Newsletters Press Release
IDC Energy Insights Says Virtual Power Plants Can Improve the Environmental and Economic Impact of Decentralized Generation
MILAN, Italy, June 29, 2010 – IDC Energy Insights recently released a new report that provides an in-depth look at the RWE Virtual Power Plant (VPP) implementation, which seeks to demonstrate how the virtual power plant concept can become more than a theory or small-scale pilot by aggregating large enough quantities of generated electricity that can be traded on the energy power markets.
According to Roberta Bigliani, EMEA Research Director for IDC Energy Insights, "The contribution of distributed generation in the achievement of energy policy targets can be significantly improved by the vast adoption of virtual power plants."
In its report, Defining the Virtual Power Plant (Doc #EI221035, Dec 2009), IDC Energy Insights defined a Virtual Power Plant as a technical, operational, and economic construct that aggregates distributed supply and demand resources in a manner that enables the VPP operator to treat the distributed energy resources as if they were a single power plant. Basically, a central control room, leveraging ICT, links-up and remotely operates small, distributed power stations, like Combined Heat and Power (CHP) units, photovoltaic (PV) systems, small hydropower plants, wind farms and biogas units, storage facilities but also loads that can be switched off or dynamically managed.
IDC Energy Insights believes that the positive environmental and economic impact of decentralized generation can be substantially improved by setting up virtual power plants. While there are a handful of VPP projects being developed, the concept is far from being normal practice.
Why RWE's VPP is a Best Practice
IDC Energy Insights believes that RWE's VPP is exemplary for its size, and its attempt to reach a large enough scale to be able to sell on the market both its generated electricity and its reserve capacity.
RWE started its first Virtual Power Plant implementation in 2007 seeking to aggregate decentralized plants, such as Combined Heat and Power (CHP) plants, together with biomass or wind power plants to form a VPP controlled from a centralized management system. The generation capacity that RWE Energy is able to collect is sold on the EEX Power exchange, and the reserve capacity is sold through auctions. The current success of the project has given the partners the possibility to further it by expanding its capacity to 30-40MW over the next couple of years.
The software solution that constitutes the "brain" of RWE's system enables demand-driven production planning, production optimization, monitoring, and control. The program is fed all the relevant information, such as the latest electricity prices and the energy requirements of customers. On the basis of this data, the software calculates a scheduling plan for the upcoming day and, thus, determines which plants are to be dispatched. The other key component is installed locally at the generation unit site, and allows bidirectional communication with the "central brain." Its main functionality is to execute control commands. Communication also plays a fundamental role in the success of VPP management. In order to fully integrate the generation units to the central control system, and between themselves, each unit is tracked with GPRS.
IDC Energy Insights highlights that there are a wide range of environmentally interesting options that a VPP can allow:
- The system is flexible and independent from the technologies adopted for generation, therefore, it can easily accommodate changes, as well as introduce and integrate small-scale renewable energy technologies (PV, wind) in the energy supply chain;
- It improves the overall efficiency, as significant reduction of electricity transmission and distribution distances lessen losses, resulting in additional energy savings and overall reduction of emissions;
- It improves reliability, security of supply, and flexibility of supply, thanks to multiple grid connections.
Further information about this successful implementation can be found in the IDC Energy Insights study Best Practices: Operationalizing Virtual Power Plants in Europe - RWE Collaborates with Siemens (Doc #EIRS01S, Jun 2010), by Roberta Bigliani and Gaia Gallotti.
Join the online conversations about this research on the IDC Energy Insights community and read Roberta Bigliani's blog post!
This report is available for purchase at www.idc-ei.com. For media enquiries or more information on how to get a copy of this report, please contact: Cinzia Rinelli at +39 02 28457 367 and crinelli@idc.com
About IDC Energy Insights
IDC Energy Insights provides research-based advisory and consulting services focused on market and technology developments in the energy and utility industries. Staffed by senior analysts with decades of industry experience, IDC Energy Insights covers both the utility and oil & gas segments, providing independent, timely, and relevant analysis focused on key business and technology issues. IDC Energy Insights serves a diverse and growing global client base, including electric, gas and water utilities, IT suppliers, independent power producers, retail energy providers, oil and gas companies, equipment manufacturers, government agencies, financial institutions, and professional services firms. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-ei.com, or email info@idc-ei.com. Visit the IDC Energy Insights Community at http://idc-insights-community.com/energy.
For more information, please contact:
Cinzia Rinellicrinelli@idc.com
+39 02 28457 367
