"Virtual power plants enable utilities to stretch supply from power generation and demand response, without requiring any large-scale infrastructure upgrades," says senior analyst Peter Asmus. "This approach delivers greater value to the customer while also creating benefits to the host distribution utility as well as the transmission grid operator. When compared to the fossil fuel based centralized power plants that dominate electricity markets worldwide, one of the primary advantages of VPPs is that they can react quickly to changing customer load conditions, all in a dynamic and real-time fashion."
Pike Research divides the VPP universe into four distinct segments:
- Demand Response-based VPPs: This is the largest commercial segment in the United States, which has the most mature DR market in the world.
- Supply-side VPPs: Europe, particularly Germany, has led the world in this category, though most of the projects have been R&D pilots, with only a handful of VPPs in commercial operation.
- Mixed asset VPPs: This is the ultimate goal of the VPP. This segment brings distributed generation and DR together to provide a synergistic sharing of grid resources to squeeze out more value, thereby reducing capital costs. Few of these projects are in commercial operation today.
- Wholesale auction VPPs: Unique to Europe, VPP auctions have been used in the region as a condition of mergers, requiring asset owners to auction off base load and peaking capacity to bidders under short- and long-term contracts. Unlike the category of the supply-side VPP segment, these resources are typically traditional centralized power plants burning fossil fuels.
Pike Research's study, "Virtual Power Plants", provides a comprehensive analysis of global market opportunities and growth prospects for virtual power plants including a detailed examination of business models, technology issues, and regulatory and policy factors. Key industry players are profiled, including SWOT analysis for utilities and technology providers active in the VPP sector. The report also features global market forecasts, segmented by region, for capacity and revenue in four key VPP segments through 2015.
Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets. The company's research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Clean Transportation, Clean Industry, and Building Efficiency sectors.
source: Pike Research