Virtual power plants can provide both self-consumption optimization and participate in all electricity markets
A new report from Navigant Research examines the potential revenue streams available to distributed renewables generation assets in front of the meter using virtual power plants (VPPs).
With the decline of feed-in tariffs and net metering, distributed renewables providers are exploring new ways to provide value through these installations. Energy storage systems can help, but because they are still relatively expensive, a software-based platform that matches supply and demand in real-time is a promising alternative. Click to tweet: According to a new report from @NavigantRSRCH, the aggregation of distributed renewables assets into mixed-asset VPPs can help provide value to distributed renewables providers.
“The aggregation of distributed intermittent renewables is still relatively new—currently, only commercial and industrial installations are targeted, which are aggregated mostly through fee-based trading services solutions and are only sparsely used to provide ancillary services,” says Roberto Rodriguez Labastida, senior research analyst with Navigant Research. “In the residential market, aggregation is used mostly as a marketing tool and offered alongside other services like system sales and installations.”
In the near future, however, better resource forecasting, cheaper communications, and larger project portfolios are expected to help reduce the risk of participating in these markets. At home, aggregation becomes more attractive when other energy assets like batteries, electric vehicle charging, and connected HVAC are also managed by a VPP. With these assets and the generation system, the VPP can provide both self-consumption optimization and participate in all the electricity markets, according to the report.
The report, Distributed Renewables Aggregation Strategies in VPPs, explores the potential revenue streams and other sources of value available to distributed renewables generation assets in front of the meter using VPPs (not considering those available through load management). It also explores the aggregation services and the solutions that are being developed around them. Navigant Research focuses on deregulated markets (also known as consumer choice markets) in this report due to their transparency, but the analysis and recommendations are valuable to players working in regulated markets as well. The report also examines the key challenges related to the implementation of renewables aggregation strategies and provides case studies of VPP-enabled renewables business models. An Executive Summary of the report is available for free download on the Navigant Research website.
Contact: Lindsay Funicello-Paul
* The information contained in this press release concerning the report, Distributed Renewables Aggregation Strategies in VPPs, is a summary and reflects Navigant Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Navigant Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.