Virtual Power Plants and Software
stephendeyoung.substack.com
stephendeyoung.substack.com
Virtual power plants are recognized as being part of the future of the power grid, and it's nice to see the details behind at least one implementation.
Having worked on the wholesale market side of things: technology is moving quickly, and I worry that there are years of chaos ahead of us due to a lack of standardisation, as the post mentions.
Not only are each deregulated market different (e.g. California, New York, Mid-Atlantic, etc.), but in regulated markets, each UTILITY could be using a different standard. The night (the current power grid infrastructure) is darkest (most chaotic) just before the dawn (power infrastructure revolution).
Virtual Power: The future of energy flexibility.
My friends and family who guilt-tripped themselves into buying it to support me said it's surprisingly readable! Note: it is more market, policy, and energy technology focused, so not a deep dive into the networking and software.
The fun thing about VPPs is that once you have the software setup, it's basically free money with less carbon emissions by undercutting the gas peaker pirates who ended up charging $1600/MWh in Texas earlier this year. [0]
0 - https://www.eia.gov/electricity/monthly/update/wholesale-mar...
Assuming that you have the ability to generate power (e.g. you own a peaker plant), you submit offers effectively saying "I'm OK providing power for at least 20$/MWh, up to 100 MWh".
The market operator then solves a very complex optimization problem (called 'optimal power flow') which may result in power prices being very expensive in certain areas, due to transmission congestion.
There's a lot of long-tail value/margin to be captured by VPPs right now, especially as wind and solar penetration increases.
(The Enron people abused this with too much market share by taking power plants offline at times of high demand and doing shenanigans with transmission congestion.)
The US Federal Energy Regulation Commission (FERC) has mandated that electric network operator allow the participation of virtual power plants in wholesale electricity marketts. While many regional authorities are slow in implementing it (I think some operators are planning to support VPP participation in wholesale markets in 2030), regulators are on the ball.