Pike Research: Revenue from virtual power plants will reach $5.3B by 2017

Source: Pike Research 

The concept of virtual power plants (VPPs) most often refers to the aggregation of supply-side resources, usually renewable energy resources. However, in Europe for example, the term “VPP” can also refer to the ability of commercial consumers to purchase capacity at the wholesale level via an auction from base-load fossil fuel facilities for short periods of time. However they are defined, VPPs can provide extraordinary value and services to transmission and distribution (T&D) grid infrastructure as well as to myriad stakeholders engaged in the provision of electric power

According to a recent report from Pike Research, an explosion of interest in VPPs for demand response (DR) mechanisms is transforming the overall VPP market landscape and driving strong growth in the sector. VPP capacity will increase by 65% between 2011 and 2017, rising from 55.6 gigawatts (GW) to 91.7 GW worldwide during that period. That will translate into $5.3 billion in annual revenue in 2017, the cleantech market intelligence firm forecasts.

Under a more aggressive forecast scenario, worldwide revenue for VPPs could reach $6.5 billion in 2017.

“The list of companies looking for VPP opportunities continues to grow, and increasingly overlaps with microgrid technology providers,” says senior analyst Peter Asmus. “Many of these companies are familiar names – Cisco, GE, Siemens, Schneider Electric, and IBM – but the market also includes some new names – Blue Pillar, Calico Energy, Xtreme Power, and Princeton Power Systems.”

In contrast to the microgrid sector, utilities will have to play a major role in the evolution of the VPP market, by nature of their ownership of the transmission and distribution grid infrastructure and their control over smart grid investments. Many potential VPP market participants, however, feel that the risk-adverse culture of utilities, particularly investor-owned utilities (IOUs), may limit the creativity associated with new business models, such as the VPP. It is quite possible that smaller, municipally-owned utilities may actually be more innovative in the short term, since the interests of their customers are aligned with the interests of the utility. To date, however, most high-profile supply-side VPPs have been launched in Europe, with Siemens recently announcing a planned expansion of an existing hydro-based VPP from less than 10 megawatts (MW) to 200 MW of renewable supply by 2015.



Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs