Assessment of Network Management Services Provided by Virtual Power Plants

Distributed energy resources (DER) typically help to increase the share of Renewable Energy Systems (RES) in the energy mix and decrease emissions of the power system. Their location in the network and their capacity is generally based on optimization studies to minimize power losses and congestion, while balancing line loading and node voltages. The quantification of this impact in technical and economic terms may help define a tariff, or structure a payment scheme for DER owners, and an incentive to participate in the energy mix in systems where markets are absent, e.g. enabling third-party integration in mini-grids, or vertically integrated utilities. In addition, virtual power plants (VPP) can aggregate and coordinate these DERs to provide a single power profile as an aggregation service in return for a payment through an adjusted tariff structure. This study discusses a methodology to quantify the techno- economic benefit to the system, in an attempt to explore potential opportunities for VPP implementation. A modified, intentionally congested, IEEE 30 bus network is used, with solar PV and Battery Energy Storage Systems (BESS), to quantify the impact of aggregated DER coordination in terms of power losses and congestion mitigation. The network management services market for the VPP considers two use cases: the offset of fuel- based generation and the replacement of ’Peaker’ plants. A high-level approach for assigning an economic value to these technical benefits is also discussed, considering the impact of the size of the VPP and its share in the energy mix.