According to a recent white paper by GridBeyond, a Houston, Texas-based company providing wireless energy management and control systems for energy flexibility in industrial, manufacturing, transport, logistics and other sectors, virtual power plants (VPPs) have the potential to boost grid reliability by integrating renewable energy sources.

VPPs are cloud-based networks of distributed energy resources that can include solar panels, batteries and smart devices. The use of renewable energy sources can enhance power generation to balance electricity supply and demand in real time.

Policy, climate change, geopolitics and consumer preferences are pushing the energy industry to evolve at a rapid pace. In addition to policy and regulation that put VPPs at a disadvantage compared with traditional grid investments, according to GridBeyond, engineering and operational challenges resulting from complex coordination and control mechanisms necessary to manage a variety of distributed energy resources are specific to VPPs.

GridBeyond believes the use of artificial intelligence (A.I.) and robotic trading in VPPs can lessen some of those challenges, allowing VPPs to emerge as a “transformative solution.” Overcoming those issues could enable VPPs to become a critical decentralized alternative to leverage renewable energy generation to meet net-zero targets amidst the need for grid balance and add sustainability, resilience and affordability to the grid.

“To reach net zero, distributed flexibility is not optional,” said Sean McEvoy, chief product officer and president of GridBeyond North America. “Flexibility is the primary tool at our disposal for reshaping the patterns of demand and generation to accommodate clean energy sources.”

According to McEvoy, enabling flexible demand that optimizes the use of renewable energy could allow utilities to bring in new revenue, maximize savings, manage price volatility and add resilience. He insists that VPPs will play an invaluable role in the energy system by offering distributed flexibility to balance energy demand and generation and helping keep energy affordable.

It would also reduce reliance on gas during periods of low renewable generation by integrating multiple distributed energy resources into one network.

“This approach is crucial for ensuring the resilience of our energy supply while moving towards a clean energy future,” McEvoy said.

The company views VPPs as a scalable, real-time, cost-effective solution for growing energy needs¾in addition to decarbonization goals¾and believes it’s important for users to understand the benefits of and best practices associated with them.