Over the past few decades, the price of solar photovoltaic (PV) modules has fallen by a staggering 80%, while installed capacity has increased from 40 GW to more than 600 GW. This significant shift highlights the huge white space opportunity in the Virtual Power Plant (VPP) industry.
According to the International Energy Agency (IEA), the global energy landscape would have been heavily invested by 2023, with an estimated US$2.8 trillion allocated to energy companies. Nuclear power, electric vehicles, and efficiency improvements. It is worth noting that the US, Germany, the UK, France, and China have emerged as the major revenue drivers in the global VPP market, accounting for more than 70% of the global market.
Key drivers of the global VPP market
Renewable energy sources such as solar and wind are becoming more popular around the world as we move away from fossil fuels. Virtual Power Plants (VPPs) use resources such as rooftop solar panels and wind turbines to increase production capacity due to their ability to combine these resources.
Rising investments in adopting smart grids
A smart grid is a modern electricity grid that improves stability, reliability, and resilience by improving communication between producers, consumers, and operators. VPP integrates seamlessly with smart grids to optimize grid operations by managing energy flows from Distributed Energy Sources (DERs) such as solar panels and batteries.
Growing global demand for electricity
Electricity demand continues to grow due to population growth, economic development, and urbanization. VPP helps meet this demand by combining distributed energy sources to provide reliable power, thereby contributing to grid stability and resilience. As the demand for electricity increases, virtual power plants play a crucial role in ensuring a sustainable and efficient electricity supply.
Advantages of VPPs
Distributed Energy Resource (DER): DERs are decentralized energy sources like solar panels and wind turbines. Virtual Power Plants (VPPs) combine these resources to enhance grid stability and integrate renewable energy efficiently.
Demand Response (DR): DR involves adjusting electricity usage in response to grid conditions. VPPs with DR capabilities help balance the grid by shifting energy consumption during peak demand, benefiting both utilities and consumers.
VPPs benefit end-users
Industrial: Factories and manufacturing facilities benefit from VPPs by ensuring reliable power and optimizing energy usage to meet high demands efficiently.
Commercial: Offices, retail spaces, and commercial buildings use VPPs to manage energy costs, enhance grid resilience, and promote sustainability through technologies like rooftop solar panels and battery storage.
Residential: Individual homes participate in residential VPPs, contributing excess solar energy and adjusting consumption to support community-based energy sharing and transition to cleaner energy sources.
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