A virtual power plant (VPP) aggregates distributed energy resources like solar, wind, storage and flexible loads to act as a single controlled generation source. It allows these distributed resources to participate in electricity markets and provide grid services like peak shaving and frequency regulation. A VPP has three main components - distributed energy resources, energy storage systems, and communication technology. It uses optimization algorithms to coordinate these resources and provide benefits like improved reliability and cost efficiencies.

1. VIRTUAL POWER PLANT (VPP)
Course: Distribution Generation and Smart Grid
Prof. (Dr.) Pravat Kumar Rout, Department of EEE
Sarthak Mohanty (Research Scholar), Department of EE
Faculty of Engineering andTechnology (ITER)
Siksha ‘O’ Anusandhan (Deemed to be University), Bhubaneswar, India

2. Issues and Challenges in the present Power System Scenario
• Most of the Distributed Energy Resources (DERs) like wind turbine (WT), photovoltaic (PV), and
hydroelectric power (HP) are generally deployed far away from the load operation centres,
requiring long-range inter-state transmission of electricity.
• The uncertain nature of RESs from forecast and prediction difficulties results in power imbalance
and deviation of frequency in the grid power systems.
• There is instability in the power flow in Distribution Networks (DNs) caused by the integration of
DERs in the consumer side escalating the predictableness of demand load.
• The high integration of Distributed Generations (DGs) to the distribution sector, injection of
excess local power to the grid by some consumers, and Electric Vehicle (EV) integration make
the standard methods of centralized control difficult to handle the power flow variation.
• The PV and wind-based DGs are not viable to participate easily in the market-based restructured
power system due to their smaller size, intermittent uncertainties, and stochastic
characteristics.

3. What is aVirtual Power Plant?
• AVirtual Power Plant (VPP) in a broad way is defined and characterized as a virtual aggregation of
decentralized, medium-scale power generating units as well as flexible power consumers and storage
systems to operate flexibly and in a coordinated way.
• The major characteristics ofVPP are information gathering and processing, geographical influence
ignorance, and dynamic operation and optimization.

4. Benefits ofVPP in the current Power System Scenario
• The ability to deliver peak load electricity or load-following under adverse conditions.
• Added value to the utilization of energy to meet the demand without investment in new generation
plants.
• Can coordinate previously uncoordinated traditional and non-traditional generation sources to the
newly integrated DER and storage devices.
• Access new electricity markets without owning large plants.
• Enhanced system reliability and cost efficiencies with better energy management.
• Help in making the transition from large, centralized power plants to smaller, smarter, and more
sustainable DERs located at customer sites.
• Enhance independent generator capacity particularly in the period of peak loads.
• Using market prices, the control system can create optimized price schedules for the consumption of
electricity when it is cheap and demand is low.
• The VPP integration brings an efficient, reliable, and safe system by managing internal DERs and
controllable loads together.

5. Applications ofVPP in Power System
• Monitoring and data management of power portfolios from individual plants integrated with
many resources.
• The direct access to market using various DERs, conventional sources, storage systems, and
flexible loads.
• Demand-side management (DSM) methods and solutions can be implemented with flexible
electricity consumers for active load management.
• Demand response can be employed to use the dynamic electricity prices.
• Frame a centralized control for grid operators to monitor and control wind and solar parks
remotely.

6. Components of aVPP System
The main structure of aVPP unit
comprises the following components:
• Distributed Energy Resources (DERs)
• Energy Storage Systems (ESSs)
• Information and Communication
Technology (ICT) devices.

7. Distributed Energy Resources (DER)
Based on their dispatch capability and their source of generation type, they are
categorized into:
• Renewable energy sources (RES)
✓ Photovoltaics
✓ Hydropower Plants
✓ WindTurbines
• Conventional energy sources
✓ Combined Heat and Power (CHP)
✓ Fuel-based DERs : Diesel generators, biomass, and fuel cells

8. Energy Storage Systems (ESSs)
It is a new mechanism to adapt to load demand variations mostly as energy buffers during
high availability of non-dispatchable generation sources, storing extra available off-peak
period generated energy and dispatching it during peak periods.
According to their applications, they are classified according to ESS concerned with the energy
supply as :
✓ Compressed Air Energy Storage (CAES)
✓ Hydraulic Pumped Energy Storage (HPES)
Similarly, according to the ESS concerned with the power supply as:
✓ SuperCapacitor Energy Storage (SCES)
✓ Superconductor Magnetic Energy Storage (SMES)
✓ Flywheel Energy Storage (FWES).

9. Information and CommunicationTechnology (ICT)
• The main component of aVPP system enabling information and data transfer in a bi-directional
way which is facilitated by the Energy Management System (EMS), as the central hub of ICT.
• Involves together various information transfer and relaying systems.
Other main components of the ICT are:
✓ RemoteTerminal Units (RTUs)
✓ Intelligent Electronic Devices (IEDs)
✓ Distribution Dispatch Centre (DDC)
✓ Supervisory Control and Data Acquisition (SCADA).

10. Energy Management System (EMS)
For effective functioning of theVPP system, the EMS is assigned with the following tasks:
• Management of the current status and the deployment of individualVPP components
• Assessment of the output power of RES primary sources
• Management and prediction of loads
• Power flow coordination among the constituentVPP subunits
• Scheduling of DG operation, ESS, and controllable loads.

11. Objectives of EMS
The primary objective of EMS is involved with the following objectives:
• Minimization of losses
• Minimization of environmental pollution
• Minimization of energy production costs
• Maximization of profitability
• Voltage profile improvement
• Power quality enhancement.

12. Framework ofVPP operation
• VPP controls the supply and integrates
different DERs into a clustered,
interconnected operating system.This
enables theVPP to actively participate in
electricity markets by offering ancillary
and power quality-oriented services in
conjunction with operation as a single
distribution network.
• Based on the DER and ESS
characteristics and their operational
features,VPPs are classified into two
separate parts:
✓ CommercialVPP (CVPP)
✓ TechnicalVPP (TVPP)

13. CommercialVPP (CVPP)
CVPP allows for the following services to be deployed:
• Facilitating smaller DER units with their participation in the electricity market
• Generation scheduling and day-to-day optimization
• Demand response management during outage/blackout periods
• Weather forecasting and demand profile based generation and usage forecasting
• Submission of DERs’ schedule, costs, and maintenance operations
• Management of trading profiles
• OverallVPP participation in wholesale electricity markets
• Prediction-based scheduling of generations on basis of customer requirements.

14. TechnicalVPP (TVPP)
TVPP facilitates the following functionalities to DER units:
• Makes the DER units visible toTSOs and DSOs
• It aggregates technical parameters of various DERs like static operation data (ramp limit,
capacity limit, etc.) and dynamic operation data (operating status, power output, ESS State
of Charge (SoC), malfunction, etc.)
• During power commitment implementation ofVPPs, it administers the real-time
operating status of DERs for maintenance of internal power balance.
• At the end of the dispatching cycle, it calculates each DER unit’s output power and relays
the total harnessed output to CVPP for redistribution and calculation of profit.
• Provides with balancing, management of theVPP system, and facilitation of ancillary
market services.
• Determines the location of faults.
• Statistical analysis and optimization of the project portfolio.
• Facilitates maintenance operations.

15. Control strategy ofVPP
The internal control methods ofVPP operation can be divided into threefold based
on the strategy and planning such as:
• Centralized control: VPP is enabled with ultimate control power and acts as a
control coordinate center to regulate all integrated DERs
• Distributed control: VPP planning is categorized into two major independent levels
such as the central communication level operated byVPP and the independent
subsystem level operated by generator stakeholders
• Comprehensive control: The level-1 is theVPP centralized control.The
computational burden is reduced through allocating the responsibility to agents of
level-2 through distributed agent control.

16. Bidding strategies inVPP
• The bidding strategies offered by aVPP to participate in electricity regulatory
markets can be oriented towards the fulfilment of various objectives and
strategies.
• VPP can act as a price coordination mechanism but itself has no effect on market
exchange rates due to its price taker role.
• Based on time dimensions, this market-centric operation mechanism contains
three stages:
✓Day-ahead Market
✓Real-time Market
✓Balancing Market

17. Bidding Mechanism ofVPP

18. Comparison of conventional power plant (CPP) withVPP
CPP VPP
An aggregation of thermal power generation units
giving out stable and controlled output with support
for peak load shaving and frequency regulation
Functions as a single dispatchable unit in a power
system and a single trading unit in wholesale
electricity markets.
Usually confined in geographical locations
following fossil fuel distribution.
Comprise of various distant RES units over a large
geographical area.
The installed capacities and number of units are
usually fixed.
More accommodating in terms of expansion of
capacity by the aggregation of more DERs.
Good control performance but a relatively slow rate
of regulation.
More flexible regulation rate and faster response
times .

19. Comparison of microgrid withVPP
MG VPP
A clustering of various loads and micro sources that operate as
a singular controllable system providing a supply of both
power and heat around the local area of application.
An integration of various DGs, ESSs, and many controllable
loads, but has a wider scope as compared to MGs.
It focuses on self-management and local dissipation of power. It gives more focus on participation, conglomeration, and
control of many DGs, ESSs, and variable loads.
Coupled with the traditional grid using coupling switches. Coupled with the grids via open protocols.
The area covered under MGs is limited on transmission and
distribution lines that interconnect various DGs and loads.
Not limited by the coverage of only the same geographical
area but can intercommunicate over large areas depending
upon the technology and communication networks.
Responsible for the maintenance of power quality, security,
etc.
Manage the roles undertaken by MGs, but also are
responsible for increasing the overall controllability and
operability providing ancillary services.

20. How canVPP operation be improved?
• Better coordination and DER integration techniques.
• Advanced ICT and power transfer protocols.
• Optimization ofVPP strategies.

21. Optimization operations inVPP
• TheVPPs employ several optimization strategies for smooth operation among the DERs
and customers.Various optimization techniques, strategies, algorithms are available in the
literature and can be applied in different scenarios.

22. Objectives inVPP optimization
• VPP aggregates DERs, ESSs, and controllable loads based on specific objective
functions to allow for optimal operation.The main focus of objective functions is
to maximize the profitability of the system and reduction of costs.

23. Constraints inVPP optimization
• Several constraining factors affect the optimal operation ofVPP in the electricity market.
• The demand and supply balancing constraints take into account the distribution network’s
response in attaining customer satisfaction.
• VPP power output constraints indicate the minimal and maximum operating states as
constraints.

24. Optimization formulations inVPP problems
• Four factors are used to classify the optimization formulations.These four factors
comprise either classical or modern methods of optimization, type of optimization
process, single or multi-objective optimization, and the application of game
theory used.
Classical Optimization Methods Modern Optimization Methods
Linear Programming Genetic Algorithm
Non-Linear Programming Particle Swarm Optimization Algorithm
Quadratic Programming Ant Colony Optimization Algorithm
Integer Programming Artificial Bee Colony Algorithm
Binary Programming Grey Wolf Optimization
Continuous Optimization Programming Imperialist Competitive Algorithm
Mixed Integer Programming Shuffled Leap Frog Algorithm
Stochastic Programming Moth Flame Optimization Algorithm
Deterministic Programming Differential Evolution
Static Optimization Coral Reef Optimization Algorithm
Dynamic Optimization Tabu Search
Convex Optimization Programming Simulated Annealing

25. Discussion and findings from existing research
•Electrical vehicles in distributed and integrated markets are more viable now.
•The electricity networks are designed to be flexible for possible energy solutions to be integrated.
•Entire electricity networks can be made self-sustaining by the coordinated operation of all the
components of theVPP system
•TheVPPs are operated to a great extent as a power matcher to improve power balance.
•TheVPP is capable to provide ancillary services like load frequency control by aggregating the resources
for generation and consumption
•TheVPP as a tool can contribute significantly to demand response programs.
•There are significant differences in system structure and operation modes ofVPP and it is very hard to
design a generalized framework.
•To make theVPP concept fruitful, sufficient communication bandwidth and high-speed processing
algorithms are necessary.
•The role of ESS is crucial inVPP implementation to bring reliability and quality of power supply.

26. Future prospects ofVPP in Power Systems
• Innovative structure and topology of VPP can accompany the change of distribution
system and its components.
• Diversified and hybrid optimization techniques are being explored further for internal
energy dispatch, external market participation, risk evaluation, information and strategy
coordination, and bidding strategy.
• Further penetration of EVs in the future timeframe presents greater possibilities for them
to be used as energy reserves supplying bi-directional power flow and acting as
redundancy systems in case of failure of generation or shortfalls during peak periods.
• Faster data transmission protocols in the case of ICT can be implemented to allow for
instantaneous scheduling, dispatch, and logging activities at various levels in the VPP
hierarchy.

27. Conclusion
• There are two aggregation option such as microgrid andVPP capable of enhancing
reliability, reducing the capital costs related to peaking generation plants and
tapping demand response resources even under many critical conditions.
• With many up-and-coming implementations ofVPP concepts and public rollout
programs on the rise, the popularity of theVPP is to be of great importance in the
future.
• With the increase in penetration of DERs in electric power systems, the
applications ofVPP concepts can allow for successful neutralization of the hurdles
brought by RESs’ generation uncertainties as well as management difficulties.

28. References
• Asmus, P. (2010). Microgrids, virtual power plants and our distributed energy future.The
Electricity Journal, 23(10), 72-82.
• Pudjianto, D., Ramsay, C., & Strbac, G. (2008). Microgrids and virtual power plants:
concepts to support the integration of distributed energy resources. Proceedings of the
Institution of Mechanical Engineers, PartA: Journal of Power and Energy, 222(7), 731-741.
• Wang, X., Liu, Z., Zhang, H., Zhao,Y., Shi, J., & Ding, H. (2019, May).A review on virtual
power plant concept, application and challenges. In 2019 IEEE Innovative Smart Grid
Technologies-Asia (ISGT Asia) (pp. 4328-4333). IEEE.
• Zhang,G., Jiang,C., &Wang,X. (2018). Comprehensive review on structure and operation
of virtual power plant in electrical system. IET Generation,Transmission & Distribution,
13(2), 145-156.
• Panda, S., Mohanty, S., Rout, P. K., & Sahu, B. K. A conceptual review on transformation of
micro‐grid to virtual power plant: Issues, modeling, solutions, and future prospects.
International Journal of Energy Research.

30. Questions
• What is aVirtual Power Plant?
• What are the benefits and applications ofVPP in power systems?
• What are the components of aVPP system?
• What are the control strategies used inVPP?
• Describe the operational framework ofVPP.
• Explain the bidding strategy operation ofVPP in brief
• What are the differences between conventional power plant (CPP) andVPP?
• What are the differences between microgrid andVPP?
• What are the objectives and constraints inVPP problem formulation?