Open standards are the key to scaling VPPs

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It’s no secret: the climate crisis is straining our global energy supply. Today’s grid is strained due to aging infrastructure and the acceleration of extreme weather events – and will only continue to be tested as we continue to electrify buildings and vehicles. Power outages have increased by 64% since the early 2000s, and weather-related outages have increased by 78%. Additionally, the North American Electric Reliability Corporation (NERC) recently warned in its 2023 Summer Reliability Assessment that a majority of the U.S. will face an increased risk of blackouts in response to extreme heat nationwide this coming summer.

But, solutions exist to both accelerate decarbonization and maintain reliable distribution of energy. One under-recognized response to the climate crisis is software – including virtual power plants (VPPs). Without VPPs and other distributed energy resources (DERs), maintaining reliable power supply will be increasingly difficult in the face of aging infrastructure, extreme weather events, and heightened load growth, accelerated by electrification.

Challenges to implementing SaaS to support the transition to clean energy

VPPs are a crucial component for the clean energy transition. Not only can VPPs optimize DERs to respond to variations in energy supply and demand, but they also represent a cleaner and cheaper alternative to highly polluting peaker plants, which are disproportionately located closer to disadvantaged communities. Especially as governments place emphasis on transitioning to clean energy and utilizing distributed resources such as EVs and solar panels, VPPs’ ability to integrate an array of distributed energy resources will be critical.

However, one issue with the current network of distributed energy resources is the lack of standardization within the VPP ecosystem. Also, adoption of open protocol standards has been slow in today’s increasingly crowded DERs management space. Without standardization, we won’t be able to maximize the DER’s potential in the most efficient way. Lack of standardization makes it difficult for VPPs to communicate with the different DER devices and control systems offered up by a myriad of manufacturers globally. Without easy interoperability, utilities and prosumers will struggle to adopt VPPs as a replacement for traditional power plants, despite VPPs’ obvious sustainability advantage. Open standards would promote flexibility, adaptability, and scalability with the rise of VPPs.

Additionally, regulatory barriers can impede VPPs’ implementation and integration into the grid. Open standards would bring flexibility, adaptability, and scalability with the rise of VPPs. It is only through the collaborative efforts of stakeholders that these challenges can be mitigated for the benefit of the grid.   For, example, policymakers could add an extra incentives for OEMs that promote and use open standards.

Open protocols are crucial

To overcome the challenge of standardization, open protocols must be adopted by hardware manufacturers and software platform providers. Open protocols can standardize communication channels to encourage data exchange between different VPP systems, fueling their efficacy.

Open protocols can also help new energy resources more easily integrate into the VPP ecosystem, enabling VPPs to adapt to evolving market conditions and promoting customer preferences. We need to create an ecosystem where customers can choose any DER device they prefer and remain eligible for inclusion in VPPs and microgrids, as well as overarching distributed energy resource management systems (DERMS).

My own home is a perfect example of today’s device diversity: For example, as I help my family adopt energy devices for their home, I don’t want their EV choice to prevent them from enrolling in a certain VPP or impacting their choice of thermostat.

Some steps we’ve made in creating more open standards for DERs aggregations include the Rocky Mountain Institute’s recent Virtual Power Plant Partnership (VP3), which AutoGrid joined in March 2023. VP3 brings together players from across the energy value chain, such as Ford, General Motors, and Google Nest, to remove barriers, coordinate on regulatory reform, and align on promoting open standards. Similarly, projects such as Duke Energy’s OpenFMB and the Linux Foundation’s open-source microgrid initiative highlight the growing importance of addressing interoperability and provide solutions to lowering implementation challenges and integration costs across the grid network. When integrating DERs with a VPP program, the more open the system, the more flexibility can be marshaled to provide shared value.

How utilities can do their part

The issue of open protocols is vital to scaling up both VPPs and DERMS solutions for grid management. Closed proprietary systems may offer a company short-term gains, but in the end, customers want choice – and the energy industry should give it to them. For example, I shouldn’t be prevented from joining a certain VPP in my neighborhood because of my EV choice or my thermostat decision. Combined with AI and software, utilities and grid operators can optimize their DERs, reduce costs, and improve reliability, all while staying compliant with the latest industry standards. It is up to all stakeholders involved to both recognize the importance of open protocol standards, and to work to ensure that they are embraced. This in turn can help energy providers improve the reliability of our energy supply, drive decarbonization of the energy sector, and ultimately curb the worst impacts of the climate crisis.

Source:  POWERGRID International

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