Demand for electricity is increasing annually and it is putting pressure on the generation, transmission, and distribution infrastructure. Virtual power plants (VPP) are viewed as a possible component of building an improved and resilient grid by supplying power where it is needed, when it is needed. VPP are an option to even out the peaks and valleys of demand and help reduce the cost of electricity. More importantly, VPP can assist in keeping the grid operating while under stresses of high heat or excessive cold snaps.
During times when demand exceeds the grid capabilities, VPP can be tapped to provide the extra power needed until the demand subsides or until additional power sources can be brought online. In most cases, the supplemental power coming online is supplied by a natural gas plant. Batteries can provide power instantaneously, while gas-fired plants take longer to come online. Allowing a natural gas plant time to reach optimal operating conditions lowers the emissions of the plant and reduces the cost of the electricity produced. VPP in the form of batteries provide the bridge needed during ramp up.
The VPP architecture makes sense when considering battery storage for a commercial solar or wind facilities. Where I have an issue is if the utility wants to use electric vehicles (EV) or home batteries (i.e. Tesla Powerwall) as a VPP to support the grid.
In the case of EVs, the car was purchased for transportation. The stored energy in the car battery is for powering the vehicle. Consumers purchase EV solely based on the mobility aspect. Beyond the philosophical argument on the purpose of the EV, there is the practical concern of the wear and tear on the battery by multiple discharges, ultimately reducing the life of the battery.
When it comes to the home, the primary purpose of the backup battery is to provide electricity when the power is out, instead of using a gas or diesel generator. They can also be utilized to provide power to the home during periods of high electricity rates. Both of these are benefits to the home owner, although peak shaving also relieves pressure on the grid.
I understand the arguments that VPP are for the good of society and that the owner of the EV and home battery storage has benefited through publicly funded subsidies in the form of tax credits. Tax credits aim to increase the adoption of EVs. Solar subsidies that include home batteries are incentives designed to reduce demand on the grid, which would decrease CO2 emissions from fossil fuel plants. They are not intended to provide power back to the grid. Some also argue that more VPP are needed because they help low-income households by lowering electrical rates. I think this is a stretch as the reduction in cost is incremental and cannot make a material impact on the masses.
So, what do I propose? I absolutely support batteries for VPP at the commercial level. Large renewable energy projects have the scale to make a real impact on the efficiency and robustness of the electrical grid. However, for personal cars and homes we must be careful to keep any program strictly voluntary and without coercion. Giving the local utility access to my home and transportation for the good of society feels too much like Big Brother in George Orwell’s 1984. I am not ready to relinquish control to the electric utility.
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