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Grid reliability is becoming increasingly crucial as extreme weather increases. The California heat wave in 2022 and the deep freeze in Texas in early 2021 both showed how vital having reliable power is — and the power grids during these two events fared wildly differently in terms of protecting people and property.
One reason California was better able to respond is that it took advantage of Virtual Power Plants (VPPs) to keep the grid from becoming overtaxed, and therefore didn’t have to resort to rolling brownouts. VPPs are essentially an array of small-scale, networked energy assets that can support the power generated in the grid.
But grid reliability is only part of the benefits story for VPPs. They also have a climate story, because when VPPs are deployed, they’re generating and distributing energy from non-fossil fuel sources.
We recently spoke with Connor Usry, co-founder of the Virtual Power Plant Partnership (VP3) and a senior associate at RMI’s Carbon-Free Buildings Electricity team, about why VPPs will continue to flourish.
FacilitiesNet: Can you explain the most basic definition of Virtual Power Plant?
Usry: Virtual power plants are portfolios comprised of hundreds or thousands of households and businesses that offer the latent potential of their electric vehicles (EVs), smart thermostats, appliances, batteries, solar arrays, and additional energy assets to support the grid. When aggregated and coordinated with grid operations, VPPs can provide the same reliability value as traditional power plants by enabling rapid and flexible deployment, reducing demand, or feeding power into the grid during times of critical demand. While VPPs aren't new, they have a growing role to play in providing resiliency and reliability services in a world of increasingly extreme climate events.
FacilitiesNet: How does VPP differ from islanding or micro-gridding?
Usry: Islanding or micro-gridding are concepts that refer to a section of the power system (household, business or collection there-of) in a single location which has the ability to operate independently of the main grid. Microgrids contain a local power source (solar/storage/wind…etc.) which allow them to isolate or “island” from the larger electrical grid to ensure resiliency or provide cost savings. VPPs are designed to operate as part of the larger grid, whereas micro-gridding is designed to isolate from it. That said, in many cases, a microgrid can participate as part of a virtual power plant by reducing its load from the grid or injecting power when called upon to do so.
FacilitiesNet: What are the biggest advantages of implementing VPP in commercial facilities?
Usry: The biggest advantages to participating in a virtual power plant in a commercial facility are:
FacilitiesNet: How does rising facility technology like IoT and other advances in building management systems affect VPP implementation?
Usry: Advancements in facility technologies — like building management systems or general IOT — have a significant impact on VPP implementation.
FacilitiesNet: What cost savings can be achieved by implementing VPP?
Usry: VPPs directly compensate participating customers, while also driving down electricity costs for all consumers by reducing the total cost to operate the grid. VPPs can help the power sector avoid $17 billion in bulk system costs by 2030. (Source: RMI)
Greg Zimmerman is senior contributor editor for the facility group, which including FacilitiesNet.com and Building Operating Management magazine. He has more than 19 years’ experience writing about facility issues.