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DOE: Pathways to Commercial Liftoff: Virtual Power Plants

77 points by vikrum 3y ago

leetrout 3y ago
Never heard of a "virtual power plant". So they are aggregate power generation instead of a fixed plant... interesting naming choice. > Virtual power plants, generally considered a connected aggregation of distributed energy resource (DER) technologies, offer deeper integration of renewables and demand flexibility, which in turn offers more Americans cleaner and more affordable power. https://www.energy.gov/lpo/virtual-power-plants https://www.energy.gov/lpo/virtual-power-plants
- hosh 3y ago
  I heard of the concept for some time but I guess someone is coining it as a term to make it an easier sell.
  - Animats 3y ago
    Right, this is new hype for an old concept. It's mostly load management, with some batteries. Calling this "virtual power plants" is deceptive. It doesn't generate power. It just moves the load around in time a bit. There are limits to how much benefit that can yield. At some point, customers will want to heat their water or charge their car. Much of this is a attempt to deal with the problem of intermittent wind power. Wind power varies about 4:1 over the course of a day. Here's today's graph for CAISO, for the West Coast.[1] And for PJM, for the East Coast[2]. Both had about a 4:1 range today, and for both, it bottomed out about now, in late morning. A huge tie line from California to Pennsylvania would not have helped. Peak wind output today was before dawn, which is the lowest period for load. At least with solar you know when there's going to be output. But even that can vary about 2:1 from day to day in PJM's area.[3] The important question to ask is, if the grid has N hours of storage, how often is there a power shortage? What should N be? A few hours? A few days? [1] https://www.caiso.com/TodaysOutlook/Pages/supply.html https://www.caiso.com/TodaysOutlook/Pages/supply.html [2] https://dataviewer.pjm.com/dataviewer/pages/public/wind.jsf https://dataviewer.pjm.com/dataviewer/pages/public/wind.jsf [3] https://dataviewer.pjm.com/dataviewer/pages/public/solar.jsf https://dataviewer.pjm.com/dataviewer/pages/public/solar.jsf
    - sanderjd 3y ago
      > It's mostly load management, with some batteries. There is some amount of distributed generation out there as well, in the form of either oil or natural gas backup generators, which can be used similarly as batteries. Edit to add: This wasn't meant as a disagreement with your point. I don't think the existence of a small amount of generation changes the fundamental equation you pointed out on this.
- SamBam 3y ago
  To be clear, I think it's as much about the aggregation of "Distributed Energy Resources," DERs, as about the aggregation of generation. From my understanding, a DER can be as simple as a smart thermostat that can receive a signal from the utility company to set the AC up a couple of degrees during a period of high electricity demand. As energy is fungible, saving 1kW by turning off 1kW of less-necessary usage is exactly the same as generating an additional 1kW to cope with demand.
  - soulofmischief 3y ago
    Exactly the same, except during the hottest and coldest parts of the year, I pay an electric bill and still feel miserable.
    - ZeroGravitas 3y ago
      The point of these schemes is to provide you with energy at precisely those hottest/coldest parts of the year. If you want to pay more for potentially redundant backup and/or take the risk of the whole system going down, then you're only going to be more miserable.
      - soulofmischief 3y ago
        Yes, I am aware of how these schemes are marketed. I have lived in homes that use these schemes and it's not worth it. Maybe you live in a better climate, but not getting adequate heating or cooling when I need it most negates the entire purpose of having heating and cooling.
  - magicalhippo 3y ago
    > exactly the same Of course except it's only the same if they're closely connected. Here in Norway, while energy regions are connected throughout the country, the cables are quite limited between certain areas. So generation here might not help for usage there. So being able to control usage, or having extra batteries connected near the loads, can be even more useful than extra generator capacity far away.
- ghouse 3y ago
  It's a horrible naming choice and it shows the industry preconception that a power plant is a large, transmission-interconnected facility. It also, IMHO holds on to an outdated concept that all generation must be centrally dispatched. There are plenty of concepts that allow distributed dispatch including voltage (which in turn can be controlled based on local conditions). Finally (and perhaps most importantly), it implies that only devices that export generation are part of the solution. The supply and demand must be balanced in real-time. And the demand side of the equation is often much less expensive than the supply side.
  - idiotsecant 3y ago
    What? It's the opposite of literally all these things.
    - sunk1st 3y ago
      Yeah I think that’s why GP is saying it’s a poor choice of name.
      - SamBam 3y ago
        But if the industry is the one naming it, why are they going against their own "preconceptions?" I feel like GGP is the one with the preconception about the name "power plant," while the industry (as shown here) is starting to use it to be this broader term encompassing distributed generation and price-influenced demand, etc etc.
        ghouse 3y ago
        As an industry, the term "power plant" is something that generates power (electric energy). However, much of the DER opportunity is not generation, but load. Which is why the term "Virtual Power Plant" is a misnomer and predisposes people to only be thinking about the generation side of the supply/demand equation.
        3y ago
- gwbas1c 3y ago
  One example is coordinating Tesla Powerwalls (home battery backup): https://www.tesla.com/support/energy/virtual-power-plant/pge https://www.tesla.com/support/energy/virtual-power-plant/pge > By becoming a part of the Tesla Virtual Power Plant (VPP) with PG&E, your Powerwall will be dispatched when the grid needs emergency support. Through the Emergency Load Reduction Program (ELRP), you will receive $2.00 for every additional kWh your Powerwall delivers during an event. I should point out that I have a Powerwall, and I have no incentive from my electric utility to use it in any way. Overall, with rebates, it cost slightly more than a standby generator, and but it requires no maintenance, so it's "worth it" for me. But, $2.00 back on a kwh is pretty nice, IMO.
  - noveltyaccount 3y ago
    Wow - $2.00 is crazy. I pay $0.15 per kWh (pacific northwest, inexpensive hydroelectric power). 13X, quite an incentive, even if rare.
    - zbrozek 3y ago
      California's PG&E is the biggest utility in the US. In their territory electricity on the default residential plan ranges from $0.41 to $0.54 per KWh.
      - callalex 3y ago
        And they’re raising prices again next year.
      - gwbas1c 3y ago
        Still, that's 4x back. It really helps incentivize buying a larger powerwall, and disincentivizes the power company from sapping the battery dry right before you need it.
        zbrozek 3y ago
        Yeah, I'm not saying it's a bad deal for the battery owner, but rather that it isn't the huge spread that you had assumed based on a reasonable electricity price. :shrug:
- 7thaccount 3y ago
  Yes. VPPs was the more common academic term used for many years. Recently, FERC came out with Order 2222 that essentially paved the way for Distributed Energy Resources (DERs) to participate in the wholesale electricity markets (think organizations like CAISO that determine the optimal schedules for thousands of power plants on an hourly and 5-minute basis via a market) via a DER Aggregator. So if you take all these infinitesimally small sources and add them up, a single entity can be a market player for them as a kind of tiny virtual power plant. Naturally, this is extremely complicated and took years to get through the legal processes and for the various grid operators to get it figured out. It's still a work in progress.
deleted 3y ago
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chongli 3y ago
Sounds like this opens up the possibility of a “virtual” power generation company to operate entirely by, say, leasing rooftop space (for solar cells) all over a grid and trading on the open market as a single producer rather than needing all of the individual property owners to do their own trading. Seems reasonable to me!
- datadrivenangel 3y ago
  There are several companies that do this for electric car chargers!
whiddershins 3y ago
I listened to a whole Joe Rogan podcast where a guest kept advocating for using nuclear to balance out the intermittent nature of solar and wind. I could never wrap my mind around how this makes sense. Nuclear has a fixed output, it doesn’t scale up and down the way fossil fuel plants do. If your nuclear capacity can cover the worst case where solar and wind aren’t producing, it can cover all cases, and the solar and wind become irrelevant. Seems like the linked concept is similarly making something more complicated in the hopes that somehow makes it better. Like bundling subprime mortgages.
- robertlagrant 3y ago
  It's definitely not perfect, but e.g. with pumped hydro, you can run it in peak hours when demand exceeds baseline supply.
- 2OEH8eoCRo0 3y ago
  > Nuclear has a fixed output A fixed thermal output or a fixed electrical output?
- datadrivenangel 3y ago
  Modern nuclear plants can scale much more aggressively than older plants. This is also true of coal plants as well. Still not perfect to have them be load following resources though.
- idiotsecant 3y ago
  That's exactly what you want for easy control of grid stability. Say you typically fluctuate between 100 and 150 GW of demand. You turn on 80GW of nuke, leave it running all the time, and then as resources come available from intermittent sources those can contribute to total load requirements. If you have a wide enough diversity of intermittent sources this works well. The problem with intermittent generation sources is that you must either store energy or overprovision generation to make up for the gaps in availability (or make wildly expensive transmission improvements but that is another discussion). For reasons of expense and reliability you must make a tradeoff between how much of your generation is reliable baseload and how much is intermittent generation. Nuke + intermittent sources is a very good match.
klysm 3y ago
Putting the name aside, this seems like an important step forward.
- antr 3y ago
  I’ll say something unpopular, but the best VPP alternative out there is the transmission system operator (doing its job well). VPPs are a great way for utilities and other companies to get customers hooked into long-term contracts and milk for more fees.
datadrivenangel 3y ago
I wrote a book on the topic of Virtual Power Plants! [0] It's good to see the DOE taking this seriously. [0] Virtual Power : The Future of Energy Flexibility
- idiotsecant 3y ago
  How do wheeling charges work in schemes like this? If I have, for example, a fleet of EVs signed up for my VPP program and I want to sell battery power onto the open market I am putting a not insubstantial load on the local residential distribution systems that are not usually designed for this kind of power flow. Is this captured somehow in the financial model? Surely I don't get to ride that infrastructure for free?
  - datadrivenangel 3y ago
    EV charging and distribution is a big issue for the grid, because it does require a lot of investment in heavier infrastructure, literally more wires so that you can get enough power to charge your car. Grid operators are grumpy about needing to make this investment. Networking all of the chargers / vehicles into a VPP, means you can actually defer some of that investment (don't have all the vehicles charge at the same time or at full speed if the local distribution is congested), or provide a valuable service to the grid in the form of demand response (Hey grid operator, this fleet of cars always charges between 5:30pm and 7pm. How much would you pay for 50 Megawatts of lower consumption?). So basically it makes it cheaper to charge that fleet of EVs from the grid infrastructure and operation perspective if you charge them smarter and make the whole system smarter. The VPP operators use this as an additional revenue service for the actual asset. The grid is overall cheaper, and the VPP operator and asset owner get a cut of those savings.
    - mschuster91 3y ago
      > Grid operators are grumpy about needing to make this investment. Boo fucking hoo. Grid operators have made absurd profits by running grids that hadn't seen an inspection crew for decades, to the tune that they regularly cause deadly wildfires. PG&E is particularly egregious here - the 2018 Camp Fire was likely caused by a broken C hook dating back to the line's construction in 1921 [1]. Sorry, I can't sympathize with grid operators. [1] https://hackaday.com/2020/09/17/closely-examining-how-a-pge-transmission-line-claimed-85-lives-in-the-2018-camp-fire/ https://hackaday.com/2020/09/17/closely-examining-how-a-pge-...
walr000s 3y ago
The best explanation of Virtual Power Plants that I've encountered, from Patrick McKenzie: https://www.bitsaboutmoney.com/archive/markets-in-power/ https://www.bitsaboutmoney.com/archive/markets-in-power/
photochemsyn 3y ago
From the report: > "DOE uses a broad definition of VPPs (virtual power plants) that includes a variety of mechanisms for aggregating and orchestrating DERs (distributed energy resources)" > "Just as different types of traditional power plants contribute to the grid in different ways (e.g., nuclear plants provide baseload generation, and wind farms provide variable generation), so too do different configurations of VPPs." Historically grid structure in the USA was broken down into baseload, load-following and peaker plants, a choice made based on the technological limitations of the power sources (coal and nuclear power could not be rapidly ramped up and down. so they were assigned baseload status, while hydro and natural gas could). That all fails when you put large amounts of solar and wind on the grid, e.g. a large solar PV system might generate 200% of demand at noon, (so you divert half or more to storage for use at night). Fundamentally this means scrapping the whole concept of baseload generation, and instead focusing on storage and distribution of energy from highly variable renewable sources - which is why nuclear is difficult to integrate smoothly with renewables, it's not very flexible. However, DOE is a very pro-nuclear agency, hence their reluctance to abandon the baseload concept. I suppose VPPs are a useful abstraction for managing a wide variety of resources in one geographical area, but the reality is that replacing fossil fuels with electricity across the board will require truly massive grid infrastructure investments. This will require either steep increases in energy bills for consumers, or large tax-financed government subsidies of grid infrastructure, and possibly even nationalization of the grid.
mrbonner 3y ago
What a horrible naming convention. Is it plantless power plant?
- SamBam 3y ago
  Essentially. If you can convince every supermarket in the area to designate a quarter of their overhead lights as "optional," and then install a device that allows the "virtual power plant operator" to turn off all of those lights during an unexpected spike in electricity demand, you've just "generated" the additional 100kW the grid needed in that moment, just like a regular fossil-fuel power plant would have. (And you then pay the supermarket for the electricity they "generated" by turning off their lights.) Do the same with smart thermostats, or tapping into people's power walls, etc etc etc, and you may be able to "generate" many megawatts of power without owning a plant.
  - Scoundreller 3y ago
    With phones becoming the “hub” of many homes and Apple launching some (nearly inconsequential) eco-charging functionality in ios17 to avoid charging with emitting sources are running in your area, I could see them really executing on this. (I also wish my fridge and other devices had a better ability to capture the ebb and flow of electricity prices. Even trying to do this with a “smart” thermostat, an ecobee was very difficult. Required lots of manual scheduling.)
    - megaman821 3y ago
      I have a LG fridge that can reduce its power consumption when requested. I have never seen it turn on though, so it must require some coordination by the utility that isn't there yet.
      - Scoundreller 3y ago
        I’m on time of use billing, and I don’t want my fridge to reduce its net power consumption. In fact, I want it to increase its net power consumption by running hard when rates are low, and backing off when they’re expensive. So overall cost will decrease without any spoilage impacts while consumption goes up. This approach also minimizes the amount of time the fridge is working against my air conditioner. And maximizes the time it’s working with my furnace on cool nights. The most thermally/kwh efficient fridge keeps its temperature the same at all times, but that’s not the most cost efficient/climate efficient approach. It’s like we’re not ready to have that conversation.
syntaxing 3y ago
My knowledge might be old but I’ve been told one of the biggest expense for a utility are actually Peakers (more formally known as Peaking power plants). Besides the fact they’re costly to operate compared to normal power plants (about 3X of generating cost), it takes a lot to warm up these power plants at a moment notice. VPP (as shitty as the name is) would help our infrastructure a lot, and would be a net positive for society IMO.
- Scoundreller 3y ago
  > Besides the fact they’re costly to operate compared to normal power plants (about 3X of generating cost), it takes a lot to warm up these power plants at a moment notice. Our solution in Toronto was to just run them half of the time all the time. Haaaaaaard paywall: https://www.thestar.com/news/canada/ontario-gas-plants-were-supposed-to-run-only-during-peak-periods-instead-they-re-running/article_8ba52f13-bd5a-541a-b80e-9f497ff498be.amp.html https://www.thestar.com/news/canada/ontario-gas-plants-were-...
  - syntaxing 3y ago
    Wouldn’t it be more cost effective to make a new power plant at that operating expense?
    - Scoundreller 3y ago
      I think the warm-up cost isn’t really there when the plant is operating continuously. Oddly for a peaker plant, they built these as combined cycle, which wouldn’t make financial sense if it was to only run for short periods. A “true” peaker plant is inefficient but with lots of capacity but we basically build a “proper” power plant that has good efficiency, so it’s not too bad. But makes you wonder what went so wrong in the planning (even though the mistake turned out advantageous).
leymed 3y ago
I’m not saying it will not have any impact, but will it be at the levels mentioned in the report? My consideration depends heavily on engineering of it. For example, applying this in NYC is almost impossible, and dangerous for the system. Again you can have DER aggregation at smaller levels, but hitting 20% of pick load levels seems extremely challenging.
ghouse 3y ago
The electrical grid is designed to cover the highest load (typically the hottest hour of the year; A/C drives peak load). Most of the grid is a fixed cost. The transmission lines, distribution lines and the power plants recover enormous investments whether they are used or not. The marginal costs are surprisingly low. Marginal costs of fueled (fossil or nuclear) power plants are typically < $0.05/kWh. Peak load is what drives capacity expansion -- both in wires (transmission and distribution) but also generation. Building all of this capacity to only run for < 1% of the year incurs tremendous cost. By flattening the (demand) curve (through either generation or load reduction) there are tremendous savings for society. However, electric utilities are natural monopolies, so investor owned utilities (contrasted with munis or coops) must substantiate investment to their regulators who in turn allow them to make a rate of return on their investments. So, these utilities only increase profit by increasing investment.
- szaroubi 3y ago
  There are some other interesting use cases for smarter energy consuming devices, what they call Cold Load Pickup, where a section of the grid loses power during a blackout, and power comes back. that initial spike kills equipmenton the transmission side, if you are able to delay start some equipment, you spread the load and reduce strain on the grid.
vvpan 3y ago
I work for a tech startup that is focused on cooperatives and so have been learning about the cooperatives a lot lately. Cooperative have and still are playing a great role in things like energy and farming. Much of the grid in the US has been built by cooperative. But the legislation around them is outdated and also inter-cooperative support structures are lacking, for example the massive farming lending cooperatives will not lend to energy-related co-ops. Our founders moved to Colorado to start the company (which specialized in delivery cooperatives) because Colorado offers the Limited Cooperative Association entity [0]. (As an aside I have interviewed with a startup, that we are also in communications with, called React Network [1] that is specifically focused on co-cops that coordinate energy production and storage). I am honestly not sure what point I am trying to make except that I wish co-ops played a great part in the energy future. [0] https://www.sos.state.co.us/pubs/business/news/2012/20120402_LCA.html https://www.sos.state.co.us/pubs/business/news/2012/20120402... [1] https://www.reactnetwork.io/ https://www.reactnetwork.io/
- deleted 3y ago
  [deleted]
- sanderjd 3y ago
  Would you mind sharing the company you work for? Seems really interesting! I'm also hopeful about cooperatives, but don't actually know much about what they're up to in the energy space.
  - vvpan 3y ago
    noshdelivery.co provides technology to local restaurants to operate their own delivery services (ordering app/driver management/etc). The restaurants that we partner with form a cooperative and get the software while we get a non-voting stake. I think it is quiet cool. The truth is that delivery companies are a scourge on the restaurants and restaurants will go to great length to avoid working with Grubhub, Doordash, etc. We are planning on expanding into a few more cities. If you are interested in cooperatives the most prominent public thinker on the topic these days is Nathan Schneider, who is a professor at CU Boulder and one of our advisors. For example look up an interview with him on "Frontiers of Commoning" podcast - "Nathan Schneider on Cooperatives and Digital Governance". It is an excellent listen.
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jakewins 3y ago
I work on building VPPs. Two interesting problems that come up: - Counter-factuals; you're often paying someone to not do something, and it is really, really confusing and hard sometimes to measure whether something didn't happen. The car didn't charge at 4pm.. would it have charged if we hadn't told the charger to not charge at 4pm? What if the owner planned to leave at 4.10pm anyway? - Double counting & profit sharing: There is a surprising amount of money on the table here and kind of a sudden frenzy - what happens when Ford auto-enrolls your new car into their VPP for their own purposes, and you sell it yourself to an aggregator like us, and your utility sells it too? And how do the proceeds get split?
- Scoundreller 3y ago
  Or you enrol your smart thermostat to raise its set point a few degrees during a “grid event”, but you put a heat pack under it.

77 points by vikrum 3y ago

Never heard of a "virtual power plant". So they are aggregate power generation instead of a fixed plant... interesting naming choice. > Virtual power plants, generally considered a connected aggregation of distributed energy resource (DER) technologies, offer deeper integration of renewables and demand flexibility, which in turn offers more Americans cleaner and more affordable power. https://www.energy.gov/lpo/virtual-power-plants https://www.energy.gov/lpo/virtual-power-plants

hosh 3y ago
I heard of the concept for some time but I guess someone is coining it as a term to make it an easier sell.
- Animats 3y ago
  Right, this is new hype for an old concept. It's mostly load management, with some batteries. Calling this "virtual power plants" is deceptive. It doesn't generate power. It just moves the load around in time a bit. There are limits to how much benefit that can yield. At some point, customers will want to heat their water or charge their car. Much of this is a attempt to deal with the problem of intermittent wind power. Wind power varies about 4:1 over the course of a day. Here's today's graph for CAISO, for the West Coast.[1] And for PJM, for the East Coast[2]. Both had about a 4:1 range today, and for both, it bottomed out about now, in late morning. A huge tie line from California to Pennsylvania would not have helped. Peak wind output today was before dawn, which is the lowest period for load. At least with solar you know when there's going to be output. But even that can vary about 2:1 from day to day in PJM's area.[3] The important question to ask is, if the grid has N hours of storage, how often is there a power shortage? What should N be? A few hours? A few days? [1] https://www.caiso.com/TodaysOutlook/Pages/supply.html https://www.caiso.com/TodaysOutlook/Pages/supply.html [2] https://dataviewer.pjm.com/dataviewer/pages/public/wind.jsf https://dataviewer.pjm.com/dataviewer/pages/public/wind.jsf [3] https://dataviewer.pjm.com/dataviewer/pages/public/solar.jsf https://dataviewer.pjm.com/dataviewer/pages/public/solar.jsf
  - sanderjd 3y ago
    > It's mostly load management, with some batteries. There is some amount of distributed generation out there as well, in the form of either oil or natural gas backup generators, which can be used similarly as batteries. Edit to add: This wasn't meant as a disagreement with your point. I don't think the existence of a small amount of generation changes the fundamental equation you pointed out on this.
SamBam 3y ago
To be clear, I think it's as much about the aggregation of "Distributed Energy Resources," DERs, as about the aggregation of generation. From my understanding, a DER can be as simple as a smart thermostat that can receive a signal from the utility company to set the AC up a couple of degrees during a period of high electricity demand. As energy is fungible, saving 1kW by turning off 1kW of less-necessary usage is exactly the same as generating an additional 1kW to cope with demand.
- soulofmischief 3y ago
  Exactly the same, except during the hottest and coldest parts of the year, I pay an electric bill and still feel miserable.
  - ZeroGravitas 3y ago
    The point of these schemes is to provide you with energy at precisely those hottest/coldest parts of the year. If you want to pay more for potentially redundant backup and/or take the risk of the whole system going down, then you're only going to be more miserable.
    - soulofmischief 3y ago
      Yes, I am aware of how these schemes are marketed. I have lived in homes that use these schemes and it's not worth it. Maybe you live in a better climate, but not getting adequate heating or cooling when I need it most negates the entire purpose of having heating and cooling.
- magicalhippo 3y ago
  > exactly the same Of course except it's only the same if they're closely connected. Here in Norway, while energy regions are connected throughout the country, the cables are quite limited between certain areas. So generation here might not help for usage there. So being able to control usage, or having extra batteries connected near the loads, can be even more useful than extra generator capacity far away.
ghouse 3y ago
It's a horrible naming choice and it shows the industry preconception that a power plant is a large, transmission-interconnected facility. It also, IMHO holds on to an outdated concept that all generation must be centrally dispatched. There are plenty of concepts that allow distributed dispatch including voltage (which in turn can be controlled based on local conditions). Finally (and perhaps most importantly), it implies that only devices that export generation are part of the solution. The supply and demand must be balanced in real-time. And the demand side of the equation is often much less expensive than the supply side.
- idiotsecant 3y ago
  What? It's the opposite of literally all these things.
  - sunk1st 3y ago
    Yeah I think that’s why GP is saying it’s a poor choice of name.
    - SamBam 3y ago
      But if the industry is the one naming it, why are they going against their own "preconceptions?" I feel like GGP is the one with the preconception about the name "power plant," while the industry (as shown here) is starting to use it to be this broader term encompassing distributed generation and price-influenced demand, etc etc.
      - ghouse 3y ago
        As an industry, the term "power plant" is something that generates power (electric energy). However, much of the DER opportunity is not generation, but load. Which is why the term "Virtual Power Plant" is a misnomer and predisposes people to only be thinking about the generation side of the supply/demand equation.
        3y ago
gwbas1c 3y ago
One example is coordinating Tesla Powerwalls (home battery backup): https://www.tesla.com/support/energy/virtual-power-plant/pge https://www.tesla.com/support/energy/virtual-power-plant/pge > By becoming a part of the Tesla Virtual Power Plant (VPP) with PG&E, your Powerwall will be dispatched when the grid needs emergency support. Through the Emergency Load Reduction Program (ELRP), you will receive $2.00 for every additional kWh your Powerwall delivers during an event. I should point out that I have a Powerwall, and I have no incentive from my electric utility to use it in any way. Overall, with rebates, it cost slightly more than a standby generator, and but it requires no maintenance, so it's "worth it" for me. But, $2.00 back on a kwh is pretty nice, IMO.
- noveltyaccount 3y ago
  Wow - $2.00 is crazy. I pay $0.15 per kWh (pacific northwest, inexpensive hydroelectric power). 13X, quite an incentive, even if rare.
  - zbrozek 3y ago
    California's PG&E is the biggest utility in the US. In their territory electricity on the default residential plan ranges from $0.41 to $0.54 per KWh.
    - callalex 3y ago
      And they’re raising prices again next year.
    - gwbas1c 3y ago
      Still, that's 4x back. It really helps incentivize buying a larger powerwall, and disincentivizes the power company from sapping the battery dry right before you need it.
      - zbrozek 3y ago
        Yeah, I'm not saying it's a bad deal for the battery owner, but rather that it isn't the huge spread that you had assumed based on a reasonable electricity price. :shrug:
7thaccount 3y ago
Yes. VPPs was the more common academic term used for many years. Recently, FERC came out with Order 2222 that essentially paved the way for Distributed Energy Resources (DERs) to participate in the wholesale electricity markets (think organizations like CAISO that determine the optimal schedules for thousands of power plants on an hourly and 5-minute basis via a market) via a DER Aggregator. So if you take all these infinitesimally small sources and add them up, a single entity can be a market player for them as a kind of tiny virtual power plant. Naturally, this is extremely complicated and took years to get through the legal processes and for the various grid operators to get it figured out. It's still a work in progress.

deleted 3y ago

[deleted]

chongli 3y ago

Sounds like this opens up the possibility of a “virtual” power generation company to operate entirely by, say, leasing rooftop space (for solar cells) all over a grid and trading on the open market as a single producer rather than needing all of the individual property owners to do their own trading. Seems reasonable to me!

datadrivenangel 3y ago
There are several companies that do this for electric car chargers!

whiddershins 3y ago

I listened to a whole Joe Rogan podcast where a guest kept advocating for using nuclear to balance out the intermittent nature of solar and wind. I could never wrap my mind around how this makes sense. Nuclear has a fixed output, it doesn’t scale up and down the way fossil fuel plants do. If your nuclear capacity can cover the worst case where solar and wind aren’t producing, it can cover all cases, and the solar and wind become irrelevant. Seems like the linked concept is similarly making something more complicated in the hopes that somehow makes it better. Like bundling subprime mortgages.

robertlagrant 3y ago
It's definitely not perfect, but e.g. with pumped hydro, you can run it in peak hours when demand exceeds baseline supply.
2OEH8eoCRo0 3y ago
> Nuclear has a fixed output A fixed thermal output or a fixed electrical output?
datadrivenangel 3y ago
Modern nuclear plants can scale much more aggressively than older plants. This is also true of coal plants as well. Still not perfect to have them be load following resources though.
idiotsecant 3y ago
That's exactly what you want for easy control of grid stability. Say you typically fluctuate between 100 and 150 GW of demand. You turn on 80GW of nuke, leave it running all the time, and then as resources come available from intermittent sources those can contribute to total load requirements. If you have a wide enough diversity of intermittent sources this works well. The problem with intermittent generation sources is that you must either store energy or overprovision generation to make up for the gaps in availability (or make wildly expensive transmission improvements but that is another discussion). For reasons of expense and reliability you must make a tradeoff between how much of your generation is reliable baseload and how much is intermittent generation. Nuke + intermittent sources is a very good match.

klysm 3y ago

Putting the name aside, this seems like an important step forward.

antr 3y ago
I’ll say something unpopular, but the best VPP alternative out there is the transmission system operator (doing its job well). VPPs are a great way for utilities and other companies to get customers hooked into long-term contracts and milk for more fees.

datadrivenangel 3y ago

I wrote a book on the topic of Virtual Power Plants! [0] It's good to see the DOE taking this seriously. [0] Virtual Power : The Future of Energy Flexibility

idiotsecant 3y ago
How do wheeling charges work in schemes like this? If I have, for example, a fleet of EVs signed up for my VPP program and I want to sell battery power onto the open market I am putting a not insubstantial load on the local residential distribution systems that are not usually designed for this kind of power flow. Is this captured somehow in the financial model? Surely I don't get to ride that infrastructure for free?
- datadrivenangel 3y ago
  EV charging and distribution is a big issue for the grid, because it does require a lot of investment in heavier infrastructure, literally more wires so that you can get enough power to charge your car. Grid operators are grumpy about needing to make this investment. Networking all of the chargers / vehicles into a VPP, means you can actually defer some of that investment (don't have all the vehicles charge at the same time or at full speed if the local distribution is congested), or provide a valuable service to the grid in the form of demand response (Hey grid operator, this fleet of cars always charges between 5:30pm and 7pm. How much would you pay for 50 Megawatts of lower consumption?). So basically it makes it cheaper to charge that fleet of EVs from the grid infrastructure and operation perspective if you charge them smarter and make the whole system smarter. The VPP operators use this as an additional revenue service for the actual asset. The grid is overall cheaper, and the VPP operator and asset owner get a cut of those savings.
  - mschuster91 3y ago
    > Grid operators are grumpy about needing to make this investment. Boo fucking hoo. Grid operators have made absurd profits by running grids that hadn't seen an inspection crew for decades, to the tune that they regularly cause deadly wildfires. PG&E is particularly egregious here - the 2018 Camp Fire was likely caused by a broken C hook dating back to the line's construction in 1921 [1]. Sorry, I can't sympathize with grid operators. [1] https://hackaday.com/2020/09/17/closely-examining-how-a-pge-transmission-line-claimed-85-lives-in-the-2018-camp-fire/ https://hackaday.com/2020/09/17/closely-examining-how-a-pge-...

walr000s 3y ago

The best explanation of Virtual Power Plants that I've encountered, from Patrick McKenzie: https://www.bitsaboutmoney.com/archive/markets-in-power/ https://www.bitsaboutmoney.com/archive/markets-in-power/

photochemsyn 3y ago

From the report: > "DOE uses a broad definition of VPPs (virtual power plants) that includes a variety of mechanisms for aggregating and orchestrating DERs (distributed energy resources)" > "Just as different types of traditional power plants contribute to the grid in different ways (e.g., nuclear plants provide baseload generation, and wind farms provide variable generation), so too do different configurations of VPPs." Historically grid structure in the USA was broken down into baseload, load-following and peaker plants, a choice made based on the technological limitations of the power sources (coal and nuclear power could not be rapidly ramped up and down. so they were assigned baseload status, while hydro and natural gas could). That all fails when you put large amounts of solar and wind on the grid, e.g. a large solar PV system might generate 200% of demand at noon, (so you divert half or more to storage for use at night). Fundamentally this means scrapping the whole concept of baseload generation, and instead focusing on storage and distribution of energy from highly variable renewable sources - which is why nuclear is difficult to integrate smoothly with renewables, it's not very flexible. However, DOE is a very pro-nuclear agency, hence their reluctance to abandon the baseload concept. I suppose VPPs are a useful abstraction for managing a wide variety of resources in one geographical area, but the reality is that replacing fossil fuels with electricity across the board will require truly massive grid infrastructure investments. This will require either steep increases in energy bills for consumers, or large tax-financed government subsidies of grid infrastructure, and possibly even nationalization of the grid.

mrbonner 3y ago

What a horrible naming convention. Is it plantless power plant?

SamBam 3y ago
Essentially. If you can convince every supermarket in the area to designate a quarter of their overhead lights as "optional," and then install a device that allows the "virtual power plant operator" to turn off all of those lights during an unexpected spike in electricity demand, you've just "generated" the additional 100kW the grid needed in that moment, just like a regular fossil-fuel power plant would have. (And you then pay the supermarket for the electricity they "generated" by turning off their lights.) Do the same with smart thermostats, or tapping into people's power walls, etc etc etc, and you may be able to "generate" many megawatts of power without owning a plant.
- Scoundreller 3y ago
  With phones becoming the “hub” of many homes and Apple launching some (nearly inconsequential) eco-charging functionality in ios17 to avoid charging with emitting sources are running in your area, I could see them really executing on this. (I also wish my fridge and other devices had a better ability to capture the ebb and flow of electricity prices. Even trying to do this with a “smart” thermostat, an ecobee was very difficult. Required lots of manual scheduling.)
  - megaman821 3y ago
    I have a LG fridge that can reduce its power consumption when requested. I have never seen it turn on though, so it must require some coordination by the utility that isn't there yet.
    - Scoundreller 3y ago
      I’m on time of use billing, and I don’t want my fridge to reduce its net power consumption. In fact, I want it to increase its net power consumption by running hard when rates are low, and backing off when they’re expensive. So overall cost will decrease without any spoilage impacts while consumption goes up. This approach also minimizes the amount of time the fridge is working against my air conditioner. And maximizes the time it’s working with my furnace on cool nights. The most thermally/kwh efficient fridge keeps its temperature the same at all times, but that’s not the most cost efficient/climate efficient approach. It’s like we’re not ready to have that conversation.

syntaxing 3y ago

My knowledge might be old but I’ve been told one of the biggest expense for a utility are actually Peakers (more formally known as Peaking power plants). Besides the fact they’re costly to operate compared to normal power plants (about 3X of generating cost), it takes a lot to warm up these power plants at a moment notice. VPP (as shitty as the name is) would help our infrastructure a lot, and would be a net positive for society IMO.

Scoundreller 3y ago
> Besides the fact they’re costly to operate compared to normal power plants (about 3X of generating cost), it takes a lot to warm up these power plants at a moment notice. Our solution in Toronto was to just run them half of the time all the time. Haaaaaaard paywall: https://www.thestar.com/news/canada/ontario-gas-plants-were-supposed-to-run-only-during-peak-periods-instead-they-re-running/article_8ba52f13-bd5a-541a-b80e-9f497ff498be.amp.html https://www.thestar.com/news/canada/ontario-gas-plants-were-...
- syntaxing 3y ago
  Wouldn’t it be more cost effective to make a new power plant at that operating expense?
  - Scoundreller 3y ago
    I think the warm-up cost isn’t really there when the plant is operating continuously. Oddly for a peaker plant, they built these as combined cycle, which wouldn’t make financial sense if it was to only run for short periods. A “true” peaker plant is inefficient but with lots of capacity but we basically build a “proper” power plant that has good efficiency, so it’s not too bad. But makes you wonder what went so wrong in the planning (even though the mistake turned out advantageous).

leymed 3y ago

I’m not saying it will not have any impact, but will it be at the levels mentioned in the report? My consideration depends heavily on engineering of it. For example, applying this in NYC is almost impossible, and dangerous for the system. Again you can have DER aggregation at smaller levels, but hitting 20% of pick load levels seems extremely challenging.

ghouse 3y ago

The electrical grid is designed to cover the highest load (typically the hottest hour of the year; A/C drives peak load). Most of the grid is a fixed cost. The transmission lines, distribution lines and the power plants recover enormous investments whether they are used or not. The marginal costs are surprisingly low. Marginal costs of fueled (fossil or nuclear) power plants are typically < $0.05/kWh. Peak load is what drives capacity expansion -- both in wires (transmission and distribution) but also generation. Building all of this capacity to only run for < 1% of the year incurs tremendous cost. By flattening the (demand) curve (through either generation or load reduction) there are tremendous savings for society. However, electric utilities are natural monopolies, so investor owned utilities (contrasted with munis or coops) must substantiate investment to their regulators who in turn allow them to make a rate of return on their investments. So, these utilities only increase profit by increasing investment.

szaroubi 3y ago
There are some other interesting use cases for smarter energy consuming devices, what they call Cold Load Pickup, where a section of the grid loses power during a blackout, and power comes back. that initial spike kills equipmenton the transmission side, if you are able to delay start some equipment, you spread the load and reduce strain on the grid.

vvpan 3y ago

I work for a tech startup that is focused on cooperatives and so have been learning about the cooperatives a lot lately. Cooperative have and still are playing a great role in things like energy and farming. Much of the grid in the US has been built by cooperative. But the legislation around them is outdated and also inter-cooperative support structures are lacking, for example the massive farming lending cooperatives will not lend to energy-related co-ops. Our founders moved to Colorado to start the company (which specialized in delivery cooperatives) because Colorado offers the Limited Cooperative Association entity [0]. (As an aside I have interviewed with a startup, that we are also in communications with, called React Network [1] that is specifically focused on co-cops that coordinate energy production and storage). I am honestly not sure what point I am trying to make except that I wish co-ops played a great part in the energy future. [0] https://www.sos.state.co.us/pubs/business/news/2012/20120402_LCA.html https://www.sos.state.co.us/pubs/business/news/2012/20120402... [1] https://www.reactnetwork.io/ https://www.reactnetwork.io/

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sanderjd 3y ago
Would you mind sharing the company you work for? Seems really interesting! I'm also hopeful about cooperatives, but don't actually know much about what they're up to in the energy space.
- vvpan 3y ago
  noshdelivery.co provides technology to local restaurants to operate their own delivery services (ordering app/driver management/etc). The restaurants that we partner with form a cooperative and get the software while we get a non-voting stake. I think it is quiet cool. The truth is that delivery companies are a scourge on the restaurants and restaurants will go to great length to avoid working with Grubhub, Doordash, etc. We are planning on expanding into a few more cities. If you are interested in cooperatives the most prominent public thinker on the topic these days is Nathan Schneider, who is a professor at CU Boulder and one of our advisors. For example look up an interview with him on "Frontiers of Commoning" podcast - "Nathan Schneider on Cooperatives and Digital Governance". It is an excellent listen.

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jakewins 3y ago

I work on building VPPs. Two interesting problems that come up: - Counter-factuals; you're often paying someone to not do something, and it is really, really confusing and hard sometimes to measure whether something didn't happen. The car didn't charge at 4pm.. would it have charged if we hadn't told the charger to not charge at 4pm? What if the owner planned to leave at 4.10pm anyway? - Double counting & profit sharing: There is a surprising amount of money on the table here and kind of a sudden frenzy - what happens when Ford auto-enrolls your new car into their VPP for their own purposes, and you sell it yourself to an aggregator like us, and your utility sells it too? And how do the proceeds get split?

Scoundreller 3y ago
Or you enrol your smart thermostat to raise its set point a few degrees during a “grid event”, but you put a heat pack under it.