In the face of the "dual carbon" goal, the global energy industry is undergoing a revolutionary change, and virtual power plants (VPP) and energy storage technology have been the two "stars" of the energy field. Although they are both dealing with energy scheduling and optimization, there are immense differences in purpose, methods of implementation and usage scenarios. So how does energy storage differ from a virtual power plant? How do each of them play to their respective strengths in the electricity system? This paper will discuss in great detail the necessary differences between them and the value of co-development.
Virtual Power Plant (VPP) is a smart scheduling based energy management system. It is not a material power plant but leverages information technology to integrate diverse distributed energy resources (e.g., photovoltaic, wind, energy storage, electric vehicles, load side resources, etc.) to establish a "virtual" energy management network.
The core objectives of VPP are to maximize energy efficiency and supply and demand of electricity, and to act as a scheduling function with flexibility in the electricity market. It can relieve the stress on the grid at peak load, and can release or store energy when the power is short, thus helping to keep the grid stable.
Multi-energy integration: It is able to supply different types of energy resources such as photovoltaic, wind, energy storage and electric vehicles so as to achieve efficient complementarity.
Intelligent management: It employs cloud computing, big data, artificial intelligence and other technological means to achieve real-time monitoring and intelligent scheduling.
Market participation: It can be a market participant in the entire electricity market, providing services such as demand response, auxiliary services and electricity trading.
Energy Storage refers to storing electrical energy through some technologies and releasing it according to needs in order to achieve the flexibility and stability of power supply. The fundamental idea of energy storage is "peak cutting and valley filling", i.e., storing electrical energy during off-peak hours and releasing it during peak hours in order to level the grid load and improve the safety and economy of the power system.
Today, energy storage technology is mainly represented by the following types:
Battery energy storage (lithium batteries, sodium batteries, flow batteries) - short time power regulation and renewable energy consumption capabilities.
Pumped storage - water potential use for electricity storage, large-scale grid regulation capabilities.
Flywheel energy storage - mechanical energy storage of electrical energy, short-time high power regulation capabilities.
Hydrogen energy storage - Electrolyze water to produce hydrogen in order to realize large-scale long-term energy storage.
The most important role of energy storage:
Peak cutting and valley filling: lower the pressure load of the power grid and enhance the power utilization efficiency.
Balance fluctuation: use fluctuating power sources such as photovoltaic and wind energy to improve the stability of renewable energy.
Improve grid resilience: Provide backup power in the case of an accident or emergency on the grid to improve the safety of power supply.
Although they share a common purpose of optimizing energy management, there are basic differences in their mode of operation, mechanism of action, and application scenario.
| Comparison Dimension | Virtual Power Plant (VPP) | Energy Storage |
| Definition | Integrate distributed energy resources through information technology to achieve intelligent scheduling. | Store and release electrical energy through physical technology. |
| Core Function | Energy dispatching, optimizing grid load, and market trading. | Power storage, peak shaving and valley filling, and improving grid stability. |
| Technology Dependence | Rely on intelligent technologies such as big data, cloud computing, and AI. | Rely on physical technologies such as batteries, electrochemistry, and mechanics. |
| Energy Form | Mainly manage the flow of electrical energy and do not directly store electrical energy. | Directly store electrical energy and release it when needed. |
| Market Role | Can participate in the power market as a virtual power generation entity. | As a power infrastructure to improve energy efficiency. |
| Application Scenarios | Demand response, peak regulation and frequency modulation, load management, and grid auxiliary services. | Energy storage system, electric vehicle charging and discharging management, photovoltaic absorption. |
Although the priorities are different for virtual power plants and energy storage, they are not competitive in the future energy market, but co-development and complementarity, and encourage each other's development to smart energy jointly.
VPP+ energy storage, increase energy scheduling flexibility
Virtual power plants might integrate energy storage systems to refine scheduling. For example, during peak grid load, the VPP can command the energy storage system to release electricity and relieve the grid tension.
Since the power price is cheap, the VPP can make the energy storage device charge, and discharge it when the electricity price is high, so the energy trading income is maximized.
VPP+ PV/wind power + energy storage to maximize utilization of clean energy
Due to the volatility of wind and photovoltaic power, direct grid access may have impacts. VPP can be combined with energy storage technology to retain the excess clean energy and utilize it at the right moment to increase the rate of utilization of clean energy.
Electric vehicles and VPP create a "mobile energy storage" network
Electric vehicles will serve as mobile energy storage in the future, and VPP is able to send out a great deal of distributed electric vehicle batteries to form a "vehicle network interaction" (V2G) mode to provide stable power support for the grid.
Participate in electricity market trading to enhance economic returns
VPP is able to interconnect energy storage systems to participate in the power spot market or capacity market, and release or store power at the right moment to gain the highest returns by accurately forecasting price and load variation.
Conclusion: A new era of smart energy
The combination of virtual power plants and energy storage is transforming the control of energy, smartening the grid, making it more efficient and more sustainable. Energy storage as "energy storage" in order to ensure a stable supply of electric energy; As the "energy commander", the virtual power plant uses power resources in the most suitable time and the most suitable location.
With the ongoing development of technology, the complementarity between energy storage and virtual power plants will become more and more important, facilitating the construction of a more flexible, reliable, and low-carbon energy system. In the future, the tight coupling of virtual power plants and energy storage will open a new chapter in smart energy management, promoting the global energy to be more intelligent and green.
