Why Virtual Power Plants Can Be Powerful for Latin America
This article was originally published by Avolta Energy on 3rd December 2020.Driven by Forward Thinking Distributors and Property Developers, Virtual Power Plants are Growing Globally. Are Costa Rica and Honduras Missing Out?
Virtual Power Plants (VPP) unlock flexible and resilient energy capacity and as a result, are transforming energy markets. Although growing quickly around the globe, VPP’s are almost absent in Latin America. A virtual power plant (VPP) is an energy platform that uses new technologies such as artificial intelligence (AI), cloud computing, internet of things (IoT), and renewable energy generation.
The Internet has changed the world including the world of energy. With plummeting costs of renewables and an explosion of innovations and new efficiencies, more and more consumers, businesses and governments are investing in solar energy, electric vehicles, batteries, and smart meters. With Smart Grid structures expanding and distributed energy resources growing exponentially, Virtual Power Plants are becoming a bridge between the two.
What are Virtual Power Plants and why do VPPs matter? We aim to explain why Central America shouldn’t be left behind and how consumers, businesses and governments stand to gain from this novel concept. But first, to understand VPPs one must understand Distributed Energy Resources.
The Future Is Distributed: Distributed Energy Resources (DERs) are taking over – but what are they?
Distributed Energy Resources describes the vast array of small and large scale energy technologies owned by consumers and businesses and even governments. DERs include mature technologies such as distributed generation (e.g., solar PV and wind), demand response, electric vehicle fast chargers (not only cars but the electrification of buses, rail, ports and fleets), energy storage (batteries, thermal storage), microgrids (which facilitate renewable generation, storage and grid resiliency), energy efficiency and smart appliances.
These resources all connect to the grid at the distribution level. And as the penetration of DERs increase, the distribution network changes from a single-source radial network to a multi-source grid, meaning utilities must maintain voltage limits, watch for short circuit interruption limits and maintain the interconnected network’s stability, as DERs make the whole process more complex and challenging. On the upside, the grid can be transformed to be more reliable and efficient.
