The number of Distributed Energy Resources (DERs) in power systems has increased significantly in recent years, making it challenging to effectively harness and control distributed energy in power grids. DERs include Distributed Renewable Energy Sources (DRES) like wind and photovoltaic power generation (PV), storage devices and Distributed Traditional Energy Sources (DTES) like diesel generators and gas turbines. Simplified and effective grid balancing with DERs is a critical requirement to nurture further DER adoption and realize our collective goal of achieving clean energy transformation with grid modernization.

Currently, the energy sector generates more than a quarter of global greenhouse gas emissions. More than 80 countries in the world joined hands at the Conference of Parties (COP-26) climate summit in Glasgow in 2021 to limit global warming to 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial averages. Realizing the urgency of the climate challenge, most are now making a concerted effort to roll out affordable no or low-carbon technology-based distributed power generation.

Turning the corner from fossil fuels with VPPs

Turning the corner from fossil fuels to rely more on renewable energy sources will require more micro-grids and nano-grids capable of supporting a large number of energy-generating and storage sources. This increases the complexity of grid balancing issues precipitously. Utilities will likely face increasingly difficult demand predictions and, consequently, issues with dispatching and controlling generation. The centralized Virtual Power Plants (VPPs) aggregate enormous amounts of data, increase the computational load on the centralized database and require a robust and reliable digital backbone to address the large volume of data transfer and issues like latency, handling-data back pressure, multi-protocol support etc. This is where shifting from centralized Virtual Power Plants (VPPs) to a distributed model poses an intriguing solution in the equitable balancing of the grid.

Is a distributed model the way forward for VPPs?

While VPP has proven to be a successful technology, it continues to be complex, resource-intensive, and vendor-specific, and the problem lies with its centralized architecture. Centralized VPPs aggregate the entire data of the grid into one platform to balance it. As it scales up, the issue of grid balancing becomes increasingly complex.
Apart from the computational load of the massive amount of data it tries to process centrally, it could also cause latency or data-back pressure and require a very robust architecture. The fundamental problem remains the same at every level, i.e., the need to balance demand and supply response (whether at the grid level, micro-grid level, or nano-grid level). Distributed VPP proposes that the balancing problem can be solved at the layer at which it arises, and the results can be aggregated.

Distributed VPP includes a mindset shift wherein both data aggregation and grid balancing are distributed using collaborative smart nodes at different layers of the grid. Distributed VPPs propose a structure where multiple distributed VPP nodes collaborate with their peer, parent, or child nodes. This is made possible by modularizing functionality and standardizing interfaces. This hierarchy of distributed VPP nodes collectively resolves the grid balancing challenge. We essentially break down the massive problem of centralized grid balancing and chop it into smaller bits where the data is aggregated and processed at the nodes, and the outcomes are managed to balance the grid collaboratively. We simplify the problem by resolving it at the lower levels where the data is less.

Distributed VPP harnesses the edge computing capabilities of modern devices. Data gets collected at the nano-grid level and processed there itself. Edge devices also enable running AI-based algorithms to help with real-time consumption and generation forecasts. Such an architecture brings many benefits, including an open ecosystem, and could lead to a software-defined, vendor-neutral smart grid.

Simplifying power distribution with Distributed VPPs

The central tenet behind making technology like VPPs future-proof lies in its scope to modularize (nodes) and deploy at different layers of the grid. Though they are modularized and deployed at the nano-grid, micro-grid, and even at the distribution-grid level, they are expected to deliver the same result as centralized VPPs through collaboration. Such modularization of functionality and standardization of interfaces enable many benefits, including plug & play functionality of DERs, interchangeability, interoperability, and zero to reduced vendor dependency. Most importantly, it can encourage mass-level DER adoption with reduced complexity and plug-and-play functionality for end-users and pave the path to a transformed ‘greener’ grid.

Partnering with the right service provider is critical

Definition and standardization of packaged functionality with predefined interfaces form the core of distributed VPPs. Since smart nodes are software-defined, grid balancing could become hardware-independent. This would enable it to run on any hardware (smart meter, home gateway, data concentrator, substation IED/ gateway, distribution level servers, etc.). With standardized and packaged nodes that are hardware-agnostic, these also become vendor-neutral – leading to greater flexibility for grid operators.

To realize these benefits and build future-proof grids, it is critical for OEMs and utility companies to leverage the domain knowledge and the right choices of edge computing (HW & SW) and digital technologies. A service provider with niche domain expertise and enhanced technology capabilities like Quest Global can help accelerate the charge of OEMs, smart metering manufacturers, and world leaders to build the next-gen digital grid management platforms.

Quest Global offers proven expertise in conceptualizing, building, and implementing digital grid management solutions that could position major OEMs as a breakaway success in addressing long-standing, complex power generation and distribution challenges. With the right digital grid, power generation and distribution could essentially become plug-and-play at the level of the individual user – paving the path for faster and unique streams of revenue generation and a greener footprint

Written by Manoj Vivek

on 14 Feb 2023

Director & CoE Leader

Quest Global