Virtual power plants provide power by aggregating energy resources, often sited at disparate locations, into a central energy network via software that controls scheduling and dispatching.
In an effort to reduce its dependence on fossil fuels, in 2014 Southern California Edison (SCE) contracted with energy network project developer AMS (formerly Advanced Microgrid Solutions) to implement a virtual power plant (VPP) project.
The project incorporates 21 hybrid electric buildings to reduce peak demand and help the utility balance the grid. Batteries installed at buildings throughout Southern California have helped reduce building energy expenses and operating costs by 10%. And when dispatched synchronously, they’re able to provide up to 10 MW of load reduction for SCE within minutes for up to four hours at a time. The power network is orchestrated by AMS’s Armada software platform, which is designed to identify and dispatch the most cost-effective energy technology for any time window.
“SCE is proving that distributed energy, properly harnessed, can provide flexibility to the grid while reducing energy costs for customers,” Susan Kennedy, CEO of AMS said in a press release. Some see this virtual model as a solution to ease the industry’s transition to include more distributed generation.
The first phase began operating in 2018. Within that first year, it was dispatched 250 times to the California Independent System Operator (CAISO) to reduce peak demand. The system reportedly delivered more than 2 gigawatt-hours of grid services in the first year of operations—a record-breaking performance for a battery-based VPP. It also provided more than $1 million in total energy cost savings to SCE customers.
For commercial and industrial energy customers, energy professionals agree that behind-the-meter battery projects such as this one can offer a cost-effective solution by reducing demand charges that can profoundly impact a facility’s utility bill while helping stabilize the grid.
What are your impressions? Do you think that virtual power plants may ease the energy industry’s transition to a more flexible distributed energy landscape?