Virtual Power Plants Can Create Energy Independence for Countries

Energy independence is often associated with reducing an entity’s dependence on the larger electric grid. But in a global energy landscape where many countries rely on fossil fuel imports of oil and natural gas from other countries, virtual power plants (VPPs) offer a chance to expand on the definition of energy independence. At scale, VPPs with distributed energy resources (DER) have the potential to offer energy security to entire cities, regions, and countries by using only the resources available to them, eliminating their reliance on other countries.

Fossil Fuels Require Inter-Country Cooperation

Global energy headlines in the latter part of 2021 and early part of 2022 have been dominated by articles related to Russia and the Middle East limiting their exports of oil and natural gas despite soaring energy prices around the world. The Russian invasion of Ukraine in February 2022 also highlights how fragile an energy market shaped by reliance on foreign fossil fuels can be. In response to the invasion, Europe and the US have issued severe economic sanctions against Russia, including Germany halting certification of the Nord Stream 2 natural gas pipeline. Russia relies heavily on revenue from its energy exports, spurring recent calls for the US and Europe to ban all Russian energy imports, which has prompted Russia to threaten retaliation. Because about one-third of Europe's natural gas consumption and one-quarter of its crude oil imports are met by Russian resources, any reduction in Russian energy imports would significantly affect energy prices in the region. European nations could look elsewhere for energy sources in the interim, but it could be difficult to find alternatives that cover all of the region's needs on short notice.

An energy economy based on fossil fuels requires some countries to import supply from others if their domestic supply can’t meet their demand. While this system may work well during peaceful times, history has shown that no regions of the world are immune to tensions and turmoil. External factors such as geopolitical conflicts, government changes, global health crises, and economic sanctions can impact the availability of fossil fuel supplies and the willingness of countries to export them.

VPPs Can Overcome Natural Resource Limitations

Worldwide, jurisdictions are shifting from a centralized generation model powered by fossil fuels to one reliant on DER powered by renewable sources. Mixed-asset VPPs integrate a range of supply and demand side resources to maintain grid stability and reliable operations. VPPs capitalize on periods when renewable supply outpaces demand by capturing zero-carbon energy and using it at a later time or shifting demand through load flexibility so that it matches current renewable supply. VPPs thereby increase the flexibility of the power grid, enabling it to respond better to changing conditions and unexpected disruptions. The result is minimizing and potentially eliminating the need to import energy supply from other countries.

Utilities and grid operators should consider looking to DER management systems and VPPs to take full advantage of existing DER capacity on their grids in daily operations. DER vendors and aggregators must actively engage with customers to educate them about how DER can benefit their lives while helping the grid transition away from fossil fuels. This will encourage widespread adoption and increase the pool of resources available for grid operator use. VPPs offer the opportunity for nations to boost their energy security by becoming energy self-sufficient regardless of the natural resources available within their borders.