A Virtual Power Plant (VPP)
aggregates the capacity of many diverse Distributed Energy Resources (DER), it creates a single operating profile from a
composite of the parameters characterizing each DER and can incorporate the impact of the network on aggregate DER output
(see Fig. 1).
A VPP is a flexible representation of a portfolio of DER that can be used to make contracts in the wholesale market and to offer services to the system operator. There are two types of VPP, the Commercial VPP (CVPP) and the Technical VPP (TVPP).
DER can simultaneously be part of both a CVPP and a TVPP.
A Technical VPP is a type of VPP. The TVPP consists of DER from the same geographic location. The TVPP includes the real-time influence of the local network on DER aggregated profile as well as representing the cost and operating characteristics of the portfolio.
Services and functions from a TVPP include local system management for Distribution System Operator (DSO), as well as providing Transmission System Operator (TSO) system balancing and ancillary services. The operator of a TVPP requires detailed information on the local network; typically this will be the DSO.
A Commercial VPP is a type of VPP. A CVPP has an aggregated profile and output which represents the cost and operating characteristics for the DER portfolio. The impact of the distribution network is not considered in the aggregated CVPP profile.
Services/functions from a CVPP include trading in the wholesale energy market, balancing of trading portfolios and provision of services (through submission of bids and offers) to the system operator. The operator of a CVPP can be any third party aggregator or a Balancing Responsible Party (BRP) with market access; e.g. an energy supplier.