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Description

The increasing usage of renewable energy raises the risk of unpredictable energy generation drops or peaks. A virtual power plant reduces these risks by aggregating several small production units. Besides balancing (unpredictable) sustainable energy supply and demand in neighbourhoods, it improves the yield of energy generation units as it enables households to store and/or trade surplus energy. A virtual power plant incorporates energy generation units, load and battery systems. As an online platform, the virtual power plant aggregates people’s production and consumption of energy and stores the surplus locally. Due to this aggregation, it’s possible to trade energy on the wholesale markets: the use of a home battery lets you store energy when electricity prices are low and discharge the battery when there are high. Overall the virtual power plant is able to monetize flexibility and minimizes the risk of shortages in supply by using a different set of functions. 

Benefits

The increasing usage of renewable energy raises the risk of unpredictable energy generation drops or peaks. A virtual power plant reduces these risks by aggregating several small production units. Besides balancing (unpredictable) sustainable energy supply and demand in neighbourhoods, it improves the yield of energy generation units as it enables households to store and/or trade surplus energy.

Main Benefits
  • Reducing operation costs

  • Enhances grid stability

  • Improving energy supply efficiency

  • Reducing energy bills

Functions

Functions help you to understand what the products can do for you and which ones will help you achieve your goals.
Each solution has at least one mandatory function, which is needed to achieve the basic purpose of the solution, and several additional functions, which are features that can be added to provide additional benefits.

Mandatory Functions
    controlling energy generation

    Products controlling the local generation of energy through renewable sources

    managing energy distribution

    Products managing the energy consumption time-wise and for several devices through an ICT-infrastructure

    Bosch Group
    Virtual Power Plants
    enabeling bilateral grid communication

    Products enabling the communication between the virtual power plant and the grid to receive and sell energy

    Bosch Group
    Virtual Power Plants
Potential Functions
    storing energy

    Products saving energy, such as home batteries, to enable the system to shift the energy generation and consumption or selling time-wise

    Bosch Group
    Energy storage solutions
    predicting energy consumption

    Products giving future predications on the energy consumption, for example due to seasonal or personal impact

    predicting energy generation

    Products giving future predications on the local renewable energy generation, for example due to weather conditions

    informing user about possible improvements in their energy consumption

    Products informing inhabitants about their current energy consumption and the source of the consumed energy, as well as possibilities to improve their consumption financially or to reduce their environmental impact

    allowing user input on future energy demand

    Products enabling inhabitants to adjust the prediction on their future energy consumption

    predicting energy prices

    Products giving predictions on the development of energy prices, for example depending in the daytime or seasonal consumptions

Business Model

Implementation Facts

Average Implementation Time: approximately 0.5 - 1 years 

 

Market Overview

The virtual power plant market will grow from less than US $1 billion per year in 2013 to $3.6 billion annually by 2020, according to Navigant's research. One reason, therefore, is the increasing spread of renewable energy sources, which requires an increased grid flexibility. (Navigant, 2014)

 

Marketable Outcomes

The marketable outcomes of a virtual power plant are mainly

  • monetary benefits in optimising the energy usage depending on varying prices,
  • the increased security of energy supply,
  • sustainability and
  • the grid stabilisation

Implementing the solution without storage, the own energy usage of a residential energy generation system (with equal yearly production and consumption) can be reduced approximately 30 %. With a battery, it is possible to upgrade the savings of 30 % own use to potential energy savings of 60 %. Anyway energy losses by the system need to be accounted.

The implementation of a virtual power plant changes the structures of the energy market. The current energy regime is a top-down system. Energy suppliers own production units and thereby are in possession of power and benefits. In a bottom-up energy system the virtual power plant enables the power shift from energy suppliers to prosumers: creating revenues and possibilities for end-users on a level playing field with energy suppliers. (City-zen, 2016)

 

Functionalities:

The graphic below shows the main assets of a virtual power plant. Through a computational system, all impacts on the virtual power plant are monitored and controlled. As visible in the graphic, the system depends mainly on the energy markets, the external data and the decentralized energy producers and consumers.

(Next Kraftwerke, 2017)

Driving Factors

Supporting Infrastructure

Some necessary or additional features of the solution might already be installed in some areas, all the infrastructure named below can also be installed partly or as a whole within the implementation of the virtual power plant.

  • ICT infrastructure as smart meters or smart grids to enable the communication and optimization of the generation systems, the consumptions and the grid
  • Home batteries to enable the storage of energy
  • Local renewable energy generation systems, such as private solar panels 

(City-zen, 2016)

 

Government Initiatives

  • Horizon 2020 Societal Challenge "Secure, clean and efficient energy" to the focus area "Building a low-carbon, climate resilient future" (European Commission: Horizon 2020)
  • A supporting governmental initiative for virtual power plants in future, which is already discussed in some European cities, is to promote open protocols for battery system (City-zen, 2016)

Legal Requirements

Regulation

  • IT-security regulations
  • Market regulations need to have variable energy prices available for consumers
  • Net metering has a negative effect on the business case of the virtual power plant

(City-zen, 2016)

Use Cases

Virtual Power Plant in Mülheim

"The solution consists of a virtual power plant which connects local photo-voltaic production, heat pumps and batteries. A charging station for electric vehicles is also be integrated into the system. It lowers the demand for external energy by increasing energy self sufficiency of buildings.

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Local Energy System

Approximately one-quarter of the energy price is owed by the transportation of the energy. The implementation of a local energy system can shift the energy production from a centralised system to a decentralised system.