With VPPs, energy consumers can not only consume electricity, but also supply it, selling back to the grid the energy they generate from home solar arrays, batteries or other on-premise energy sources. For example, South Australian electricity provider Energy Locals and automaker Tesla are collaborating on South Australia’s Virtual Power Plant, which eventually will comprise up to 50,000 solar and Tesla Powerwall home battery systems. Homeowners who install the systems are expected to cut their electrical costs by more than 22% compared to the standard electricity price, Tesla says.
Yet another benefit of VPPs is security. As the Colonial Pipeline hack illustrates, traditional infrastructure is increasingly vulnerable to security breaches by hackers and other bad actors. If a traditional power plant is compromised, the whole plant goes down. With VPPs, however, there is built-in redundancy that mitigates risk; if a hacker brings down a single asset in the network, the network’s other assets can continue operating.
VPPs can be protected using the same security methods that are utilized in edge computing—i.e., computing where processes and applications operate as close as possible to data’s point of origin, like running mobile apps on smartphones instead of on remote servers. For example, VPPs can be protected with edge-based firewalls, researchers suggest in the March 2021 edition of the journal Energy Informatics.
Edge security is a well-recognized concept used to protect users and apps at the farthest reaches of a network. That information is protected using a built-in security stack to thwart “zero-day” threats, malware and other vulnerabilities at the point of access. Using this method, network operators can securely steer traffic to the nearest point of access, according to digital technology developer Citrix.
Manufacturers and others that use edge computing are investing heavily in solutions that will keep their technology secure. Those investments undoubtedly will benefit other users and use cases—including VPPs, which will continue to benefit from security advancements in the many other sectors that utilize edge computing.
In the Cloud and on the Edge
Their benefits have persuaded many industry experts to predict swift growth for VPPs. The consulting firm Fortune Business Insights, for example, predicts that the global market for VPPs will reach $2.85 billion by 2027, an increase of 27.2% over 2019, when the market was valued at $87 million.
“The electricity networks of 2030 will not use digital, they will be digital,” says Matt Rennie, a strategic regulatory advisor at Rennie Partners, an Australian firm that provides energy advisory services.
“By 2035 to 2040, the electricity system will mostly constitute decentralized Internet of Things devices effectively communicating through virtual power plants and distributed energy systems.”