Virtual Power Plant: Is this the future of our electricity?

Young man working in a electricity plant

When you imagine where your electricity comes from, what comes to mind? You might visualise large factory buildings with long-stretching electricity lines that transport large amounts of electricity output daily. Through high-voltage transmission lines, transformers, and distribution lines, the power arrives at your home. The century-old concept of how we process and transport electricity is outdated. A new concept has entered the market to challenge this old concept. It’s called a virtual power plant (or VPP).

What is a virtual power plant?

A VPP is a group of decentralised power generating units that are wirelessly connected to business, homes, and energy storage systems. It uses technology to easily combine mixed sources of energy to provide better energy distribution and a reliable overall power supply. As the network is virtual and cloud-based, the system can quickly monitor and improve on broken electricity lines, peak-overflow of electricity, or managing multiple energy sources quickly. It also provides the capability to better maximise the benefits of clean electricity.

How does a virtual power plant work?

A VPP is a new form of energy management and generation. Many homes in Australia are already connected to solar systems that produce, store, and use solar energy for their household. A VPP connects these homes together to be managed by a centralized control system. They can then talk to each other virtually and benefit from one another. Overall, the benefits of a VPP contribute to a more balanced grid, increased energy efficiency, and easy integration of clean energy sources.

Why is it important

A VPP is more reliable than a traditional power plant. When fluctuations happen in the power grid, a VPP uses smart technology to identify, correct, and stabilize energy flow on the virtual power plant platform. Because of this quickness enabled by sensor monitoring technology, a VPP can provide a community with a more reliable power supply.

With the increase of renewable energy resources like solar, wind, and thermal, energy is now produced in multiple locations. A VPP better controls the bringing online of multiple energy sources than the traditional power grid by managing all the distributed power sites in a central area like the virtual power grid. Commonly, renewable energy generated by homes are produced, stored and managed in a micro-grid format. It’s a progressive concept, but the benefits of clean energy are only shared by the specific household. A VPP aims to ultimately connect all those micro-grids into a centralized virtual power plant so that they can talk to each other and benefit from each other. VPPs are part of the equation to us creating a decentralised and democratised grid.

VPPs are already popular in Australia. The Australian government in partnership with Tesla rolled out a VPP in 2018 to a network of up to 50,000 home solar and battery systems across South Australia — together forming the world’s largest VPP.

A VPP is only part of the solution to a cleaner energy-driven Australia. takes part in the VPP revolution by connecting individuals together to equip their homes affordably with renewable energy. With more homes of solar, a VPP is the next step to connect our network to benefit from the output of green energy together. If you’re looking to go solar, connect with our solar consultants to access the most affordable electricity in Australia.

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