Demonstration project 2 Large-scale virtual power plant integration (DERINT)

Main findings

  • The virtual power plant - "Power Hub" - enables reliable delivery of ancillary services, like voltage control and reserves, by intelligent control of distributed generation including wind farms and industrial consumption.
  • Power Hub was able to optimise the output from the available resources in different units across different markets, deciding when most value would be generated.
  • It is economically attractive for all stakeholders to participate in virtual power plants. Power Hub can be replicated across Europe, although challenges include attracting and integrating industrial units to participate in a virtual power plant.
  • Another challenge was scaling up the virtual power plant on commercial terms in Denmark due to the Danish regulatory regime and market design. Similar challenges has been identified in Germany and Spain.

Project description

When an increasing share of energy is produced by renewable sources such as solar and wind, electricity production can fluctuate significantly. In the future there will be a need for services which can help balance power systems in excess of what conventional assets will be able to provide. Virtual power plants (VPPs) are one of the most promising new technologies that can deliver the necessary stabilising services. The goal of the second TWENTIES demonstration project was to show the full potential of the VPP technology.

The demonstration project involved the development of a virtual power plant, named "Power Hub". Power Hub is an IT system that can manage both small power generators (such as small hydro power plants, industrial combined heat and power plants (CHP) or emergency generation sets, etc.) and power consuming units (such as pumps in waste water treatment, grow light in greenhouses, cooling in cold storages, etc.).

The goal of Power Hub is to ensure that all units are used optimally for the benefit of both the electrical system and the unit owner. When the units are used optimally, they are able to provide the services that are needed in the future low carbon energy system. As an example, pumping water can be stopped or started in a matter of seconds if the power system needs it. Similarly a small hydroelectric plant could gain access through Power Hub to provide services which stabilise the frequency of the power system, which otherwise would be too complex to deliver.

The VPP demonstration was set up in Denmark on fully commercial terms. This means that the VPP delivers services to the Danish power system based on the controlled units on a daily basis. It also means that the VPP only pays the unit owners a share of what can be earned from the portfolio of units in the existing markets.

Building a VPP consists of a range of tasks, which fall into three main groups: 1) Building the conceptual solution, including the IT platform 2) Reaching an agreement with the unit owner and installing unit controls 3) Running the daily operation, trading energy and fex-ibility in the markets and delivering services by optimising the units.

Results in detail

The project integrated 47 units into the VPP representing 15 different unit types. One of the conclusions from the project is that it is a challenging task to mobilise industrial units to participate in a virtual power plant; the task involves complex unit flexibility assessment and unit owner education in the complex issues of VPPs, power markets and future energy system.

Every day, Power Hub delivers services to the Danish TSO, Energinet.dk and to the Faroese power company, SEV. Power Hub is also trading daily on the Nordic power exchange NordPool. Power hub is able to deliver a wide variety of services. These include primary, secondary and tertiary reserves, dynamic reactive power control, fast frequency demand response and load shifting, where a unit's power consumption is moved from one hour to another and traded on the power markets. Load shifting can be done either to optimise costs or in order to optimise the integration of renewables.

Power Hub is able to transform the flexibility in a portfolio of units with stochastic behaviour, e.g. wind turbines and some industrial consumption units, into reliable services while still fulfilling the primary purpose of the industrial units. The demonstration project showed that wind energy is not only a challenge to the future energy system, but also an integral part of the solution. Power Hub showed how modern wind turbines can be used to deliver ancillary services and how wind turbines and batteries can work together.

The project has also shown how a VPP is able to combine a portfolio of both production and consumption units and how several units can be bundled to deliver a service. Another key feature of VPP technology that has been demonstrated, is how Power Hub is able to optimise across different markets and how it can decide, whether the flexibility generates most value today or tomorrow.

Power Hub has proven that VPP technology can deliver a wide range of services needed in the future low carbon power system, something that is not only relevant in Denmark, but which could be replicated in many countries across Europe. Power Hub has proven that it is economically attractive to build virtual power plants, however at the same time it was challenging to scale up the VPP on commercial terms in Denmark due to the Danish regulatory regime and market design.

FIGURE 2: THE DEMONSTRATION PROJECT 2'S VIRTUAL POWER PLANT - POWER HUB.

It is technically possible and economical attractive to build virtual power plants that controls a wide variety of producing and consuming distributed energy resources. Virtual power plants can deliver a wide range of services, that will all be needed from new sources when the future low carbon power system has to be balanced.