VPP Platform Providers Enhance Their Solution Offerings

As new market frameworks are implemented around the world, use cases for distributed energy resources (DER) aggregations like virtual power plants (VPPs) will continue to expand. When DER adoption reaches a critical threshold in a service area, new software platforms will be required to successfully manage and control the assets in such a way that grid reliability is not compromised. In many instances so far, this has meant the utility or grid operator acquires the software platform from the provider and, after some initial setup and integration time, is responsible for operations involving the new platform. With the continued proliferation of DER, however, some flexibility platform providers are looking to expand their offerings beyond just the aggregation and optimization platform to enhance the experience for utilities and grid operators.

Going beyond Software as a Service

Many VPP platform vendors have recognized the advantages of offering a centrally hosted platform through a software as a service (SaaS) model instead of requiring the platform be installed on premises. However, to successfully deploy a VPP, numerous additional aspects must be addressed on top of acquiring the flexibility management platform itself. Things like customer outreach and recruitment, program design, hardware installation, incentive processing, and market participation are essential to ensuring successful VPP operations. While some larger utilities may have the financial and personnel resources to use a SaaS VPP platform to set up and manage their own VPP, smaller, more resource-constrained utilities may be hesitant to pursue that option.

Evolving from a SaaS to a full-service or turnkey VPP solution enables platform providers to lower the barriers to entry for VPPs. Bundling additional VPP deployment services effectively outsources some of the complexity associated with standing up and operating a VPP for the utility interested in launching one, potentially making the proposition more attractive. While expanded solution offerings would come at a higher cost compared with pure SaaS offerings, the additional services and reduced spin-up time to deploy a VPP may make it a worthwhile investment for energy providers given the reduction in required internal effort.

A Changing Grid Requires New Technology for Proper Management

The power grid is shifting from a one-way power flow model dominated by centralized fossil fuel power plants to a two-way model in which customer-sited DER are regular contributors to grid operations. This shift requires utilities and grid operators to adopt new methods and technologies like VPP platforms, along with other grid modernization solutions like advanced distribution management systems (ADMS), DER management systems (DERMS), and advanced metering infrastructure (AMI) to maintain grid stability and reliability. While VPPs enable new use cases for customer-sited DER, DERMS, ADMS, and AMI give utilities greater insight into behind-the-meter operations, potentially mitigating some of the risk they associate with DER adoption and further expanding the role customers can play in daily grid operations. Given the critical nature of grid operations and the industry’s risk-averse tendencies, novel software platform providers will need to continue to adapt their solutions accordingly to facilitate wider platform adoption and ensure flexible capacity meets the same availability and reliability requirements of traditional power plants.