Resources can include microCHPs, natural gas-fired reciprocating engines, small-scale wind power plants (WPP), photovoltaics (PV), run-of-river hydroelectricity plants, small hydro, biomass, backup generators, and energy storage systems such as home or vehicle batteries (ESS), and devices whose consumption is adjustable (such as water heaters, and appliances).
The distributed nature of VPPs requires software to respond appropriately and securely to power requests, utility billing, payments to resource owners, etc.
A VPP acts as an arbitrageur between diverse energy trading floors (i.e., bilateral and PPA contracts, forward and futures markets, and the pool).
[3][4][5][7] Five risk-hedging strategies have been applied to VPP decision-making problems to measure the level of conservatism of VPPs' decisions in energy trading floors (e.g., day-ahead electricity market, derivatives exchange market, and bilateral contracts): In the United States, virtual power plants deal with the supply side and help manage demand, and ensure reliability of grid functions through demand response (DR) and other load-shifting approaches, in real time.
[18][19] Vermont’s Green Mountain Power, works with Tesla to offer a Powerwall to participating customers at a discounted rate.
[21][22] Next Kraftwerke from Cologne, Germany operates a VPP in seven European countries providing peak-load resources, power trading and grid balancing services.
[27] In June 2024, German companies Enpal and Entrix announced plans to create Europe's largest Virtual Power Plant (VPP).
The VPP will integrate a large number of decentralized energy resources including solar panels, batteries, and electric vehicles.
[28][29] In August 2020, Tesla began installing a 5 kW rooftop solar system and 13.5 kWh Powerwall battery at each Housing SA premises, at no cost to the tenant.
As South Australia's largest virtual power plant, the battery and solar systems were centrally managed, collectively delivering 20 MW of generation capacity and 54 MWh of energy storage.
The systems cost consumers AUD $3500 and was expected to recoup the expense in 7 years under current distribution network tariffs.