battery storage facility has repeatedly caught fire, which highlights another potentially major savings for grid operators, as the fallout of such events are instead borne by the operator of the battery, which for the DSGS would be the home owner. So far, remote adjustment of air-conditioning doesn’t seem to be a big part of the discussion yet, but this would seem to be only a matter of time, considering the significant power savings that way, even if it relies just on paid volunteers like with the DSGS.
Signs Of Market Failure
Although it can seem tempting to imagine making money off that expensive home battery or electric car by letting the local grid operator tap into it, the same general issues apply as with the much older V2G discussion. Not only is there the question of battery wear, but as mentioned there are also insurance considerations, and the problem that home batteries and BEVs tend to be sited far from where they are likely needed. While a site like Moss Landing is directly plugged into the big transmission lines, home batteries are stuck on some local distribution grid, making dispatching their power a bit of a nightmare.
This is also the impression one gets when reading certain articles on VPPs over at the US Department of Energy, with a VPP plan in Illinois targeting larger commercial and community solar generators rather than residential, giving them a rebate if they want to foot the bill for installing a grid-following converter, which presumably would involve some level of on-site storage. A major problem with distributed resources is their distributed nature, which precludes any planning or siting considerations that directly address demand in the form of building a power plant or pumped hydro plant with a direct transmission line to where it’s needed.
Meanwhile a recent study commissioned by the American Clean Power Association (ACP) concludes that in the US alone, electricity demand by 2040 is likely to surge 35-40% compared to today, requiring an extremely fast buildout of additional generating resources involving mostly the same kind of power mix as today. At a projected 5.5 – 6 TWh by 2024 compared to about 4 TWh today with a significant boost in non-dispatchable generators, it seems fair to question how far home batteries and a handful of V2G-enabled EV cars can support this effort in some kind of national VPP system.
Asking The Basic Questions
Although it’s often said that ‘distributed electricity generation’ is the future, it’s rarely quantified why exactly this would be the case. Simply looking at how AC power grids work, along with the tracing of the kilometers of required transmission lines across a map in order to connect all disparate generators should give one plenty of pause. It seems obvious enough that an abundance of distributed, non-dispatchable, non-grid-forming generators on a grid would also prove to be problematic, especially in the wake of the Iberian blackout this year.
Patching around this by making end-users foot the bill for battery storage and grid-forming converters and calling it VPPs then feels disingenuous. Here a more reasonable model – that has also been repeatedly suggested and occasionally implemented – involves homes and businesses equipped with local storage that only serves to reduce demand on the grid. These batteries can be charged from the grid when the ¢/kWh rate is very low, providing a balancing influence on the grid without remote control by TSOs or similar levels of complexity.
Ultimately it would seem that the European TSOs (ENTSO-E) with their focus on eradicating dumb converters and requiring grid-forming ones are on the right track. After all, if every wind and solar generator installation acts for all intents and purposes as a dispatchable generator with the ability to absorb and generate reactive power, then the whole VPP debate and much of the grid-storage debate is instantly irrelevant. It just means that the investors for these variable generators will have to spend significantly more instead of palming these costs off on end-users as some kind of grand deal.
This article uses a LOT of very specific “grid operator” language like “forming dumb coverters” and lots of TLA’s. What did I just read?! Where’s the “Hackaday” angle? Where is the homeowner who built their own VTG setup? The em dashes right at the beginning give me pause.
Everything is cited and referenced in the article for your background information pleasure needs. There are also no em-dashes in the text, so I’m not sure what ChatGPT-regurgitated alternative reality version you think you just read.
Ok so it’s an En dash…. Nobody but nobody uses anything other than the – character on their keyboard…..
Except for copywriters who use actual wordprocessors instead of typing into a terminal.
What do you mean “There are also no em-dashes”?? We can all obviously see the usage in the first sentence – and before you suggest an “en dash”, the usage determines “en” vs “em”, and the usage here is obviously intended to mark a sentence break. Considering the existence of the em dash, the last sentence in your reply comes across as unjustifiably arrogant. Also, the commenter never claimed the em dash was indicative of AI content (though I’ll admit the insinuation was there). I actually enjoyed reading the article (and admittedly I don’t understand the person’s comment or terms like VAG or TLA), and appreciate your in-depth writing, but the condescension in the reply sorta sours it all. Much respect regardeless.
No, em-dashes are a separate character type. It’s not the same as a hyphen, which is what I used in the article. Hence my reply, as only text-generators like ChatGPT commonly use em-dashes.
The angle is more likely page views and the related ads income I think. But maybe I’m wrong.
half the fun of reading online is when a phrase of art like ‘grid-forming’ tickles you, you can follow it down the rabit hole with google :)
“intermittent generators” you spelled “unreliables” wrong.
Overall, VPPs seem like an effort to avoid (or even merely delay) infrastructure investments by power companies. It seems quite inevitable that grid-scale battery facilities will be constructed and installed across the planet. The part missing from the equation is a producer of dirt-cheap sodium-ion batteries.
When they introduced huge numbers of VRE companies on the system, that didn’t have part or stake in power transmission at all, under subsidies and right-of-way on the grid rules, it simply created a situation where the utilities profit from the fact that the supply doesn’t meet demand.
The market has to transmit more power over longer distances to make ends meet. More transmission, more revenue, more profit. This is similar to the situation in California couple decades back, when the utilities faked transmission capacity bottlenecks in order to hike prices, pretending that power wasn’t available. This time they don’t have to fake it, because the system is actually broken.
And they don’t want to pay anything to fix it. Why would they?
The grid isn’t a grid but a tree for the most part, so placing the batteries near the trunk in central locations would reduce average transmission distance, and result in less revenue for the transmission company and fewer opportunities to hike prices. Installing the batteries at peoples’ homes would keep the transmission distances longer, and have someone else pay for it.
One thing which isn’t really explored here is Distribution System Operators, whose primary role is to do just this. Managing energy flows within the distribution network to optimise it’s capacity / capability, but at the same time working with the TSO(s) to help manage regional flows.
“It just means that the investors for these variable generators will have to spend significantly more instead of palming these costs off on end-users as some kind of grand deal.”
Ah like work at home then. Make Home Offices Great Again.
In a way, but even worse, as at least with a home office you can get a lot of expenses covered and even some insurance and tax benefits if you have it as a proper separate home office from your domicile.
This whole approach doesn’t seem to give you even such benefits, based on the programs I have looked at so far.
Honestly power plants should just implement load-shedding until the average consumer gets the picture and buys solar. Trying to wrangle a million battery banks into a semi-functional power grid is a complete boondoggle. Just give up, we aren’t going to fix it. The grid is to electricity what mainframes were to computing; it’s time to let it go.
Honestly, we should just create more power plants (nuclear) and shove solar/wind/battery to the side accept for those that really want the hassle.
Realistically though, we aren’t going to do that. We have to look to what the third world is doing (buying Chinese solar panels and batteries), because that’s where we’re headed.
If a grid is dominated by nuclear, how does it cope with massive intraday demand shifts ?
That’s the exact same thing. The homes need even more batteries if they can’t rely on the grid, and hundreds of millions of homes switching to grid power when they run empty is just as unmanageable.
No, it’s a completely different thing. A million people with battery banks are under no obligation to cooperate with each other, so cascading failures are impossible and there is zero management overhead. If your batteries run flat, your lights go out. Oh well, should’ve planned better.
So what exactly am i going to do with the forced solar up here north? In the summer i use barely any electricity, mostly for the TV and fridge. And in the winter, the panels are under snow, and in the spring and fall the sky is covered in clouds.
Solar up here is good for summer cottage, if you want to have a TV and maybe a fridge with a battery backup.
You can buy some electric cars and charge them in summer then use electricity during winter. It doesn’t take a genius to figure out there are 12 V to 230 V converters available in physical stores and on Amazon. But of course it’s better to complain about everything and burn fossil fuels, ruining the future for young people.
Buying solar in my example was intended as a catch-all for making your own electricity, because solar is the cheapest and most common way to do this. Use whatever power source you have at hand. If you don’t have any, consider moving (if you want electricity, that is).
The green people’s point is we in the north, just need to fire up our gas/diesel generators in the the back yard to power/heat our homes in the winter. Or go back to burning coal or wood in every home when 40 below zero… Can you imagine? No, give me natural gas and electricity from the grid. More efficient and cost effective for reliable home use. Breath better too. And not as much to ‘maintain’ (no batteries, no panels, no leaks if roof mounted, cleaning, etc.) — just steady state reliable power fed directly to you and me. The green people have rose colored glasses with no basis in reality.
Considering all the wildfires we’ve had lately, harvesting some of that wood for fuel use would probably be environmentally friendly. Cleaner forests = less fires.
Gen IV nuclear fission reactors need to be built and taken seriously.
If you want wind and solar to be of ANY use, especially where load managment is concerned, they should be used to add power to the off peak storage equation. Gravity or Hydro storage for best use. That way the intermittent availability of those forms of energy would be offset by the fact that they don’t contribute directly to what we call power generation.
As the information age enters what will be the next big leap where data centers are going to gobble up gigawatts of energy we need to get serious about what we can do. We should use the waste heat the data centers generate to heat water as needed for any number of things instead of dumping it to the atmosphere or waterways.
But please yes, let’s just put on those rose colored glasses and think that the “green energy” that we’re being sold is the answer to everything. I am sorry to say it is not. A part of a solution perhaps, but even then I’m not convinced.
I agree. What we can do is turn off the data centers.
Yep. Along with bit-coin operations…. Ie. There must be better uses for energy than VMs in the cloud, applications (like AI ) and the data centers to power them. All comes down to another way to get my dollar (and yours) in someone else’s pocket — and making us think we need it. Solutions to non-existent problems.
Those who didn’t see, the California test was truly impressive. Home batteries, not designed for the purpose, provided more energy for the two hour peak than all but 10 countries in the world.
I support the “all of the above.” Solution set. Anyone who champions a single solution is selling something, not solving the problem, and that includes nukes.
I support nuke programs, but the are installed at the root of the grid, and in many places there isn’t a lot of extra carrying capacity.
Energy storage, added at the tips of the grids branches, generate the power where it is used, avoiding grid capacity issues and significant transmission losses.
In California, today, we have enough solar that during summer days we are dumping into other grids (you’re welcome). Right now it is very difficult to find a vendor who will sell storage without solar generation, but that’s what this market actually needs.
For nukes to be installed there are some unresolved problems. My favorite idea is to build a suite of gen4 types on the Nevada Test Site. It has the security facilities in place, it only requires federal permitting, the most viable waste storage available is actually already in their fence. Finally, as the Colorado river hydro declines (off by more than 60% from its peak), it is vacating the grid that runs from the Hoover Dam. One of the only places that could actually tack more trunk generation….
Distributed electricity storage to satisfy distributed demand doesn’t sound that crazy. Even if the battery only feeds your own house, being able to reduce load on demand should help balance the production vs. consumption on grid level.
That said, this does not necessarily have to be a fancy virtual plant, it could just be simple grid frequency controlled switching. The problem VPPs are trying to solve is getting money to those who pay for the investment.
One can easily imagine a future with distributed generation and distributed storage where the grid is essentially used for more localized load levelling, with peak demand capacity a much much lower number than the current architecture where bother generating capacity and grid capacity both have to be able to handle the extremes of peak demand.
The question isn’t is this possit, but rather, how do we get there from here?
Given governments privatization of energy systems where I live, and the abundance of sunshine. I will be part of a vpp to help me payback my investment. But fundamentally I invested in solar, battery and v2h ev because I dont want to be at the mercy of private grid operators any more. For my use case, I will rarely need even trickle feed from the grid so if they make that a headache I will just by a generator.