The Intertubes lit up like a Christmas earlier this month, when Elon Musk introduced the world to virtual powerhouses. Virtual power plants are not really a new thing, although it may seem so when you consider all the fuss. Still, it was nice to see the high-profile provider of rolling energy storage units focus their attention on VPPs. This is because VPPs can benefit low-income households, including those who cannot afford an electric car, roof panels or home battery systems.
Virtual power stations 101
For those of you who are new to the subject, a virtual powerhouse is just what it says. Instead of a large, centralized power plant, you ask individual taxpayers in a given area to contribute any energy they can generate or accumulate to the grid, whenever necessary.
For small-scale taxpayers, the generation is typically done by solar panels on the roof. The energy storage part can be filled by EV batteries and building-mounted batteries.
Another key element of virtual power plants is their ability to shift the demand for electricity. Even without the power generation angle, VPPs provide a valuable service by asking taxpayers – by a carrot, stick or both – to shift their energy consumption away from the highest usage periods of the day to other hours.
If all goes according to plan, VPPS could reduce electricity consumption during peak hours. Otherwise, a new gas-fired peak plant would be needed to fill the peak demand, which would be expensive. And it will contribute to global warming. And you’ll have to find a place to put it.
In recent years, it has been difficult to coordinate the activities of individual taxpayers. These days, software can get the job done.
Virtual power stations are old hat
Virtual power plants have not yet become mainstream, but they are on their way. Leading solar and energy storage company SunPower, for example, launched a massive VPP project in New York City in 2016, and Sunrun joined the VPP club in 2020.
Utilities have also started invoking the EV loading of the workplace and other applications to move the EV loading around. This includes the ERCOT Network Management Agency in Texas. ERCOT already has at least one vehicle-based VPP under its wing by the firm ev.energy (currently for freight shifting only, not vehicle-to-network operations).
The missing piece is to integrate EV charging into VPP systems with vehicle-to-network or vehicle-to-home charging. This too is already starting to happen. Earlier this spring, global clean technology firm Nuvve Holding Corp. for example at Swell Energy Inc. joined to include electric vehicles in the VPP mix for residential and commercial taxpayers.
“This collaboration will expand opportunities for residential customers to combine battery storage, solar power and smart EV charging into a comprehensive home energy system. These advanced optimization capabilities cater to both residential consumers’ energy use and EV transportation needs,” Swell explained.
EV loading and VPPs, perfect together
The new connection involves Nuvve’s network-connected building energy management services and it’s own GIVe ™ (Grid Integrated Vehicle) cloud-based software platform. GIVs provide two-way vehicle-to-network operation, meaning EV owners can use their EV battery to contribute electricity to the network when needed.
Swell’s contribution is the GridAmp Energy Resource Management System for distributed energy resources, including small-scale assets such as solar panels on the roof and built-in batteries.
The system “maximizes DER value for utilities by simultaneously providing multiple network services to the utilities in its VPP networks and offering utility customers GridRevenue betal payments for participating in the virtual power plants,” explains Swell, adding that the addition of smart EV charges an “electrified future where customers have greater control over their assets, have opportunities to trade with the power grid, and have reliable energy sources available around the clock.”
What is missing in this picture?
If you notice the pieces that are still missing, run out immediately and buy yourself a cigar. While some VPP participants at a small bank (“opportunities to trade with the power grid”) can make use of their solar and EV assets, most low- and middle-income households are largely left in the dark.
The income issue has been a persistent obstacle to the use of solar power on the roof, mainly due to bottlenecks involving rented properties and multi-family housing, in addition to financial obstacles. Environmental justice issues factor in as well. The same elements also affect the ability to buy an electric vehicle, and it limits opportunities to charge at home.
The EV part of the VPP stock puzzle will take a while to resolve, but in the meantime, the U.S. Department of Energy has been looking for ways to bring more solar power on the roof and other forms of solar power to low- and middle-income households. Virtual power plants could be part of the solution, and this is where a new VPP from a non-profit energy agency called MCE comes in.
The MCE angle on equity and renewable energy
As described by MCE, the new virtual power plant is part of the City of Richmond, California’s “Advanced Energy Community Project”, which is funded by a $ 3 million grant from the California Energy Commission. In addition to the new VPP, the program includes energy-efficient rehabilitations for abandoned homes.
The new VPP “will provide account savings and increase local network reliability, security and efficiency for low-income residents,” explains MCE.
If all goes according to plan, there will be a significant load shift from the peak hours from 16:00 to 21:00, which will result in significant cuts in utility bills, as those participating in the VPP will be rewarded for their contribution of valuable network services.
The overall project is a soup-to-nut energy equity and affordability program:
“MCE’s virtual power plant will include smart, clean energy technologies, including energy storage, smart thermostats, rooftop solar power, heat pump space and water heating, and EV charging. The VPP will initially be linked to up to 100 Zero Net Carbon Homes (ZNC Homes) and larger commercial and industrial sites. The ZNC Homes program will fund the acquisition, complete rehabilitation and resale of homes as affordable properties. ”
“These ZNC homes will be built to be energy efficient and resilient, and each home will have a full complement of smart appliances and cost-saving equipment, including solar power on the roof, battery energy storage and heat pumps,” adds MCE. “Local businesses will also have an opportunity to install batteries that provide resilience against network outages, account savings and revenue generation potential.”
We will know more after 2025, when the project is supposed to start.
For those of you who keep score at home, the project developer is ZNE Alliance, with other partners including MCE and ALCO Building Solutions, Ecoshift Consulting, Energy Solutions, mPrest, Richmond Community Foundation, THG Energy Solutions, TRC and ZGlobal.
Why Richmond?
One-fifth of Richmond households “live in poverty,” according to MCE, which is double the average for the city’s homeland, Contra Costa. It also surpasses the California state average for households under the CARE discount assistance program, at 37% compared to 25%.
If the Richmond plan succeeds, it could be a model for other communities with high rates of public assistance to switch their home supplies to energy efficiency technology and renewable energy.
ZNE Alliance is a non-profit organization that has a portfolio of state-of-the-art energy-sharing programs, including a similar Advanced Energy Community Initiative in Lancaster, San Francisco-based climate initiatives, and state-wide fleet electrification and planning initiative.
Follow me on Twitter @TinaMCasey.
Image: Solar panel array courtesy of MCE.
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