What is VPP, and why will it have a significant impact on software products for the energy industry? One of the broadest definitions states that a Virtual Power Plant (VPP) is a concept in the energy sector referring to a network of decentralized, often small-scale power-generating units integrated into a unified system through a cloud-based platform or software. This integration allows for centralized control and coordination of these distributed energy resources.
VPPs enable more efficient resource utilization, improved energy flow management, and enhanced grid stability. Their importance grows as variable and intermittent renewables take an increasing share of production since VPPs can incorporate demand response capabilities and power storage. Centralized control allows the enhancement of profitability for utilities, reduces costs for consumers, and balancing costs for utilities as well as contributes to network stability.
According to the definition, the most crucial aspect of VPP is the software platform. The distributed resources it aggregates can include various forms of power generation, demand, prosumers, power storage, etc. The platform plays a pivotal role, not only aggregating data abut also providing analytics for forecasting flexibility, optimization, and facilitating communication with system operators, traders, etc. Depending on the market regulations, VPPs can serve as an additional source of flexibility for utilities, participate in ancillary service bidding, or enter the wholesale power market directly or through trading partners. Regardless, the platform for data management, aggregation, optimization, and communication is fundamental.
This is where Fusebox comes in. The company began as an aggregator for energy resources in the Baltics and developed the necessary software. However, to expand its business and easily enter new markets, selling the platform proved to be the most straightforward approach. The company succeeded in its expansion plans as a software company, with customers now spanning Scandinavia, the Baltics, and Southern Europe.
As Edvardas Norkeliunas, Strategic Partnership Manager of Fusebox puts it, every utility needs a VPP for efficiently managing customer portfolios and renewable resources. Larger utilities may build it themselves, but for small and mid-tier companies, software like Fusebox’s is essential. With the increasing number of prosumers and power storage capabilities, including batteries and EV charging, the market for VPP software is steadily growing, and Fusebox is optimistic about the future.
Virtual Power Plants as a service are a crucial software component in the ecosystem of tools needed to support the transition towards a more decentralized, resilient, and sustainable energy system.