Keywords : electric power, power plant, electrical power
Pike Research defines a virtual power plant (VPP) as a system that relies upon software systems to remotely and automatically dispatch and optimize generation, demand-side, or storage resources (including plug-in electric vehicles and bi-directional inverters) in a single, secure web-connected system. VPPs can provide extraordinary value and services to transmission and distribution (T&D) grid infrastructure, as well as revenue streams to myriad ...
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Pike Research defines a virtual power plant (VPP) as a system that relies upon software systems to remotely and automatically dispatch and optimize generation, demand-side, or storage resources (including plug-in electric vehicles and bi-directional inverters) in a single, secure web-connected system. VPPs can provide extraordinary value and services to transmission and distribution (T&D) grid infrastructure, as well as revenue streams to myriad stakeholders engaged in the provision of electric power.
The primary goal of a VPP is to achieve the greatest possible profit for asset owners while at the same time maintaining the proper balance of the electricity grid. From the outside, the VPP looks like a single power production facility which publishes one schedule of operation and which can be optimized from a single, remote site. From the inside, the VPP can combine a rich diversity of independent resources into a network via sophisticated planning, scheduling, and bidding of distributed energy resource (DER)-based services. Pike Research forecasts that vendor revenue from VPPs, in an average forecast scenario, will reach $3.6 billion in 2020.
This Pike Research report 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.
Key Questions Addressed:
• How do different market participants and parts of the world define a VPP?
• Which VPP segments show the best near-term potential in which geographies – and why?
• What types of companies are focused on VPP opportunities? Who are the market leaders in demand response VPPs, supply-side VPPs, and mixed asset VPPs?
• Which types of smart grid VPP aggregation and optimization are the most lucrative?
• Why will mixed asset VPPs be the market-leading segment?
• What are the key issues facing primary VPP technologies?
• What are the emerging business models for VPP market participants?
Who needs this report?
• Utilities
• Smart grid hardware and software vendors
• Demand response providers
• IT software and services companies
• Energy storage companies
• Electric vehicle manufacturers
• Government agencies
• Investor community
Global Electric Power Energy Industry
Table of Contents
1. Executive Summary
1.1 Virtual Power Plant Overview
2. Market Issues
2.1 Pike Research’s Working Definition of a Virtual Power Plant
2.1.1 Four VPP Market Segments
2.1.2 VPPs and Microgrids: Similarities and Differences
2.1.2.1 Microgrid and VPP Business Models to Merge?
2.1.3 Bridging the Divide between Wholesale and Retail Markets
2.2 The Business Case for VPPs
2.2.1 Net Cost of VPP and Aggregation Alternatives
2.3 Strengths, Weaknesses, Opportunities, and Threats Facing VPP Segments
2.3.1 DR-VPPs
2.3.2 Supply-Side VPPs
2.3.3 Mixed Asset VPPs
2.3.4 Wholesale Auction VPPs
2.4 Current Market Drivers
2.4.1 IT Crossovers into Power Markets
2.4.2 Smart Grid Infrastructure Upgrades
2.4.3 Real-Time or Time-of-Use Pricing
2.4.4 Automated Dispatch of Flexible Resources
2.4.5 FERC Orders on Demand Response
2.4.6 Global Growth in Renewable Distributed Generation
2.4.7 Growing Maturity of Third-Party Ancillary Service Markets
2.4.8 EPA Rulings on Diesel Generators
2.5 Implementation Challenges
2.5.1 What Is the Business Model?
2.5.2 Case Study: Denmark’s Market Redesign
2.5.3 Lack of VPP Standards, Certifications, and Property Rights
2.5.4 Pushback against the Smart Grid
3. Technology Issues
3.1 Key VPP Technologies Overview
3.1.1 Mixed Asset VPP Case Study: E-Energy
3.2 What Are the Top Two Technology Drivers for Creating VPPs?
3.3 Inventory of VPP Solution Set Technologies
3.3.1 Smart Grid Automation and Networking
3.3.1.1 Strengths and Weaknesses
3.3.1.2 Commercial Time Horizon
3.3.2 Demand Response
3.3.2.1 Strengths and Weaknesses
3.3.2.2 Commercial Time Horizon
3.3.2.3 DR-VPP Case Study: Northern Westchester County Energy Action in New York
3.3.3 Combined Heat and Power
3.3.3.1 Strengths and Weaknesses
3.3.3.2 Commercial Time Horizon
3.3.4 Advanced Energy Storage
3.3.4.1 Strengths and Weaknesses
3.3.4.2 Commercial Time Horizon
3.3.5 Smart Inverters
3.3.5.1 Strengths and Weaknesses
3.3.5.2 Commercial Time Horizon
3.3.6 Plug-In Electric Vehicles
3.3.6.1 Strengths and Weaknesses
3.3.6.2 Commercial Time Horizon
4. Key Industry Players
4.1 VPP Company Profiles Overview
4.2 Utilities
4.2.1 American Electric Power
4.2.2 DONG Energy
4.2.3 Duke Energy
4.2.4 Xcel Energy
4.3 Large Technology Players
4.3.1 Alstom Grid
4.3.2 GE Digital Energy
4.3.3 IBM
4.3.4 Schneider Electric
4.3.5 Siemens
4.4 Pure Software Providers
4.4.1 Blue Pillar
4.4.2 Calico Energy
4.4.3 Joule Assets
4.4.4 OSIsoft
4.4.5 Power Analytics
4.4.6 Spirae, Inc.
4.4.7 Ventyx
4.4.8 Viridity Energy
4.5 Demand Response Aggregators
4.5.1 Comverge
4.5.2 Consert
4.5.3 EnerNOC
4.6 Niche Component Providers
4.6.1 A123 Systems
4.6.2 Better Place
4.6.3 Princeton Power Systems
4.6.4 S&C Electric Company
5. Market Forecasts
5.1 VPP Market Overview
5.2 Definitional Issues for VPPs Persist
5.3 VPP Market Forecast
5.4 DR-VPPs
5.4.1 North America
5.4.2 Europe
5.4.3 Asia Pacific
5.4.4 Rest of World
5.5 Supply-Side VPPs
5.5.1 North America
5.5.2 Europe
5.5.3 Asia Pacific
5.5.4 Rest of World
5.6 Mixed Asset VPPs
5.6.1 North America
5.6.2 Europe
5.6.3 Asia Pacific
5.6.4 Rest of World
5.7 Wholesale Auction VPPs
5.8 Conclusions and Recommendations
6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Figures
10. Scope of Study, Sources and Methodology, Notes
List of Charts and Figures
• Total VPP Capacity by Region, Average Scenario, World Markets: 2013-2020
• Annual Installed Capacity of Distributed Solar PV by Region, World Markets: 2012-2017
• Smart Grid Technology Revenue by Region, World Markets: 2012-2020
• VPP Database Segments, Vendor Planned and Operating Potential Capacity: 1Q 2013
• Total VPP Capacity by Forecast Scenario, World Markets: 2013-2020
• Total VPP Revenue by Forecast Scenario, World Markets: 2013-2020
• DR-VPP Capacity by Region, Average Scenario, World Markets: 2013-2020
• DR-VPP Revenue by Region, Average Scenario, World Markets: 2013-2020
• Supply-Side VPP Capacity by Region, Average Scenario, World Markets: 2013-2020
• Supply-Side VPP Revenue by Region, Average Scenario, World Markets: 2013-2020
• Mixed Asset VPP Capacity by Region, Average Scenario, World Markets: 2013-2020
• Mixed Asset VPP Revenue by Region, Average Scenario, World Markets: 2013-2020
• VPP Conceptual Diagram
• Customer-Grid Evolution – Microgrids and VPPs
• Denmark’s Cell Controller Project Microgrids-VPP
• Hierarchy of Resource Costs Show DR-VPP Lowest-Cost Option
• Smart Meter Deployments in the United States
• Denmark Shifting to Real-Time Direct Control Market via EcoGrid
• Wind Power World Market Update: 2011
• The DR Market Today: 1% to 2% of Summer Peak Days/Hours
• Smart DR Inverter for Four Bidirectional Loads/Resources
• Island of Bornholm: Bright Green City VPP
• Alstom Grid VPP Projects in the United States and Europe
• VPP Diagram from Siemens, Founder of VPP Supply Concept
• Consert’s View of DR Market Value
List of Tables
• SWOT Analysis for DR-VPPs
• SWOT Analysis for Supply-Side VPPs
• SWOT Analysis for Mixed Asset VPPs
• SWOT Analysis for Wholesale Auction VPPs
• VPP SWOT Analysis for Smart Grid Automation and Networking
• VPP SWOT Analysis for Demand Response
• VPP SWOT Analysis for Combined Heat and Power
• Energy Storage Ancillary Service Characteristics Relevant to VPPs
• VPP SWOT Analysis for Advanced Energy Storage
• VPP SWOT Analysis for Smart Inverters
• VPP SWOT Analysis for PEVs
• SWOT Analysis for DONG Energy
• SWOT Analysis for Duke Energy
• SWOT Analysis for Schneider Electric
• SWOT Analysis for Siemens
• SWOT Analysis for Comverge
• SWOT Analysis for Consert
• SWOT Analysis for EnerNOC
• Total VPP Capacity by Region and Segment, Base Scenario, World Markets: 2013-2020
• Total VPP Capacity by Region and Segment, Average Scenario, World Markets: 2013-2020
• Total VPP Capacity by Region and Segment, Aggressive Scenario, World Markets: 2013-2020
• Total VPP Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
• Total VPP Vendor Revenue by Region, Average Scenario, World Markets: 2013-2020
• Total VPP Vendor Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
• DR-VPP Capacity by Region, Base Scenario, World Markets: 2013-2020
• DR-VPP Capacity by Region, Average Scenario, World Markets: 2013-2020
• DR-VPP Capacity by Region, Aggressive Scenario, World Markets: 2013-2020
• DR-VPP Revenue by Region, Base Scenario, World Markets: 2013-2020
• DR-VPP Revenue by Region, Average Scenario, World Markets: 2013-2020
• DR-VPP Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
• Supply-Side VPP Capacity by Region, Base Scenario, World Markets: 2013-2020
• Supply-Side VPP Capacity by Region, Average Scenario, World Markets: 2013-2020
• Supply-Side VPP Capacity by Region, Aggressive Scenario, World Markets: 2013-2020
• Supply-Side VPP Revenue by Region, Base Scenario, World Markets: 2013-2020
• Supply-Side VPP Revenue by Region, Average Scenario, World Markets: 2013-2020
• Supply-Side VPP Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
• Mixed Asset VPP Capacity by Region, Base Scenario, World Markets: 2013-2020
• Mixed Asset VPP Capacity by Region, Average Scenario: World Markets: 2013-2020
• Mixed Asset VPP Capacity by Region, Aggressive Scenario, World Markets: 2013-2020
• Mixed Asset VPP Revenue by Region, Base Scenario, World Markets: 2013-2020
• Mixed Asset VPP Revenue by Region, Average Scenario: World Markets: 2013-2020
• Mixed Asset VPP Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
• Wholesale Auction VPP Capacity by Region, World Markets: 2013-2020
• Wholesale Auction VPP Revenue by Region, World Markets: 2013-2020
