Monday, March 11, 2013
Smart grid contributing to rise of virtual power plants
Virtual commodities are gaining prominence in a variety of sectors, but they often exist in different forms. When it comes to electricity, virtual power plant (VPP) technology represents an important melding of the physical and virtual that enables power generation sites to interact seamlessly with smart grid architectures. According to a recent Pike Research study, the rise of smart grid solutions and similar utility trends is leading to a major market opportunity in the VPP sector.
The rise of VPPs
The news source explained that the concept of VPPs is not, in any way, new. Instead, VPPs have been around for a while and functioned as a viable part of the energy grid. However, they have not been able to fully engage as a major contributor to the power ecosystem because of limitations in the grid as a whole. Smart grid is changing this and creating a large potential marketplace for VPP solutions. Peter Asmus, principal research analyst for Pike Research, explained that considerable market growth is on the horizon in the VPP sector.
"VPPs represent an 'internet of energy,' tapping existing grid networks to tailor electricity supply and demand services for a customer, utility, or grid operator," said Asmus. "By stretching supplies from existing generators and utility demand reduction programs, they deliver greater value to the customer while also creating benefits for the host distribution utility and the transmission grid operator."
According to the study, significant developments in the VPP ecosystem have taken place in recent years through a number of pilot projects that have helped showcase the potential of VPP solutions in the broad smart grid landscape.
Making the most of smart grid through better power generation
Improving power generation and resource acquisition represents an important component of smart grid development. For utility providers, one of the most important parts of smart grid is that it allows them to make enough money to develop consistent revenue models despite the high costs of developing infrastructure. To accomplish this, utility companies need to find better and more efficient ways to access energy at a lower cost. VPPs and similar solution could provide a step in the right direction when it comes to power generation innovation. Accomplishing this depends heavily on strategic network upgrades, creating an environment in which terminal server infrastructure is essential.
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