Power grid expansion & upgrading is critical to meeting climate targets [DNV, 2023]
The electric grid has evolved since the 2000s adding more and more intelligence to the grid, becoming a "smart grid". Today, many IT-based automated systems (and associated field devices) work together to manage & integrate the energy subsystems (generation, transmission, distribution, and storage).
More recently, climate agenda has pushed the adoption of variable renewable energy (VRE) sources, which are (much) more complicated to be integrated into the power grid. In this scenario, the grid must be able to handle intermittent power output of the VRE sources, as well as variable, bidirectional energy flows btw generation units & consumer's units, meaning that a "new" power grid must be built.
Solar & wind are the new building blocks of the power grid of tomorrow, increasingly replacing the sync generators, which compromisses the grid frequency stability rendering traditional inertia response mechanisms (based on energy stored in large rotating generators) & analysis methods insufficient.
Grid flexibility concerns the power systems ability to manage changes in supply & demand: many techs contribute to this, such as [DD, 2023]:
Constant renewables, such as hydropower.
Utility-scale storage, such as pumped hydro and molten salt.
Small-scale storage, such as Li-ion batteries.
Demand-response tools, such as smart thermostats & smart appliances, to mediate peaks in demand.
Inverter-based resources - IBR
The challenges of operating w/ high shares of inverter-based resources (IBR) in grids with low system strength & low inertia (due to the decreasing presence of sync generators) should be highlighted. At higher levels of VRE sources (and, consequently, IBR) penetration, new advanced inverter controls, based on grid-forming (GFM) techs, will be needed to maintain the system stability.
Electricity system is moving away from the centralized paradigm to a decentralized & bidirectional one. The grid edge (“edge” means the proximity to end-use customers) comprises techs, solutions & business models enabling the transition toward a decentralized & distributed electric grid. Grid edge techs are important tools to facilitate higher penetrations of renewable energy and to mitigate climate change.
Grid edge, the interface btw the grid and the distributed end users, encompasses a wide range of techs & services, from electric vehicles to heat pumps, and solar panels to home batteries. Grid edge techs enables energy autonomy, unlocks new economic opportunities or manages renewables & DER, and can also support resilience and allow power to be restored more efficiently after natural disasters.
One of the most promising advances of grid edge techs are "microgrids" & "virtual power plants" (VPPs).
In this grid-shifting context, microgrids has emerged as a viable alternative to conventional utility grids in providing reliable, secure, and sustainable power supply to a group of consumer units (an island, a campus, or a remote community) [CS, 2021]. They are not fundamentally different from "macro" grids: microgrids support smaller loads, serve fewer consumers, and are deployed over smaller areas.
A microgrid is a local energy grid that can operate independently or in conjunction with the main power grid. By providing voltage & frequency support, microgrids can move away from the main grid in the event of failures or emergencies: flexible, they can also inject power into the grid, or even participating in VPPs.
Midcrogrids can be classified into grid-tied (fully served by an electric utility) & off-grid (or islanded mode, used in remote environments). Off-grid microgrids are constructed where there is a need for electricity (rural areas, islands) but no access to a wide-area electrical grid [CS, 2021]. Categorized microgrids also include single or three-phase, low or médium-voltage connected.
Another classification has to do with the direction of the current flow: they can be AC (“Alternating Current” - more widespread) & DC (“Direct Current” - w/ higher conversion efficiency & transmission efficiency due to no reactive current) microgrids. Figure 1 shows a typical microgrid architecture.
Mobile microgrids insure reliable power for applications in remote destinations (like oil drilling & mining) or that require mobility and rapid deployment, such as disaster relief efforts. Containerized mobile microgrids are often a vessel to provide power for members of the community who don’t have power at their homes but may need hours-worth of power for critical medical equipment like oxygen concentrators.
Virtual power plant - VPP - the future of clean energy
A virtual power plant (VPP) is a cloud-based distributed power plant that aggregates the capacities of heterogeneous distributed energy resources (DER) for the purposes of i) enhancing power generation, ii) trading or selling power on the electricity market, and iii) demand side options for load reduction. VPPs use an intelligent control system & bidirectional technology to aggregate energy from networked resources located at multiple sites, bundling together hundreds of discrete power sources into one during times of peak demand, just as a centralized power plant would [MK, 2023].
The VPP concept emerged in the late 1990s and is increasingly seen as a viable solution to grid problems & challenges related to the integration of large quantities of intermittent renewable energy sources (RES). into the existing electrical grid in an economical manner. VPP can replace a conventional power plant while providing higher efficiency & flexibility, which allows the system to react better to load fluctuations.
Different energy assets can be aggregated into a VPP [ENELX, 2023]:
Flexible load: refers to the management of electricity demand (consumption) to match the supply of electricity.
Battery storage: enable organizations to allow consumers to use energy stored during periods of low electricity prices or energy stored by renewable energy sources.
On-site solar: help to reduce the volume of electricity purchased from the grid; depending on the contract program, excess solar can be exported back to the grid.
Electric vehicles (EVs): just like batteries, smart EV charging can respond to grid signals and allow EV owners to shift their charging time from high electricity prices periods to low electricity prices.
Benefits of VPPs include the ability to deliver peak load electricity or load-following power generation on short notice (obs.: load-following power plants usually run during the day & early evening, and are operated in direct response to changing demand for power supply).
According to WoodMac, CPower, Enel, AutoGrid, Voltus (one of only six firms listed in all three categories: Market Interface, VPP Operator, and DER Platform) dominate virtual power plant market. In the U.S., more than a quarter of virtual power plants in North America are in California, which hosts more than the next three states combined (is home of 140 of the 500 VPPs operating in North America). The four largest VPP managers, which all operate in California, have together accumulated 4,000 MW [UD, 2023].
Figure 2 shows the Cpower VPP vision. Figure 3 shows Voltus VPP platform that aggregates DERs into VPPs and sells services (energy, ancillary services & capacity) to grid operators, while shares a portion of that cash with its partners. In short, VPPs are a recent market construct for which there is much discussion but little data.
Microgrid vs VPP
Both microgrids and VPP involve the integration of distributed energy resources, the main difference lies in their purpose & operation. Microgrids are typically designed to provide reliable & resilient power to a specific area, while VPPs are focused on i) reducing costs, ii) providing grid services, and iii) supporting the integration of renewable energy into the grid [EP, 2023].
Concomitantly, driven by solar, wind & battery systems price drops, and increasing climate-change driven natural disasters, a relatively large number of consumers are thinking about disconnecting from the grid and investing in their own energy systems to achieve full energy autarky.
Figure 1: Microgrid architecture
Figure 2: VPP vision (CPower)
Figure 3: Voltus VPP platform