IEEE Spectrum March, 2012 - 14

in the last several years,
he says, energy market
players have come to
accept the virtual power
plant as a commercially
viable alternative to adding
new capacity, as well
as a way to handle the
variability of renewables.
"Rather than having all
these 5-kilowatt photovoltaic
sources, you have a 100-MW
virtual plant that for
the utility is much more
manageable," says Peter
Asmus, a senior analyst at
the market research firm
Pike Research. "And it's
temporary-you might stitch
together those resources
for just a half hour, to help
meet peak demand." Pike
Research estimates that
the worldwide capacity of
virtual power plants could
grow from 45 gigawatts last
year to as much as 105 GW
by 2017, with revenues
of about $6.5 billion.
A virtual power plant
also lets smaller energy
producers take part in
energy markets from which
they might otherwise be
excluded. One plant set
up by Siemens aggregates
1450 MW of capacity from
small generators installed
in hospitals, industrial
facilities, and commercial
buildings throughout
Germany. Ordinarily, each
of these units would be used
only during emergencies
and only to power its
particular site. Hooked
up via the virtual power
plant, they can now be
fired up whenever market
rates or grid conditions
make it worthwhile.
14

A remaining challenge,
Werner says, is that there
is no standard interface
between the central control
system that manages and
optimizes the virtual power
plant and the distributed
energy resources out in
the field, many of which
may not have been
designed to communicate
with an IT network.
The virtual power plant
concept is an obvious
culmination of the
decadelong push to deploy
smart meters, sensors, and
other infrastructure, says
Amit Narayan, director
of smart grid research in
modeling and simulation
at Stanford University.
"If you think about the
evolution of the Internet,
it's the same thing," he
says. "Somebody had to
lay the wires and build the
infrastructure, but once
that's in place, a lot more
can be done in terms of
creating new applications."
And in much the
same way that Google,
Facebook, and Amazon
troll through user data to
discern subtle patterns in
people's tastes and then try
to influence their buying
habits, Narayan says,
virtual power plants give
grid operators the means
to study their customers'
electricity usage and then
try to get them to modify
their behavior in a way that
increases the capacity of
the virtual power plant.
Indeed, changing
people's habits should be
one of the chief outcomes
of the Bornholm project,

Na * IEEE SpEctruM * March 2012

Bright green: Denmark's Bornholm Island will
soon have the world's most advanced virtual power
plant, as part of a €21 million smart grid project.
photo: JaCeK KadaJ/getty iMageS

says Behnke, because
when consumers use less
electricity, they'll not only
reduce their electricity bill,
they'll also get a bonus based
on the market price for
the electricity at that time.
"We hope to show that even
these small customers can
help balance the grid, based
on actual need within the
hour," he adds. His company
estimates that the virtual

power plant should help
reduce peak loads on the
island by at least 20 percent.
While Denmark already
has a number of virtual power
plants, they're all designed
to allow large electricity
customers to trade energy in
the day-ahead market, Behnke
says. "That's what we call
Smart Grid, version 1. Now
we are going for Smart Grid,
version 2."
-Jean Kumagai
spectrum.ieee.org
http://spectrum.ieee.org
Table of Contents for the Digital Edition of IEEE Spectrum March, 2012
