Asia Pacific Explores VPP Opportunities to Unlock Resiliency: Part 1

As the pandemic continues to create global disruptions, most governments and stakeholders across the energy sector are working out different measures to ensure they can meet customer needs. Governments and stakeholders in developing and emerging countries are no different. While Asia Pacific is also preparing for economic disruptions and building efforts to flatten the curve, a resilient power and electricity supply is needed to prevent any additional disruptions.

Distributed Energy Resources Bolster Grid Resiliency

Rapid development of distributed energy resource (DER) technologies and accompanying software, along with evolving grid pain points, drives the growth need for flexible capacity and the need to meet resiliency demands across the region. Business continuity in Asia Pacific’s energy industry can be supported by increasing the adoption of distributed generation assets controlled by virtual power plants (VPPs). They can offer both flexibility and optimization for end consumers. Guidehouse Insights defines VPPs as “A system that relies on software and a smart grid to remotely and automatically dispatch DER flexibility services to a distribution or wholesale market via an aggregation and optimization platform.”

The Coupling of Consumer and Utility Value with VPPs

 (Source: Sunverge Energy)

VPPs Transform Consumers into Prosumers

VPP platform implementation and market maturity vary drastically across Asia Pacific. Markets like Australia, South Korea, Japan, and New Zealand are at the forefront of embracing VPPs. Countries in Southeast Asia, such as Thailand and Vietnam, are exploring the value of VPP solutions. While in emerging markets like Malaysia, VPPs can help transform passive energy consumers into active prosumers, delivering services tailored to both their needs and preferences and those of the larger grid. As the market for VPPs develops in Malaysia, an intelligent orchestration of distinct resources supported by reliable VPP technologies can help the country transition into the Energy Cloud 4.0.

Total VPP Market Revenue, World Markets: 2020-2029

 (Source: Guidehouse Insights)

The core technology of a VPP is the software platform it uses to aggregate and control DER. The ability to harness the two-way flexibility takes place through a platform that provides the software and smart grid optimization to support essential grid services. This process helps offer the much-needed flexibility to create a resilient energy infrastructure. The changing distributed energy landscape and supporting macro trends create new opportunities along the entire supply chain, regardless of market maturity in Asia Pacific.

In the next installment of this blog series, Guidehouse Insights will explore interesting VPP solutions and business model applications under development in Asia Pacific.