A virtual power plant (VPP) is a network of various medium-sized energy-generating units, combined to form a power plant consisting of photovoltaic systems, wind turbines, biogas plants, hydroelectric power plants and combined heat and power plants.
In a virtual power plant, the interconnected decentralized energy-generating units, the Distributed Energy Resources( DER), are controlled via a central control station and feed the generated energy into the smart grid.
The virtual power plant concept relieves the load on the power grid by distributing electricity intelligently, even during energy peaks via load management. Surplus electricity can be temporarily stored in energy storage units and neighborhood storage facilities or sold via the power exchange. It aims to smoothly integrate many renewable energy units into existing power grids. This is achieved through the flexibility of all networked units, such as short-term ramping up and down of electricity production and consumption. In addition, power traders in a Virtual Power Plant can use live data to improve forecasting and trading of renewable energy. Thus, Virtual Power Plants are gradually taking over the role of traditional power plants by marketing their electrical energy on wholesale markets and taking responsibility for a balanced grid.