Virtual Power Plants Will Reach $3.6 Billion in Annual Revenue by 2020

June 19, 2013

Using software systems, virtual power plants (VPPs) can combine a rich diversity of independent resources into a unified network via sophisticated planning, scheduling, and bidding of distributed energy resource -based services.  Driven by the integration of variable generation resources – especially from wind and solar – a viable VPP market is emerging and will see substantial growth, from a relatively small base, over the next several years.  According to a recent report from Navigant Research, annual worldwide revenue from VPPs will grow from less than $1 billion in 2013 to $3.6 billion in 2020, under a base forecast scenario.

Under a more aggressive forecast scenario, VPP vendor revenue could reach $4.3 billion by 2020.

“The growth in distributed, renewable power generation sources requires additional supply and demand flexibility to accommodate fast ramping periods and corresponding supply forecast error,” says Peter Asmus, principal research analyst with Navigant Research.  “VPPs represent an ideal optimization platform for the coming transformation of the power grid.”

Rate-basing utility prerogatives still offer deployment barriers for both VPPs and the complementary market for microgrids.  Although recent regulatory reforms are moving in the direction of a greater reliance on distributed energy resources, centralized fossil fuel power plants will still dominate electricity markets for quite some time.  Compared to traditional coal and natural gas-fired plants, VPPs offer a low-cost platform to squeeze more value out of existing infrastructure assets and to reduce greenhouse gas emissions associated with peaking power plants.

The report, “Virtual Power Plants”, examines the market for VPPs across four key segments: demand response-based VPPs, supply-side VPPs, mixed asset VPPs, and wholesale auction VPPs. The report includes both capacity and vendor revenue forecasts for each of these four VPP segments, broken down by region, through 2020. It also identifies key market drivers and barriers, and profiles the key players in the emerging VPP market, including utilities, large technology vendors, software firms, demand response aggregators, and selected key component providers. In addition, the report details the key issues facing primary VPP technologies, including smart grid automation, demand response, combined heat and power, advanced energy storage, smart inverters, and plug-in electric vehicles.  An Executive Summary of the report is available for free download on the Navigant Research website.

Contact: Richard Martin

+1.303.493.5483

richard.martin@navigant.com

* The information contained in this press release concerning the report, “Virtual Power Plants,” 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.

 

Register to Receive Updates

Sign up or login to receive free newsletters, research updates, access to webinars, and other analyst content from Navigant Research.

Data Services

An interactive data visualization platform with online access to global forecasts spanning the energy, utility, transportation, and buildings industries.

More Information

Research News

Rss
Capacity of Lithium Ion Batteries for Plug-In Electric Vehicle Second-Life Stationary Energy Storage is Expected to Grow 10 GWh From 2022 to 2035
Automotive original equipment manufacturers have new business models for developing stationary energy storage system projects • A recent report from Navigant Research explores the concept of reusing plug-in electric vehicle…
Read More »
Cumulative Global Wind Blade Revenue is Expected to Total $72.4 Billion from 2016 to 2025
Consolidation in the wind turbine market is forcing companies along the wind blade value chain to assess supply chain dynamics and strategy • A new report from Navigant Research assesses the global wind blade market, focusing on…
Read More »
The Global Smart Waste Collection Technology Market is Expected to Exceed $223 Million in 2025
Commercially viable smart waste technologies and an increasing interest in connectivity and city IoT networks are expected to foster market growth • A new report from Navigant Research examines the global market for smart waste collection…
Read More »
Trends in Emerging Mobility Services are Converging to Influence and Reshape the Future Transportation Market
Opportunities for market players to lead in this new space are expected to last for only the next few years • A new report from Navigant Research examines the trends associated with emerging mobility services…
Read More »
View All News

{"userID":"","pageName":"Virtual Power Plants Will Reach $3.6 Billion in Annual Revenue by 2020","path":"\/newsroom\/virtual-power-plants-will-reach-3-6-billion-in-annual-revenue-by-2020","date":"12\/3\/2016"}