Virtual power plants Market Future Challenges and Industry Growth Outlook 2030


Virtual power plants are a framework of decentralized, medium-scale power-causing units like wind farms, solar parks, merged heat and power units, and flexible storage systems and power consumers. Realistically a VPP is composed of multiple units of an asset that is a single type like a device or a battery in demand response program or an assorted mix of investments. These units are conveyed through the central control room of the VPP but even so stay independent in their operation and ownership.

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VPP is a conventional power plant that a group of desktop computers that are interconnected desktop computers is to a mainframe computer. Both can execute complicated computing tasks, but one engages the scattered IT infrastructure already out there. A prominent attribute of VPPs is that they can accumulate flexible capacity to superscribe peaks in electricity demand. In this manner, they can reproduce or return natural gas-fired peakers and assist inscribe bottlenecks of the distribution network but generally without a similar capital outlay.


Renewable energy penetration to drive the growth of the virtual power plant market

Growing penetration of renewable energy in the power generation sector paired with alterations in power grid dynamics from centralized to dispensed is anticipated to drive the virtual power plant market growth. Additionally, depletion in energy cost and undemanding availability of energy storage will enhance the market demand. Further, VPP is more systematic and flexible in delivering the peak load electricity in an interim notice period than conventional power plants set up to drive market growth.

Regional analysis

The European region is the leading contender to make substantial investments

Europe is making substantial investments in renewable energy and energy storage systems, pushing the demand for VPPs. For instance, Statkraft’s VPP in Germany is the largest and one of its kind in Europe. It produces more than 10,000 MW of electricity, equal to 10 nuclear reactors. Therefore, the growing share of renewable energy in Europe expands the demand for VPPs in the region.

Key segmentation

By end-user analysis

A residential segment to captivate the virtual power plant market

Depending on the end-user, the residential segment is anticipated to hold the largest market share due to growing applications of smart meters, smart home appliances, and integration with home energy management systems.

Covid-19 impact

Due to covid-19, developing economies like China and India were triumphant in the initial phases of covid-19 containment and are constantly deploying novel measures to lessen the virus’s harmful effect. European countries have witnessed a significant dip in IT infrastructure investment.


Key players

Few players operating in the global virtual power plant market include ABB, Ltd., AGL Energy, AutoGrid, Autogrid Systems, Inc., Blue Pillar, Inc., Cisco Systems, Inc., Comverge, Power Energy Management, Enbala Power Networks, Inc., Enel X, Enernoc, Inc, Flexitricity Limited, General Electric, Hitachi, Ltd., International Business Machines Corporation, Limejump Limited, Next Kraftwerke., Olivene, Inc., Open Access Technology International, Inc., Osisoft, Robert Bosch., Schneider Electric, and Siemens.

Recent developments

In July 2020, the Portland public electric company declared a pilot initiative to inspire the connection and installation of 525 home energy storage batteries in Portland, Oregon. This project will give rise to four megawatts of electricity. The allocated asset will build a VPP of small units that may function unaccompanied or in concert to service the grid.

Virtual power plant market: By technology

  • Demand Response
  • Distributed Generation
  • Mixed Asset

Virtual power plant market: By source

  • Solar
  • Wind
  • Small Hydro
  • Batteries
  • Others

Virtual power plant market: By end user

  • Industrial
  • Commercial
  • Residential

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