5) Demand Response for Utilities via Virtual Power Plants
Through the VPP (Virtual Power Plant), many decentralised energy production or consumption units are aggregated with the help of advanced communication technology. In this, every asset – solar, wind, small hydro plants, biogas, etc. – can be navigated via a central control room. Through this, flexibility is integrated till the level of the required minimum power, which allows smaller resources to actively participate in the flexibility market. Flexibility boosts grid stability through proper energy production and consumption balancing, even with disparate prices. It also prevents peak power charges, generates additional income and promotes energy security.
Generally, a VPP is segmented as per technology into different segments: demand response, distributed generation and mixed asset. Analysts believe the demand-response segment will rule global markets. Demand response arises when consumers curb or shift power usage during peak hours at specific times reacting to changes in electricity pricing or due to incentive payments that encourage lower usage when wholesale prices are high. Therefore, the end-consumer’s participation is dependent upon tariff schemes, incentive pricing and greater awareness of the same, which motivates more discretion.
Based upon the above systems, individual consumers can contribute immensely in supplying power to the Grid and using energy responsibly.
1Energy efficiency 2.0, The Hindu Business Line, 11 April 2017