Oct 13, 2020

Virtual power plants: Flexible energy for the digital era

virtual power plant
Smart Cities
William Girling
6 min
Energy Digital investigates the concept of VPPs, and how they are revolutionising energy by providing a wealth of benefits to operators and consumers
Energy Digital investigates the concept of VPPs, and how they are revolutionising energy by providing a wealth of benefits to operators and consumers...

A truly exciting development for the energy sector in the digital era, virtual power plants (VPPs) are complex, decentralised, interconnected networks of power generating assets unified at a central point. Primarily created from renewable power sources, such as wind turbines, solar photovoltaic (PV) parks, hydroelectric generators and combined heat and power units (CHPs), VPPs truly capture the modern race for cleaner sources of energy by making their widespread adoption more feasible than ever. A relatively new concept, it is no coincidence that the emergence of VPPs coincided with the availability and sophistication of modern cloud platforms.

Prior to the creation of VPPs, a burning question for the industry was how best to use renewable energy sources and support existing grid infrastructure. However, by linking assets into a unified network, operators now have the ability to closely monitor, analyse, predict and plan consumption in a manner that minimises excess generation and carefully meets energy requirements. The data used by operators can include weather information, equipment status monitoring, the angle of PV modules and more. Combined with battery storage units, energy bottlenecks - where a surplus of energy creates unused waste power - can be diffused, with the excess being used during peak hours to maintain a consistent service later.

As cloud and other technologies associated with VPPs (data analytics, IoT, 5G networks, etc) continue to improve, it is likely that the market demand will follow close behind. Valued at USD$1.3bn in 2019, that figure is estimated to grow 354% to $5.9bn by 2027 according to Allied Market Research. Therefore, it is safe to assume that the most exciting iterations of the VPP are still to come.

Unlocking the grid’s potential

In its insight article ‘Decarbonising the grid: Stabilizing the future of renewables’, McKinsey emphasises VPPs, amongst other aspects of digital energy, as a valuable resource for unlocking the latent potential of inefficient grids: “VPPs are at the forefront of the flexibility landscape.”

The company states that entities such as German operator Next Kraftwerke (NK) have been able “to balance the intermittency of large-scale renewables with the flexibility of distributed energy assets, such as onsite generation, and load resources, such as large commercial and industrial facilities.”

Indeed, according to NK’s founders and CEOs, Hendrik Sämisch and Jochen Schwill, VPPs could be an indispensable asset in the battle to meet countries’ ever-growing energy requirements. Operating one of the largest VPPs in Europe, NK has a networked capacity of 7,142 MW, comprising wind, solar and biogas assets. “By harnessing the possibilities of digitalisation, we network thousands of power producers, consumers, and storage assets and put them on the markets with help from our power traders,” they say on their website. “We are certain that the demand for power in Germany can be completely covered with renewable energies by 2050.”


Accelerating the uptake of renewable energy

The advancement of battery storage units in tandem with VPPs has provided the impetus for an entirely new concept in energy: the customer as consumer and contributor, rather than merely the former. McKinsey notes in ‘Why the future of commercial battery storage is bright’ that there are two noteworthy benefits to VPPs made of storage units: “One is encouraging the use of solar by allowing its energy to be stored during the day and then released at night; another is back-up reliability and resilience.” Moreover, the aggregated solar units on customers’ homes could be used to sell energy back to the grid.

Indeed, this is exactly what German energy specialist sonnen offers: using its sonnenBatterie and ecoLinx products in conjunction with a PV installation, customers are able to satisfy as much as 75% of their annual electricity needs. From these high-tech examples of smart equipment, the company is able to transform its swathes of batteries into a manageable, sustainable and revenue-generating VPP. Now with a presence in Europe, the US and Australia, the company has begun several projects to explore the VPP concept on a community-wide scale, such as those in Utah, Arizona, Florida and Illinois

The newest of these - the Soleil Lofts apartment complex in Utah - was a partnership between sonnen, the Wasatch Group and Rocky Mountain Power. Featuring 600 ecoLinx batteries and PV setup capable of generating 12.6 MW of power, the VPP enabled Rocky Mountain Power to effectively manage energy during peak use, provide a reliable backup electricity supply and help the utility balance the overall usage of the grid.

“The combination of solar and long-lasting, safe, intelligent energy storage managed by the local utility is an essential component to the clean energy grid of the future. The solar industry should find inspiration in this extraordinary project, as it provides a blueprint for the future of grid optimized battery storage,” commented Blake Richetta, Chairman of sonnen Inc.


Enabling the next generation of smart homes, towns and cities

More than simply being restricted to small communities or individual households, VPPs have the potential to cause a paradigm shift in the way power is generated in smart cities. The same fundamental tech enablers found in common smart infrastructure is similar to VPPs: IoT equipment collecting and transmitting data to a centralised point (cloud), which is then optimised via artificial intelligence (AI) or machine learning (ML) computer algorithms.

The scalability of the VPP concept is being investigated by renowned innovator Tesla, which is currently in the process of building the largest example attempted so far, involving 50,000 average homes fitted with solar PVs, smart meters and Tesla Powerwall storage batteries.

Taking note of the less than desirable efficiency of the Australian grid and the country’s geographic, and meteorological advantages (there are practically no cities which receive less than 200 days of sunshine), Elon Musk stated in an interview with 60 Minutes that “Australia’s really perfect for solar power because it’s not too far north or too far south. You could have the entire country be solar power or some combination of wind, solar, geothermal, hydro…” The country’s suitability for an effective VPP established, Tesla soon began devising its approach.

Currently under development in South Australia with cooperation from the government, phases I and II of the trials - 1,100 households - has realised 2% of Tesla’s ambition and seeks to make evident the benefits of VPPs, namely:

  • Reduced energy costs
  • Better grid stability
  • Increased visibility for consumers on their energy use
  • An accelerated transition to an renewables-based economy

The installed solar PVs and Powerwalls are then group connected to Telsa Powerpacks: cutting-edge, scalable units with an energy capacity of 232 kWh each - thus forming the VPP. Unused electricity from the Powerpacks can then be sold to utility companies on home-owners’ behalf for cash when the grid requires it. Therefore, all participants can simultaneously satisfy their electricity requirements and generate additional income through clean, renewable energy. Moreover, all participating homes, the government’s website states, will receive an exclusive deal on their energy bill “which is more than 20% cheaper than the standard electricity price (known as the Default Market Offer) in South Australia.”

Subject to the trial’s analysis and success - Phase II was completed in late 2019 - Tesla’s VPP solution will be rolled out to the remaining 49,000 properties. With initial reports indicating a positive result, the approximately AU$800mn Phase III is likely to commence once private investors see the VPP’s value. 

With energy consumption becoming an ever greater challenge in a progressively more electric world, the SA VPP has the potential to become an ideal prototype of urban power generation. Providing a way for authorities to meet difficult environmental targets, for consumers to save and make money, and enabling the swifter conversion to cleaner energy sources which can empower local communities, it is safe to say that VPPs will play an important role in the digital era.

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May 14, 2021

Mirico Cloud identifies emission changes

Dominic Ellis
4 min
The platform allows customers to quantify gas emissions across multiple oil and gas sites - and comes amid more scrutiny over Paris-aligned targets

Mirico is extending its gas measurement services with the launch of Mirico Cloud for the oil and gas industry.

The platform lets customers detect and quantify gas emissions across multiple oil and gas sites, and quickly fix issues causing changes in emissions. Customers can be contacted by SMS or email for alerts if a new emission is above a certain size, or about an existing known emission that has started to grow.

Customisable dashboards can show average emissions over the last 24 hours or how emissions vary by asset type.

"It's great to be able to broaden the service we provide our customers," said Dr Linda Bell, CEO of Mirico. "We really feel this is a big step forward in helping the oil & gas industry to quickly identify emission issues at scale and ultimately help them in their goals to reach net zero."

The industry remains under intense pressure to deliver on emission targets. Achieving 50% lower emissions by 2030 will require either full electrification of the West of Shetland and Central North Sea or earlier-than-expected field cessations, according to Wood Mackenzie.

In 2018 the UK produced 451 million tonnes CO2 equivalent (MtCO2e) of greenhouse gas emissions. Around 3% of this total is direct emissions from oil and gas activity on the UK Continental Shelf. Energy generation, mainly from fossil fuels,  produced 23% of emissions, and the transport industry accounted for a further 28%, mostly from the use of oil-based products.

The North Sea Transition deal has four key pillars:

  • Supply decarbonisation reduce emissions from oil and gas production by 50% by 2030
  • Carbon capture and storage (CCS) target 10 Mtpa of carbon capture by 2030
  • Hydrogen deliver 5 GW of low-carbon hydrogen capacity by 2030
  • Supply chain/people deliver investment of £14-16 billion into low-carbon technology by 2030

Methane in the spotlight, a busy 48 hours for bp and JPMorgan releases carbon reduction targets

Institutional investors with a collective $5.35 trillion in assets are calling on the Biden administration to get tougher about methane emissions as it seeks to address climate change. "Any credible pathway for the use of natural gas in a Paris-aligned future must address methane emissions," it states.

Cutting human-caused methane by 45% this decade would keep warming beneath a threshold agreed by world leaders, according to the UN Environment Programme. Such reductions would avoid nearly 0.3°C of global warming by 2045 and would be consistent with keeping the Paris Climate Agreement’s goal, to limit global temperature rises to 1.5˚C, within reach.

bp and CEMEX will work together on accelerating the ‎progress of the latter's 2050 ambition to deliver net zero CO2 concrete globally. Around 70% of global emissions come from transport, ‎industry and energy and cement making is energy intensive. Last week bp and renewable energy supplier Pure Planet forged a partnership to launch a new digital energy service that will support households, EV drivers and energy consumers in the UK.

Hot on the heels of the CEMEX announcement, bp shareholders rejected a plan that would have forced the company to strengthen its climate commitments in an AGM poll, with only 20.65% pledging support. "We will continue to engage with shareholders on our strategy, targets and aims so as to ensure their views are fully understood," it stated. One of the challenges is that there is no single metric that measures Paris consistency, according to chief executive Bernard Looney.

JPMorgan Chase yesterday released comprehensive steps it is taking in its efforts to align its financing activities with the climate goals of the Paris Agreement, publishing 2030 carbon intensity targets for the Oil & Gas, Electric Power and Auto Manufacturing sectors. It also released its new Carbon Compass methodology that describes how the firm set its targets and how it will monitor progress over time, and unveiled a Center for Carbon Transition

“There must be collective ambition and cooperation by business and government to tackle climate change,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase. "Setting our Paris-aligned targets is an important step toward accelerating the transition to a low-carbon economy and meeting the goals of the Paris Agreement. JPMorgan Chase is committed to doing its part by working with clients around the world to reduce emissions and by ensuring our own operations remain carbon neutral."

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