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1Q 2022

Market Data: Country Forecasts for Virtual Power Plants

Capacity, Implementation Spending, and Revenue Forecasts in Select Markets

Virtual power plants (VPPs) have gained significant traction across all customer segments in recent years as distributed energy resources (DER) deployment continues to increase. The variable and non-dispatchable nature of renewable energy sources such as wind and solar has highlighted the issue of supply and demand mismatch in the transition away from fossil fuels. VPPs can aggregate and dispatch hundreds or thousands of DER assets to balance the grid when renewable output is not sufficient, effectively acting like a traditional 24/7 power plant.

The VPP market is segmented into three types: demand response (DR) VPPs, supply-side VPPs, and mixed-asset VPPs. The VPP market is trending toward the mixed-asset model because of its ability to use supply, demand, and energy storage resources to serve the grid. The continued growth of DER deployments, electrified end uses, and digitalization along with increasingly aggressive climate goals in response to the climate emergency have driven the VPP market. At the same time, high system and DER costs along with concerns over privacy and cybersecurity remain barriers to growth.

This Guidehouse Insights report examines the VPP market in five select countries across North America, Europe, and the Asia Pacific region. Regional-level forecasts for Latin America and the Middle East & Africa are also presented. Individual forecasts segment capacity by VPP type and show total VPP spending and revenue in each market from 2022-2031.

Pages 36
Tables | Charts | Figures 22
  • What is the role of VPPs in the energy transition?
  • Which countries have the most established VPP markets?
  • How do the types of VPPs differ?
  • Which VPP segment is growing fastest?
  • What is driving VPP adoption?
  • What is hindering VPP growth?
  • What can be done to facilitate VPP adoption?
  • Grid operators
  • Utilities
  • VPP platform providers and aggregators
  • Demand response vendors
  • Energy storage companies
  • DER vendors and integrators
  • IoT vendors
  • DERMS vendors
  • Regulators and policymakers
  • Investor community

1. Executive Summary

1.1      Virtual Power Plants

1.2      Market Drivers

1.3      Market Barriers

1.4      Market Forecast

2. Market Issues

2.1      Virtual Power Plant Market Definitions

2.2      Market Drivers

2.2.1     Growing DER Adoption

2.2.2     Climate Goals and Increased Renewable Energy Deployments

2.2.3     End Use Electrification and Digitalization

2.2.4     New DER Regulations and Business Models

2.2.4.1   US

2.2.4.2   UK, Germany, France, and Italy

2.2.4.3   Australia and Japan

2.3      Market Barriers

2.3.1     Customer Outreach and Education

2.3.2     Customer Privacy and Cybersecurity

2.3.3     System and DER Costs

2.3.4     Transmission and Distribution Competition for Flexibility

3. Market Forecasts

3.1      Market Overview and Assumptions

3.2      Forecast Scope, Market Sizing, and Methodology

3.3      VPP Project Share as of 1Q 2022

3.4      VPP Forecasts by Select Countries

3.4.1     North America

3.4.1.1   US

3.4.2     Europe

3.4.2.1   Germany

3.4.2.2   UK

3.4.3     Asia Pacific

3.4.3.1   Australia

3.4.3.2   Japan

3.4.4     Latin America and the Middle East & Africa

3.4.4.1   Latin America

3.4.4.2   Middle East & Africa

4. Conclusions and Recommendations

5. Acronym and Abbreviation List

6. Table of Contents

7. Table of Charts and Figures

8. Scope of Study, Sources and Methodology, Notes

  • VPP Capacity by Select Country or Region, World Markets: 2022-2031
  • VPP Project Share by Country or Region, World Markets: 1Q 2022
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, US: 2022-2031
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, Germany: 2022-2031
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, UK: 2022-2031
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, Australia: 2022-2031
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, Japan: 2022-2031
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, Latin America: 2022-2031
  • VPP Capacity, Implementation Spending, and Revenue by VPP Type, Middle East & Africa: 2022-2031
  • California Independent System Operator Net Load Chart: The Duck Curv
  • VPP Capacity by Select Country or Region, World Markets: 2022-2031
  • VPP Project Share by Country or Region, World Markets: 1Q 2022
  • VPP Implementation Spending by Select Country or Region, World Markets: 2022-2031
  • VPP Revenue by Select Country or Region, World Markets: 2022-2031
  • VPP Capacity by VPP Type, US: 2022-2031
  • VPP Capacity by VPP Type, Germany: 2022-2031
  • VPP Capacity by VPP Type, UK: 2022-2031
  • VPP Capacity by VPP Type, Australia: 2022-2031
  • VPP Capacity by VPP Type, Japan: 2022-2031
  • VPP Capacity by VPP Type, Latin America: 2022-2031
  • VPP Capacity by VPP Type, Middle East & Africa: 2022-2031
  • VPP Forecast Assumptions
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Industry Insight Jun 23, 2020
Mixed-Asset VPPs Are Key to Supporting California Clean Energy Goals