Virtual Power Plants Will Reach $5.3 Billion in Annual Vendor Revenue by 2023

June 24, 2014

Virtual systems achieve the highest profit for asset owners while maintaining balance on the grid, report finds

Several developments in the power sector, including the increasing penetration of smart meters and growth in variable renewable generation, have created an environment conducive to virtual power plants (VPPs).  VPPs combine a rich diversity of independent resources into a network via sophisticated planning, scheduling, and bidding of distributed generation-based services.  Click to tweet: According to a new report from Navigant Research, total annual VPP vendor revenue will grow from $1.1 billion in 2014 to $5.3 billion in 2023.

“Virtual power plants represent a prime example of transactive energy, whereby new technologies such as demand response, solar photovoltaic systems, and advanced energy storage enable consumers to take a more active role in managing the energy they use,” says Peter Asmus, principal research analyst with Navigant Research.  “VPPs harness software and IT innovations to achieve the greatest possible profit for asset owners while at the same time maintaining the proper balance of the electricity grid.”

Navigant Research breaks down the VPP market into three primary segments: demand response (DR), supply-side, and mixed asset VPPs.  While supply-side systems are the most straightforward VPPs in concept, according to the report, demand response is the largest commercial VPP segment in the United States.  The ultimate goal is embodied in a mixed asset VPP, which combines distributed generation, demand response, and other resources to provide a synergistic sharing of grid resources to create more value and reduce capital costs.

The report, “Virtual Power Plants”, analyzes the global VPP market, with a focus on three primary segments: DR, supply-side, and mixed asset VPPs.  It provides an analysis of the market issues, including business cases, market drivers, and implementation challenges, associated with VPPs.  Global market forecasts for power capacity and vendor revenue, broken out by segment, region, and scenario, extend through 2023.  The report also examines the key technologies related to VPPs, as well as the competitive landscape.  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.

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