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• Published: 03 August 2020

Impacts of climate change on energy systems in global and regional scenarios

• Seleshi G. Yalew   ORCID: orcid.org/0000-0002-7304-6750 1 , 2 , 3 ,
• Michelle T. H. van Vliet 2 , 4 ,
• David E. H. J. Gernaat   ORCID: orcid.org/0000-0003-4994-1453 1 , 5 ,
• Fulco Ludwig 2 ,
• Ariel Miara   ORCID: orcid.org/0000-0001-7089-4765 6 , 7 ,
• Chan Park   ORCID: orcid.org/0000-0002-4994-6855 8 ,
• Edward Byers   ORCID: orcid.org/0000-0003-0349-5742 9 ,
• Enrica De Cian 10 , 11 ,
• Franziska Piontek 12 ,
• Gokul Iyer   ORCID: orcid.org/0000-0002-3565-7526 13 ,
• Ioanna Mouratiadou   ORCID: orcid.org/0000-0002-3541-6271 1 ,
• James Glynn   ORCID: orcid.org/0000-0001-7004-0153 14 ,
• Mohamad Hejazi 13 ,
• Olivier Dessens 15 ,
• Pedro Rochedo   ORCID: orcid.org/0000-0001-5151-0893 16 ,
• Robert Pietzcker   ORCID: orcid.org/0000-0002-9403-6711 12 ,
• Roberto Schaeffer   ORCID: orcid.org/0000-0002-3709-7323 16 ,
• Shinichiro Fujimori   ORCID: orcid.org/0000-0001-7897-1796 17 , 18 ,
• Shouro Dasgupta   ORCID: orcid.org/0000-0003-4080-8066 10 , 11 ,
• Silvana Mima 19 ,
• Silvia R. Santos da Silva   ORCID: orcid.org/0000-0002-6493-1475 13 , 20 ,
• Vaibhav Chaturvedi 21 ,
• Robert Vautard   ORCID: orcid.org/0000-0001-5544-9903 22 &
• Detlef P. van Vuuren   ORCID: orcid.org/0000-0003-0398-2831 1 , 5  

Nature Energy volume  5 ,  pages 794–802 ( 2020 ) Cite this article

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• Projection and prediction

Although our knowledge of climate change impacts on energy systems has increased substantially over the past few decades, there remains a lack of comprehensive overview of impacts across spatial scales. Here, we analyse results of 220 studies projecting climate impacts on energy systems globally and at the regional scale. Globally, a potential increase in cooling demand and decrease in heating demand can be anticipated, in contrast to slight decreases in hydropower and thermal energy capacity. Impacts at the regional scale are more mixed and relatively uncertain across regions, but strongest impacts are reported for South Asia and Latin America. Our assessment shows that climate impacts on energy systems at regional and global scales are uncertain due partly to the wide range of methods and non-harmonized datasets used. For a comprehensive assessment of climate impacts on energy, we propose a consistent multi-model assessment framework to support regional-to-global-scale energy planning.

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A framework for national scenarios with varying emission reductions

Spread in climate policy scenarios unravelled

A multi-model analysis of long-term emissions and warming implications of current mitigation efforts

Data availability.

All data that support the findings of this study presented in the figures are provided in the Source Data section associated with this manuscript. Source data are provided with this paper.

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Acknowledgements

We wish to thank the JPI Climate initiative and participating grant institutes for funding the ISIpedia project. We also thank J. Burrough for professional advice on the English of a near-final draft. E.d.C. has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 756194 (ENERGYA). J.G. is supported by a research grant from Science Foundation Ireland (SFI) and the National Natural Science Foundation of China (NSFC) under the SFI-NSFC Partnership Programme, grant no. 17/NSFC/5181. D.P.v.V., R.S. and D.E.H.J.G. are supported by the Horizon 2020 NAVIGATE project, and D.P.v.V., R.S. and D.E.H.J.G. also acknowledge support from the COMMIT and Horizon 2020 ENGAGE project. F.P. acknowledges support through the project ENGAGE funded in the framework of the Leibniz Competition (SAW-2016-PIK-1), as well as through the project CHIPS, part of AXIS, an ERA-NET initiated by JPI Climate, and funded by FORMAS (SE), DLR/BMBF (DE, grant no. 01LS19XXY), AEI (ES) and ANR (FR) with cofunding by the European Union (grant no. 776608). R.S. acknowledges the financial support from the National Council for Scientific and Technological Development (CNPq), from the National Institute of Science and Technology for Climate Change Phase 2 under CNPq grant no. 465501/2014-1 and the National Coordination for High Level Education and Training (CAPES) grant no. 88887.136402/2017-00, all from Brazil. A.M. acknowledges support from the US Department of Energy, Office of Science’s Integrated Multisector Multiscale Modelling project and National Science Foundation’s Water Sustainability and Climate grant no. 1360445. This work was authored in part by the National Renewable Energy Laboratory (A.M.), operated by Alliance for Sustainable Energy, LLC, for the US Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. S.F. is supported by the Environment Research and Technology Development Fund (2-1908 and 2-2002) provided by the Environmental Restoration and Conservation Agency, Japan. C.P. is supported by Korea Environment Industry & Technology Institute (KEITI) through Climate Change R&D Programme, funded by the Korea Ministry of Environment (MOE) (2018001310003).

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Copernicus Institute of Sustainable Development, Utrecht University, Utrecht, the Netherlands

Seleshi G. Yalew, David E. H. J. Gernaat, Ioanna Mouratiadou & Detlef P. van Vuuren

Water Systems and Global Change Group, Wageningen University, Wageningen, the Netherlands

Seleshi G. Yalew, Michelle T. H. van Vliet & Fulco Ludwig

Policy Analysis, Department of Multi-Actor Systems, Technical University of Delft, Delft, the Netherlands

Seleshi G. Yalew

Department of Physical Geography, Utrecht University, Utrecht, the Netherlands

Michelle T. H. van Vliet

Netherlands Environmental Assessment Agency-PBL, The Hague, the Netherlands

David E. H. J. Gernaat & Detlef P. van Vuuren

Advanced Science Research Center, GC/CUNY, New York City, NY, USA

Ariel Miara

National Renewable Energy Laboratory, Golden, CO, USA

Department of Landscape Architecture, College of Urban Science, University of Seoul, Seoul, Korea

International Institute for Applied Systems Analysis-IIASA, Laxenburg, Austria

Edward Byers

Fondazione CMCC, Venice, Italy

Enrica De Cian & Shouro Dasgupta

Università Ca’ Foscari Venezia, Venice, Italy

Potsdam Institute for Climate Impact Research, Leibniz Association, Potsdam, Germany

Franziska Piontek & Robert Pietzcker

Joint Global Change Research Institute, Pacific Northwest National Laboratory, College Park, MD, USA

Gokul Iyer, Mohamad Hejazi & Silvia R. Santos da Silva

MaREI Centre, Environmental Research Institute, University College Cork, Cork, Ireland

James Glynn

Institute for Sustainable Resources, University College London, London, UK

Olivier Dessens

Programa de Planejamento Energético, COPPE, Universidade Federal do Rio de Janeiro, Rio de Janeiro, Brazil

Pedro Rochedo & Roberto Schaeffer

Center for Social and Environmental Systems Research, National Institute for Environmental Studies, Tsukuba, Japan

Shinichiro Fujimori

Department of Environmental Engineering, Kyoto University, Kyoto, Japan

Laboratoire d’économie appliquée de Grenoble, Grenoble, France

Silvana Mima

Department of Atmospheric and Oceanic Science, University of Maryland, College Park, MD, USA

Silvia R. Santos da Silva

Council on Energy, Environment and Water, New Delhi, India

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Laboratoire des Sciences du Climat et l’Environnement-LSCE, Paris, France

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S.G.Y. and D.P.v.V. codesigned the study. S.G.Y. collected and analysed data, and cowrote the initial draft manuscript with D.P.v.V. S.G.Y., D.P.v.V. and M.T.H.v.V. performed sectoral analysis of energy systems. S.G.Y., D.P.v.V., M.T.H.v.V., D.E.H.J.G., F.L., A.M., C.P., E.B., E.d.C., F.P., G.I., I.M., J.G., M.H., O.D., P.R., R.P., R.S., S.F., S.D., S.M., S.R.S.d.S., V.C. and R.V. contributed to the review of sectoral and regional climate impacts.

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Supplementary Tables 1–3, Note 1 and Fig. 1.

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Data points of articles, their category and years published.

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Data points of percentage changes of climate impact per region.

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Yalew, S.G., van Vliet, M.T.H., Gernaat, D.E.H.J. et al. Impacts of climate change on energy systems in global and regional scenarios. Nat Energy 5 , 794–802 (2020). https://doi.org/10.1038/s41560-020-0664-z

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Wind power, solar power and water power are technologies that can be used as the main sources of renewable energy so that the target of decarbonisation in the energy sector can be achieved. However, when compared with conventional power plants, they have a significant difference. The share of renewable energy has made a difference and posed various challenges, especially in the power generation system. The reliability of the power system can achieve the decarbonization target but this objective often collides with several challenges and failures, such that they make achievement of the target very vulnerable, Even so, the challenges and technological solutions are still very rarely discussed in the literature. This study carried out specific investigations on various technological solutions and challenges, especially in the power system domain. The results of the review of the solution matrix and the interrelated technological challenges are the most important parts to be developed in the future. Developing a matrix with various renewable technology solutions can help solve RE challenges. The potential of the developed technological solutions is expected to be able to help and prioritize them especially cost-effective energy. In addition, technology solutions that are identified in groups can help reduce certain challenges. The categories developed in this study are used to assist in determining the specific needs and increasing transparency of the renewable energy integration process in the future.

1 Introduction

Decentralization in the electricity sector is a major step in the spread of renewable energy sources that can reduce dependence on fossil fuels [ 56 ]. Global growth of photovoltaics (PV) and wind power in recent years has been 4% and 7%, respectively. The average increase over the past 5 years reached 27% PV and 13% wind [ 37 , 80 , 109 , 116 ]. Variable renewable energy (VRE) has differences, in various ways, from conventional generation. There are six main characteristics of VRE generator output, such as: the main resource has variable, small and modular VRE generators, which are different from conventional generators and are non-synchronous and an unpredictable type of VRE, although there may be low costs in the short-term [ 5 , 50 , 59 ]. These characteristics can create various challenges to the existing power system. In this case, power system performance characteristics can be affected because of some predefined challenges, e.g. the capacity for transmission line loss or inadequate generation. In addition, the inability of portfolio generation available for matching the demand for power to the needs at any time [ 11 , 31 , 39 , 40 , 63 , 88 , 113 , 129 ].

Existing energy technologies can be used to overcome these challenges. In this case, modification technology and renewable technology can reduce some of the effects, such as the expansion of transmission networks and centralized or distributed storage devices. Integration of VREs connected to power systems requires technological solutions to achieve the decarbonization target. However, the application of a technology can cause complications caused by three main factors. First, technology choices include the implicit or explicit application of the costs, and the maturity and technological preferences of policymakers as well as companies [ 46 , 90 , 95 , 115 ]. Second, the decision on a specific solution technology is not via a single entity but rather several actors, such as utilities, system operators and regulators [ 57 , 66 , 94 , 124 ]. Finally, designated technologies vary by region including the VRE share of generator portfolios or individual power configurations for interconnected island systems [ 21 , 69 , 82 ].

From the opinions of several practitioners and researchers on energy transition, we can say that there is not enough transparency on the scope of the technologies to overcome these challenges [ 53 , 60 , 75 ]. The individual analysis offered by some proposes specific technologies, e.g. voltage management solutions for networks distributed through VRE penetration [ 70 , 77 , 98 , 131 ]. However, there are several technologies presented in this paper that have the potential to overcome broader challenges such as battery storage. In addition, scenarios for investigating the deployment of specific technologies to increase storage and transmission capacity have also been discussed [ 33 , 49 , 101 ]. However, from several studies, the substitution effects of different technology solutions are very rarely considered. Other studies focus only on some aggregate challenges, especially the challenges of flexibility [ 10 , 74 , 81 , 84 , 110 , 118 ]. However, challenges are defined at an aggregate level such that they do not necessarily lead to a particular solution technology. While some technology solutions and individual challenges might be known, some of the available literature does not provide a transparent picture. It is very important that decision-makers and researchers alike are aware of these factors when considering energy transition. When so informed, they will be better able to determine the road map and strategy on technology for the development of power system plants.

Renewable energy technology is widely covered in the literature and clearly various challenges still exist. The review carried out in this study aims to map the challenges of VRE by describing what technology solutions are appropriate to overcome these challenges. The approach taken in this paper is the analysis of data from the literature used to compile and map the list of technology solutions and challenges based on their interrelations, and to identify any lack of consistency and classify challenges to VRE. This approach aims to distinguish the observed symptoms, e.g. performance characteristics that change. Furthermore, this analysis is complemented with information from several experts to strengthen and ensure more accurate results. The findings on challenges and their linkages to technology solutions are also discussed. The relevant implications for policymakers and companies are presented in the next section. The main contribution of this review is to provide up-to-date information and useful knowledge in the deployment of RET so that energy access across the country can be improved. The systemic approach within an RE framework for information on important components of the RE ecosystem is a feature of this article.

The outline of this paper is as follows. Part one is an overview. Part two describes the materials and methods used. Part three gives the results and discusses the review and analysis regarding RET. Part three presents the findings and solutions of RET in detail. The final part is the conclusion.

2 Materials and methodology

2.1 collecting challenges and technology solutions.

Analysis of the challenges and technological solutions contained in this study were collected from literature published in journals, conferences and from some institutions in the English language. The samples analysed in this paper were mostly collected from internationally recognized journals and sources from established publishers such as Elsevier (Science Direct), Springer, Wiley, etc. [ 13 , 38 , 117 ] and from various online websites published by several official government and private institutions and research institutions. The journals analysed and reviewed in this paper contained 132 articles deemed relevant to technological challenges and solutions, especially for renewable energy.

The literature review conducted in this paper is divided into several categories to map various technological challenges and solutions comprehensively. The first category reviewed related to challenges and technological solutions from a systemic viewpoint, looking at the differences between systematic studies that focus specifically on technological solutions and challenges as well as other foci relating to VRE in an integrated manner in certain areas such as islands or villages. Reviews relating to market share issues or regulations are set in perspective from a technological or operational solution integrated directly with VRE. The final category analysed is the basis for extracting technological solutions and challenges. Studies relating to perspective technology and operations are used to eliminate ambiguity for the identification of challenges. This is due to dependence on fundamental technical phenomena. Various sequential effects in increasing the yield of VRE penetration have been reported in several studies [ 35 , 71 , 97 , 120 ]. This is done because it does not have the marginal cost that is important to the challenges of integrating renewable energy. However, the ambiguity of challenge that is defined on the economic perspective has a lower spot price so that it is following the wishes of the community in perspective. To define various technical challenges including generation, it is inadequate to adjust ambiguity because it has potential effects that are not desired by stakeholders. For example, the selection of problems, in particular, is not an institutional or organizational challenge. As such, it is very easy to overlook storage from a technical point of view. Organizations or institutions that have changed are in fact steps for technical reconfiguration. In addition, it can increase more than one market share for technology solutions to power systems.

Integration of challenges and technological solutions collected and analysed from a variety of literature is a function as well as interview input for further research processes. This challenge is not tangible, in this case, the description and the words conveyed have differences. First, the challenges are collected in a long form, then iteratively collected and repeated. The technological solutions collected are determined with two requirements, first; independently this technology must be able to mitigate one another and automatically the challenges are integrated directly into VRE. Such requirements are very necessary to prevent the grouping of sub-technologies used as technological solutions. One example of sub-technology is Smart Meter, which is very possible to respond to requests as needed. However, it cannot independently reduce challenges that are integrated directly with VRE. Therefore, it is important to classify responses to requests for technological solutions, however, not for Smart Meters. As for the second category, it is done to define technology solutions based on their respective functions as explained by [ 16 , 76 , 93 ]. Thus, the exclusion of technological solutions can gradually be helped by the differences between one another. Given the example of the request-response, the main function of this technology is to reduce power at certain times and devices. However, response requests are operated on different devices, for example, electric heaters and heat pumps so that different technological solutions cannot serve similar functions. This study develops the challenges and technological solutions based on the various literature reviewed. The identification of all interrelated technological solutions is described with specific challenges.

The list of challenges as explained earlier will be refined with literature and reviews relating to challenges according to their level and challenges related to overall causality (Table 1 ). The relationship between the challenges and the technological solutions analysed shows that the two are mutually exclusive. Therefore, the analysis methodology applied in this study aims to find out the causes, management tools and the standard tools. Besides, the purpose of applying this method is to identify the main causes of certain problems and events as the root causes [ 14 , 36 , 112 ]. Categories with failure modes on micro-networks that can be used to find various errors and resolutions are found in the method [ 34 , 48 , 52 ]. The method is applied to identify the increasing symptoms of penetration of VRE collected from various literature. The symptoms analysed represent various effects that have adverse effects on performance characteristics for the power system. The identification of challenges found in the literature is then mapped based on the symptoms of each specific VRE characteristic that is the root of the problem.

3 Result and discussion

3.1 defiance.

There are eight categories of problems in increasing VRE penetration found in some of the literature as shown in Table 2 . Furthermore, the problems that have been identified were divided into four main categories as requirements for basic performance for power systems. The dominant performance requirement for end consumers is one of sufficient power quality. This power quality consists of a continuous and uninterruptible power supply with a steady-state of voltage and current. In addition, if there is an instant matching, it is better to stay awake and safe. The basic category of VRE can be responsible for power quality challenges that include the modularity of the VRE generator and the fact of dissonance. Furthermore, the flow was categorized as transmission and distributed power efficiency. Multiple stream categories were the cause of the challenge compared to the other categories. Modularity, location constraints and VRE were the biggest part of the flow of challenges. The frequency of controls and challenges was categorized as stability to the power system to restore the system after a blackout. The cause of the stability of this challenge was due to the modularity of the VRE generator and the synchronization of the generator. The relationship between the challenges with the balance of supply and demand for active power in the short and long term of the system was categorized into power balance. This included a wider coordination system of speed capacity in the power system to the generator and ramp to a minimum. The main cause of the challenges was the uncertainty and variability of VRE. The main problem from the results of the analysis has given a bottom-up challenge category that was consistent by adjusting the problems contained in the power system to increase VRE penetration. A detailed review of the interrelated challenges between VRE characteristics and challenges is the basis of the review in this paper.

The results of the analysis of the main problems contained in an electricity network problem that includes a mismatch of demand and electricity supply are shown in Fig.  1 . Schematic description of the analysed problem was categorized into five chains, i.e. the causal effects of different VRE characteristics. Further analysis was carried out to ascertain the level of detail of each so that the problem can be resolved as quickly as possible before the selection of challenges interrelation analysis. Demand and supply that do not have in common certainly have a variety of different reasons besides increasing VRE penetration. For example, delivery limitation from nuclear power plants and coal is one of the reasons because the power system is less flexible [ 74 ]. However, the main focus of this paper discusses the challenges and integrated technological solutions and causes of the connection to the increased VRE penetration. The main problems analysed are eight causes caused by the increased VRE penetration as summarized in Fig. 1 . A list of the challenges that has been summarized includes descriptions and categories of each as well as the symptoms observed and references as shown in Table  3 . Twenty six challenges have been identified as a whole and most of them are challenges related to power system stability and power flow.

Analysing the root cause to balance challenges

3.2 Technologies of Solutions

Categorical and technological solutions and challenges are generally not specifically available in the literature. This is because most categories are implicit and have differences in the focus of each research. The study of power systems are flexible such as technology that can consume and produce power actively [ 25 , 97 ]. Meanwhile, research on electricity networks tends to focus on technology for power distribution and transmission only ([ 99 , 100 ]. Technology solutions that are comprehensively registered are not included in the technology identification as reported in the study [ 63 ]. Categorization of technology solutions is determined such as transformation in the energy sector and conclusions with a higher level. Research on top-line classification using two characteristics assigned to technological solutions has been reported by [ 54 ]. Transformations in the energy sector that lead to distributed or centralized systems are characteristics as reflected in the literature [ 19 , 22 , 26 ]. Therefore, the difference between distributed and centralized technology solutions can be used at a higher or lower level of system challenge. Technology with one side of generation and transmitted technology that is distributed with the other side can be categorized into the second as reported in several kinds of literature. Technology flexibility can be classified as technological solutions such as technology that contributes to system flexibility producing or consuming active power or better known as grid technology that is also classified as a technological solution. The characteristics of technological solutions can be divided into four groups through two assignments. The group which is categorized as two assignments includes a description, e.g. potential applications and solutions for each technology solution as shown in Table  4 . Twenty one technology solutions have been identified; 10 of which are distributed technology solutions, while the remaining 11 technological solutions are centralized. Besides, 21 technological solutions are also distinguished from the flexibility and grid technology systems. Whereas, there are 8 flexibility technologies and 13 grid technologies.

Grid technology is considered more attractive than flexibility technology because grid technology can serve both centralized and distributed systems. An estimation solution in a grid distribution system can estimate or measure a particular grid area. While responding to requests to serve multiple applications can be done with technology flexibility. Centrally distributed and distributed technology systems are very similar when they were first seen. However, more closely, the design between the two shows the difference. Where the ability to serve the application is distinguished from the operator and the owner himself. This difference is illustrated in the case of a stored and distributed system. On the other hand, storage with a distributed system is generally a battery unit installed at the household level with a closed state. Optimized independent consumption of these units is generally found in households, e.g. end consumers or stand-alone. While centralized storage systems such as water pump storage units or batteries are connected. The purpose of this application is for a short period during peak periods or to maintain the system’s power stability. Whereas centralized distributed storage is generally found in the operator or utility system.

3.3 Interrelationships between solutions to challenges

After completing the identification of technological solutions and challenges for integrated VRE, an analysis was carried to overcome the challenges as shown in Table  5 . Challenges contained in the scope of solutions can ignore the number of technological solutions so that defined challenges can be addressed. Successful solution spaces are identified as illustrated in Table  6 . Where the potential solutions contained in technological solutions that refer to several challenges can be addressed as quickly as possible. Because the space and potential of qualitative solutions are numerical comparisons and very limited to be used. Observation matrices made from the perspective of solutions such as high potential solutions and overall challenges are technological flexibility. VRE generators and distributed conventional generators that have a high level of potential solutions are included in the flexibility technology group, for example, large conventional generators with low potential solutions and conventional generation. Furthermore, distributed technological solutions tend to be higher compared to centralized systems. However, distributed grid technology has special exceptions especially for limiter or harmonic filter devices. Finally, the unique value that grid technology has on specific challenges include direct current control systems that have high voltage (HVDC) and power flow that can accurately solve problems such as long transmission distances. However, these challenges can generally be addressed by utilizing flexible technology.

Contributions made by the solution technology to solve the challenges are described in Tables  5 and 6 . Challenges that are local and site-specific have a narrower scope because the solution can only be done by the distributed solution technology, modified distributed VRE generators or additional technology solutions, e.g. harmonic filter. The whole technology group can solve various flow challenges, except technology-centred flexibility that has limitations in solving flow problems. The difference in solution space is included in the category of flow challenges starting from a narrow space to a wider space. The challenge of stability can be solved by a system technology solution by controlling at the system level centrally. Thus, the challenges of flow and distributed technology networks cannot solve challenges to stability, unless the system level can be aggregated. Stability categories such as challenges have wider solution space; however, systems in control interactions cannot be improved. To be able to balance, challenges can only be done by flexibility technology so that existing challenges can be tailored to the needs and active power consumption, excerpt for the increase in the more important VRE estimates. In general, the challenges in the balance category have a wider solution space than the availability of generations in the long run.

Three insights are very important in integrating VRE and decarbonization for the energy sector. The first process discusses two insights for overcoming integrated VRE challenges, e.g. a different power system. The last insight illustrates the results of research that can improve policymaking in the energy sector transition. Solution space for different challenges is the first point, while earlier observations are made for several types of technology that can solve specific challenges. However, the intuitive analysis of the results of expert interviews shows that business people and policymakers are not very familiar with the technological solutions that can be used to solve certain challenges. It is very clear that this technology falls into different categories. However, the development of different solution technologies can reduce the economic viability of a single technology and diminish market potential. Contributions in the decline in market price levels have a relationship with the things mentioned above. This is the same as the balancing power market in Germany. In this case, storage institutional frameworks, increasing VRE forecasts, changing demand responses simultaneously can significantly reduce market prices [ 43 , 51 , 87 ].

An illustration of the balance and challenges of stability can be used further as an example. The results of the interviews with experts clearly show that each different technology category can function as technology e.g. request responses available only focus on a centralized solution. Therefore, large scale and conventional generation are competitive technologies. However, the distribution of technological flexibility is not focused on analysing the more competitive technological landscape. This can be said as a prominent relationship to the potential influence of grid technology on technology flexibility, e.g. VRE estimates that increase significantly. This is because the size of the market is reduced to the demand response and storage technology. Technology like this, in general, can be used as a counterweight to a certain size of the market by looking at the quality of market participants. Lack of knowledge of technology and its groups is the main reason since competitive technology can be used for decision-making information for processes in a smoother energy transition.

The distribution of solution technology portfolios in each region for VRE integration contained in the literature seems to be very generic. Thus, the guidance given to companies and policymakers always fails to develop business policies and strategies. For future decision making, it can be assisted through an interrelation matrix such as preparing proposals and technology roadmaps both nationally and internationally. This aims to be able to decarbonize the energy sector. Interrelation material functions to match each category as well as some of the history of each country. Every quality challenge has occurred regionally for high distributed VRE penetration so that the spread of flexibility is needed especially distributed technology networks. Countries with a high penetration of VRE generators are southern England, southern and northern Italy and southern Germany [ 109 ]. Although the availability of data spread flexibility is not available for distributed technology networks in certain regions, projects such as the RD&D smart grid are technologies with very high priority for policymakers and companies in these countries [ 24 , 28 , 78 ]. The challenge of flow for the transmission rate reached by countries such as Germany, in general, requires a technology system with a centralized network. Such systems, such as transmission networks or amplifications, must be expanded, active power control and HVDC transmission systems. Germany is currently preparing several large projects that can be utilized by using technology. This is done after the assessment phase in determining the design and size of the complex installation has been completed.

Countries such as Ireland and Spain have done similar things, both of which have faced stability challenges. On the other hand, the transmission operator system is set as the centralized controller of the VRE generator. It aims to the needs of VRE generators to support network stability [ 3 , 102 , 108 ]. Besides, the investigation was carried out to ease the limitation of the stability criteria. Finally, solving the challenge of balance can only be done through technology flexibility. California, for example, is a country that have difficulty of being able to maintain power balance when the sun changes night so that the VRE generation has decreased significantly [ 32 ]. To encourage investment in storage with more flexible generators and environmentally friendly renewable energy, the State of California has introduced several new products [ 2 , 29 , 30 ]. Thus, interrelation matrix can be concluded that its function can be carried out by business people and those who make policies in identifying solutions technology groups. Finally, the challenges that are prevalent in certain areas can be reduced and the formulation of steps and policy strategies in supporting the dissemination of technology can be easily carried out.

Frequent debates between actors to prioritize technological solutions in VRE and irrigation management in the energy sector have often been carried out. Priority for technology solutions in integrating VRE with costs and ease of implementation is reported by several researchers ([ 21 , 35 , 99 , 100 ]. This perspective has short-term benefits, also, the potential solutions that are perpetuated from this perspective are differences in facing challenges. Technology solutions are prioritized based on their respective solutions so that technology flexibility can be used as a solution to the challenges of VRE. This is as stated by experts in supporting the potential of technological flexibility ([ 99 , 100 , 126 ]). The results of the analysis can support the call for decision-makers adjusted to market rules or the placement of newly applied policies. Remuneration schemes for reactive power are introduced in the regional market. However, technology ratings are determined solely based on their respective potential and do not take into account other technological solutions that contribute to solving challenges. Besides, the solution space is different among all challenges. To consider these factors, the ranking of technologies can be adjusted to their potential in solving challenges. The preference for the deployment of this flexibility technology is specifically found in distributed and centralized VRE. Protection strategies with appropriate equipment can solve specific challenges, and higher interests can be achieved by the following perspectives. Response to requests both small and large is part of the technology solution. In addition, there are large generators with lower priority because of the limitations of the potential for more unique solutions. Relevantly to distinguish VRE integration, there are two examples large, small demand response spreads and large flexible conventional generators. Cost savings from existing solutions can be realized in the short term. However, it is not enough to only deal with the scope of the existing challenges or potential. The aspects discussed can be assumed to confirm the benefits of the results of the analysis for policymakers as a whole.

The results of the analysis carried out have important limitations to be considered when interpreting the final results. A review of specific research on existing challenges can improve VRE penetration. However, additional challenges which are not listed in this study can also face challenges such as the electric power system. At the same time, analysis of challenges was also found in power systems with lower VRE penetration. Specifically, the analysis conducted in this study is a challenge that is directly related to technology solutions. This analysis does not measure one technology solution that can solve only certain challenges. In addition, the future developments beyond the scope of this analysis can be reduced, e.g. the emergence of new solution technologies that can change frequency stability criteria or more robust end-user equipment such as variable frequency drives. Furthermore, the specific costs of the solution technology, the urgency of the challenges or the feasibility of implementing the solution technology are not considered. This is due to environmental constraints such as high land, social areas such as the public for receiving the final transmission line. This quantification is adapted to specific contexts with differences in power system characteristics. Furthermore, high levels of uncertainty are more vulnerable when considered such as revenue and costs than differences in applications and technology solutions. This need is needed for the need to think in grouping portfolios or technologies that focus on the completion of integrated VRE.

4 Conclusion

Specifically, the review in this research is to study the integration of VRE systems that are connected with modern power systems and technology to overcome challenges. Besides, the need for power system technology in increasing VRE market share with complex integration is also discussed. The collection of challenges undertaken in this study was drawn from a variety of literature relating to technology solutions in integrating VRE. The challenges developed can consistently integrate VRE which is the root problem of this analysis. The results of this analysis are supplemented by data from interviews of experts who have helped in investigations related to technology solutions and their challenges.

The results of the analysis with some insights outlined in the study can be summarized as follows

VRE integrated with challenges can affect the characteristics of the power system.

Technology solutions that vary with the number of challenges can be significantly overcome. In general, technology flexibility has a higher solution potential than the use of grid technology.

The identified technological solution facilities are intended to be able to overcome challenges in several categories.

Identification of challenges from various practice literature can be arranged and collected based on the root of the problem to produce each of the more exclusive challenge categories.

Categories and collections of technology solutions are used to test challenges that can be overcome by a single technology.

The size of potential solutions becomes very important for companies or policymakers in promoting certain technologies and their respective solutions.

Some of the descriptions presented in this review are a starting point for future research related to this topic. The relationship between technology solutions and challenges is one of the new fields of research. This is done with an estimated cost compared to the use of different solution technologies and can be introduced comparatively to the environment as a whole. Life Cycle Assessment (LCA) can be used to measure costs integrated with VRE because the installed capacity with future projections is available [ 41 , 107 , 114 , 125 ]. This system can significantly improve recommendations on policies issued. Overall, the development of individual solutions technology that is integrated with VRE is an issue that has a high price for the transition in the energy sector in a sustainable manner. In this case, a further investigation between the characteristics of different power systems and geographies is on one side of the technology solutions and challenges with different sides.

5 Nomenclature

VRE Variable Renewable energy

HVDC High-Voltage Direct Current

RE Renewable Energy

LCA Life Cycle Assessment

RET Renewable Energy Technology

PV Photovoltaics

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Acknowledgements

This research supported by PNBP Universitas Syiah Kuala, Research Institutions and Community Service.

About the authors

Erdiwansyah: Born in Desa Meunafa Kec. Salang, Kab. Simeulue Aceh Province at 14 March 1984. Erdiwansyah is a lecturer at the Faculty of Engineering, University Serambi Mekkah, and Banda Aceh, Indonesia since 2014 until now. In 2020 this was registered as a PhD of Engineering Student at Universitas Syiah Kuala. The Master’s degree was pursued at the Department of Electrical Engineering at Universitas Syiah Kuala, Banda Aceh, Indonesia, completed in 2016. Furthermore, the bachelor’s degree was obtained in August 2012 from the Faculty of Engineering Department, Universitas Serambi Mekkah Banda Aceh. Currently, besides studying, he also helps research professors at Universitas Syiah Kuala, Banda Aceh.

Mahidin: Born in T. Gajah Kec. Tnh. Jambo Aye at 3 April 1970, the eldest one out of 6 siblings. Finished the elementary school in SDN Lhokbeuringen T. Gajah at 1982, Junior High School at SMPN 1 and Senior High School at SMAN 1 Panton Labu, Kec. Tnh. Jambo Aye, North Aceh, in 1985 and 1988, respectively. Moreover, undergraduate degree was earn at August 1994 from Department of Chemical Engineering, Syiah Kuala University. Magister degree was pursued at Department of Chemical Engineering, ITB in October 1999, and received Doctor of Engineering in Resource and Energy Science from Graduate School of Science and Technology, Kobe University in September 2003. He was awarded a professor in chemical engineering in 2018. Fields of research are treatment and utilization of energy resources, especially renewable energy resources and mix of energy (energy diversification).

Husni Husin Ph. D, is a Professor of Chemical Reaction Engineering at Syiah Kuala University. She joined Chemical Engineering Department since December 1994; Born: 1965, Samalanga, Aceh, Indonesia; Education: Syiah Kuala University (1990); Institute Technology Bandung (2000); National Taiwan University Science and Technology (NTUST) Taiwan (2011); The title of her dissertation is “Fabrication of La-doped NaTaO3 via H2O2 Assisted Sol-gel Route and Their Photocatalytic Activity for Hydrogen Production”; Her research interests are: Nanomaterial for Clean Energy production (Photocatalytic, Solar cell, Biodiesel, Biofuel, Fuel Cell), Heterogeneous Catalyst and Application, Adsorbent and Application;

Nasaruddin received the B.Eng. degree in Electrical Engineering from Sepuluh Nopember Institute of Technology, Surabaya, Indonesia in 1997. Then he received M. Eng and D. Eng in Physical Electronics and Informatics, Graduate School of Engineering, Osaka City University, Japan, in 2006 and 2009, respectively. He is a lecturer at Electrical Engineering Department, Syiah Kuala University. He was head of master of Electrical Engineering Programme; graduate school of Syiah Kuala University. Currently, he is head of Electrical and Computer Engineering Department, Faculty of Engineering, Syiah Kuala University. He has published several papers in international journals and accredited national journals. His research interests include digital communications, information theory, optical communications and ICT applications for disaster. He is a member of IEEE and IAES.

Dr. Ir. Muhammad Zaki, M. Sc is a lecturer and researcher in Chemical Engineering Department, Faculty of Engineering, Unsyiah since 1992. Received a Bachelor degree (Ir) in Chemical Engineering Department of Unsyiah, then continued S2 (M.Sc) and S3 (Dr.) at Universiti Kebangsaan Malaysia in Chemical and Process Engineering Department.

Muhibbuddin I completed my Ph. D in Technical and Vocational in Mechanical Engineering from The State University of Padang, Indonesia, in 2016 under the supervision of Prof. Dr. Nizwardi Jalinus and finished Master of Engineering degree in Mechanical Engineering Joint Programme between Gadjah Mada University and Bandung Technology Institute, in 2012. Since 2007 worked as Traineer Machining at Sandvik Light Industrial Park PT. Freeport Indonesia Tembagapura Papua Indonesia and resigned in 2008 for graduating as civil servant. Since college, I have been interested in Energy Conversion Machines especially water turbines, windmills and applied engineering. Besides studying, I am also active in Laboratory and Micro Hydro Power Plants Development Centers and research final project Bachelor; “Design and Manufacture of Transmission System a Portable Propeller Water Turbine 4 kW Capacity for Micro Hydro Power Plants”. The Master of Engineering focuses on the research; “Study of Utilization of Bamboo Parts as Blades of Pelton Water Turbine for Enhancing Rural Energy Technology to Support the Energy Independent Village Program”. Doctoral Research; “The development of Cooperative Project-Based Learning (CPBL) models for Energy Conversion Machines in Technical Vocational Education and Training in Mechanical Engineering”. I served as Head of Devision Human Resources Teacher and Education Personnel (Echelon III) Southwest Aceh Regency Education and Culture Office from 2018 to 2019. Since October 1, 2019 until now I am joined as a lecturer in Mechanical and Industrial Engineering, Faculty of Engineering, Syiah Kuala University, Banda Aceh.

The funding of this research is the grand research of the professor with the contract number of (32/UN11.2.1/PT.01.03/PNBP/2020).

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1. Erdiwansyah: The first author acts as the author of all article content and data collection such as literature searches and other data that support this research. 2. Mahidin: The second author acts as the draft writer of the article and also as a review for the refinement of the article before it is sent to this journal. 3. H. Husin: The third author acts as a controller of the writing done by the first author. In addition, the third author is also tasked with analyzing the literature data collected and written by the first author. 4. Nasaruddin: The fourth author acts as a drafter and design of articles written by the first author. In addition, the fourth author is also a policy maker for this article and serves as the final review and editing of this journal. 5. M. Zaki: The fourth author acts as a contributor to research funding in addition to funding from the grand research. The fourth author also acts as analysis and refinement of the final article. 6. Muhibbuddin: This sixth author acts as a fund contributor for checking language and words and sentences for English language experts. The sixth author has also helped to revise the end of the journal jointly with all the authors in this article. The author(s) read and approved the final manuscript.

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Erdiwansyah, Mahidin, Husin, H. et al. A critical review of the integration of renewable energy sources with various technologies. Prot Control Mod Power Syst 6 , 3 (2021). https://doi.org/10.1186/s41601-021-00181-3

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• Integration RE
• Energy source
• Technology system energy
• Power system
• Variable RE

• Open access
• Published: 27 August 2024

Virtual power plants: an in-depth analysis of their advancements and importance as crucial players in modern power systems

• Sobhy Abdelkader 1 , 2 ,
• Jeremiah Amissah 1 &
• Omar Abdel-Rahim 1 , 3  

Energy, Sustainability and Society volume  14 , Article number:  52 ( 2024 ) Cite this article

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Virtual power plants (VPPs) represent a pivotal evolution in power system management, offering dynamic solutions to the challenges of renewable energy integration, grid stability, and demand-side management. Originally conceived as a concept to aggregate small-scale distributed energy resources, VPPs have evolved into sophisticated enablers of diverse energy assets, including solar panels, wind turbines, battery storage systems, and demand response units. This review article explores the evolution of VPPs and their pivotal roles as major stakeholders within contemporary power systems. The review opens with a definition of VPPs that clarifies both their fundamental traits and technological foundations. A historical examination of their development highlights major turning points and milestones that illustrate their transforming journey.

The methodology used for this article entailed a thorough examination to identify relevant studies, articles, and scholarly works related to virtual power plants. Academic databases were used to gather relevant literature. The literature was organized into categories helping to structure and present information in a logical flow based on the outline created for the review article . The discussions in the article show that the various functions that VPPs perform in power systems are of major interest. VPPs promote the seamless integration of renewable energy sources and provide optimum grid management by aggregating distributed energy resources, which improves sustainability. One of the important components of this evaluation involves taking market and policy considerations. Examining worldwide market patterns and forecasts reveals that VPP usage is rising, and that regulatory frameworks and incentives have a bigger impact on how well they integrate.

Overcoming obstacles is a necessary step towards realizing full VPP potential. For VPPs to be widely adopted, it is still essential to address technological and operational challenges as they arise. Diverse stakeholders must work together to overcome market obstacles and promote the expansion of the VPP market. This analysis highlights the potential for VPPs to propel the evolution of contemporary power systems toward a more sustainable and effective future by highlighting areas for future research and development.

There is an urgent need for creative and sustainable alternatives as the world’s need for energy rises, while fossil fuel-based power generation methods are increasingly scrutinized for their environmental effects [ 1 ]. Centralized alternating current power networks have been widely installed and used worldwide since the 1880s. Evaluations from the 2023 statistical global energy review [ 2 ] revealed that about 82% of the world’s primary energy source comes from fossil fuels like coal oil, and natural gas but their utilization produces greenhouse gas emissions that harm the environment and cause climate warming which has triggered the current global climate crisis [ 3 ]. The contribution of the different sources to world energy consumption is shown in Fig.  1 .

Global energy sources data

On the other hand, energy demand has grown significantly as a result of global economic growth. The demand for electricity has increased steadily over the past decades, by an average of 15%, and is anticipated to increase by 30% by 2040 [ 4 ]. This calls for innovative ideas to support the demand while looking out for the environment. Therefore, distributed energy resources (DERs) must be considered to lessen the detrimental environmental impacts of fossil fuels [ 1 ]. DERs are decentralized energy systems that produce, consume and store energy and are preferably located close to where electricity is consumed. These resources include batteries, wind turbines, solar panels, etc. DERs have been integrated in the power system networks (PSN) and have reduced the effects of energy generation from fossil fuels, furnishing stakeholders with economic and technical benefits [ 5 ]. While DERs offer power systems opportunities, they also bring with them challenges because of their intermittent and stochastic nature. DERs are often described as stochastic and intermittent due to their inherent characteristics and the factors that influence their generation. This nature of DERs is caused by elements including weather changes, operational uncertainties like maintenance, and equipment performance, which can result in unanticipated variations in DER generated or connected output. Instability in the grid is brought on by the rising use of DERs on the demand side, which worsens load demand fluctuations. As a result, real-time monitoring and dispatching are essential for the grid’s safe operation [ 6 , 7 , 8 , 9 ]. Furthermore, the power system needs more adaptability, which can be provided by several mechanisms, such as demand-side management, and energy storage systems (ESS). The only way to properly use these sources to increase their grid contributions is through optimal coordination between different agents [ 10 ].

Over the years, various research has been conducted to address the above challenges and many solutions have been proposed. VPPs have emerged as a ground-breaking solution in an era of energy transition and growing emphasis on sustainable power generation, altering the landscape of contemporary power systems [ 11 ]. VPPs have evolved as key players in promoting efficiency, flexibility, and resilience in the energy industry thanks to their capacity to integrate a variety of energy supplies and improve grid management [ 12 , 13 ].

A VPP is an energy management system that aggregates and coordinates diverse array of DERs, including photovoltaics, wind turbines, battery energy storage systems (BESS), and demand response technologies. The primary function of a VPP is to optimize the collection of these DERs in response to grid conditions, energy demand, and market signal. Through advanced control algorithms and real-time monitoring capabilities, VPPs dynamically adjust energy dispatch schedules, balances supply and demand, and enhance grid stability and reliability.

It is important to note that the concept of VPPs shares some basic similarities with that of the smart grid. However, unlike the VPP which focuses on the aggregation and optimization of DERs, smart grid, on the other hand, encompasses a broader range of functionalities aimed at modernizing the entire electricity supply chain. It can be said that the VPP augment the operation of the smart grid by providing ancillary support like supply and demand balancing to the smart grid.

The combination of these various resources enables the VPP to function as a cohesive and adaptable entity, to be able to react in real-time to grid signals and market conditions [ 14 , 15 ]. In the late 1990s, a pioneering shift in energy research and innovation emerged with the exploration of aggregating distributed resources into a unified virtual power entity, laying the groundwork for the conceptualization and development of VPPs [ 13 ]. Since then, VPPs have evolved from theoretical notions to real-world applications owing to technical developments, and breakthroughs in communication technology. The adoption of VPPs has been hastened by the spread of smart grid technologies and the rise of renewable energy resources (RERs), making them a crucial component of contemporary power systems [ 12 , 16 ].

It is impossible to overstate the importance of VPPs as significant participants in contemporary power systems. VPPs are essential for facilitating the seamless integration of intermittent renewable resources into power grids as they shift from fossil fuel-based generation to renewable-dominated systems [ 3 , 17 , 18 ]. In addition, VPPs can control electricity consumption patterns to correspond with variations in renewable generation. Demand-side management improves grid reliability and efficiency by lowering peak demand and reducing grid congestion [ 19 , 20 ]. VPPs also significantly contribute to the optimization of the energy market. VPPs are crucial actors in the developing electricity market because of their involvement in energy trading and the provision of ancillary services, which help to stabilize prices and maintain system resilience [ 11 , 21 ]. A typical architecture of a VPP is shown in Fig.  2 . With the aid of technology like cloud computing, a VPP aggregates various power consumers, ESS, and power generators to provide flexible adjustments. A communication protocol is used by the components of a VPP to transfer data to the VPP communication system. This communication protocol enables efficient coordination for the VPP to adjust energy production which allows supply to the grid with dependable cost-effective electricity via the electricity market [ 22 ]. The data acquisition platform aids in gathering information about the generation, consumption, and state of charge of the portfolio of DERs for optimal decision-making.

Architecture of a VPP

From the above discussion, it is clear that VPPs have become an important player in modern power systems, providing a dynamic and revolutionary method of managing energy. The idea of VPPs has recently received a lot of interest in energy systems. Studies have provided insightful information by highlighting their potential to transform the way we produce, distribute, and use power. It is critical to understand that this dynamic and developing discipline poses several notable issues, gaps, and areas that require added research.

In the review presented in [ 23 ], an overview of VPP operations, including the integration of DERs, controlled loads, and EVs for resource aggregation and cooperative optimization as well as market and grid operations, is the goal. The evaluation did however not discuss regulatory and policy issues that might affect how widely VPPs are used and implemented in the power market.

Also, the difficulties, solutions, and prospects related to the conceptual review of the conversion of a microgrid to a VPP have also been covered by [ 24 ]. The overview examines RERs integration, opportunities for VPPs in the field of smart distribution systems, and effective management mechanisms. The management mechanism, however, did not discuss the optimization of the DERs for optimal operation. Authors in [ 25 ] gave a thorough overview of the VPP concept and its potential advantages in integrating DERs to assist grid security and stability. Resource optimization, as a main part of the VPP operation, is not covered in this study. Also, Ref. [ 11 ] provided an overview of VPP models and how they interacted with various energy markets. Finding the most profitable VPP scheme to be implemented in each regulatory environment is the focus. DER integration challenges, which affect the operation of VPPs in the energy markets, are not considered in this study. In [ 26 ], the idea of VPPs to participate in various energy markets is proposed. The model evaluates the VPP's technical and commercial prospects. Engaging in various energy markets revolves around sharing of data between the VPP and operators of the markets. The issue of data privacy and cybersecurity was not included in this study. Authors in [ 27 ] provided a review with a focus on integrating DERs into the electricity grid. The assessment gave a summary of the development and use of VPP for carbon reduction in the Chinese power system. The study, however, did not cover technologies that can improve the management and operation of VPPs, notably in addressing the intermittent and volatile nature of DERs. In the domain of energy management, authors of [ 28 ] provided a summary of resource scheduling in VPPs and addressed questions on scheduling procedures. However, despite concentrating on both technical and economic elements of scheduling in VPPs, this analysis did not address potential influences like the state of the energy markets that could have an impact on the scheduling issue. The case of a multi-energy coupled VPP has been presented in [ 29 ]. The purpose of this study was to address the advantages of multi-energy linked VPPs engaging in various energy markets. The issue of enhanced communication technology, data privacy and cybersecurity are some of the challenges which were not featured in this study.

The idea and structure of VPPs are concisely described in [ 30 ] with regard to its two main goals—energy management and power markets. Solutions are suggested to alleviate the problems with DER uncertainties that were highlighted. In order to create future sustainable power grids, authors of [ 3 ] have presented a comprehensive overview of the cutting-edge VPP technology. The study discusses recent technological advancements as well as the significant economic benefits of VPPs. However, this study did not cover the legislation that specifies how VPPs can access and participate in the energy markets. Below are some of the gaps found in existing literature:

Analysis of cybersecurity and data privacy as crucial elements in the VPP development.

Environmental and sustainability focus. The SDGs that VPPs could support, and how the support can be achieved.

Rigor analysis of legislation or regulations which will dictate the operation of the VPP.

Considering the above research gaps in literature, this review article advances the knowledge of energy systems by providing a thorough analysis of VPPs, their historical development, and their crucial roles as essential stakeholders in modern power systems. There will be focus on technical and market operations, real-world case studies, the identification of challenges and prospects, the emphasis on technical and market operations highlight the relevance and transformative potential of VPPs in creating sustainable and effective energy ecosystems. The contributions of this paper can be summarized as follows:

Comprehensive understanding of VPPs to provide readers with a concise definition, key traits, and core values of VPPs.

Tracing historical developments of VPPs from their theoretical roots to their current popularity.

Emphasis on VPPs as key stakeholders in modern power systems. This emphasis highlights the vital role that VPPs play in ensuring grid stability, fostering the integration of RES, and promoting sustainability.

Integration of technical and market aspects by providing a comprehensive analysis of VPP operation. This integration is crucial as it shows that VPPs actively participate in energy markets and actively optimize energy resources, which facilitates effective electricity trading and grid balancing.

Application of cybersecurity and data privacy techniques that protect the VPP from cyber threats, assuring grid stability, data integrity, and consumer trust in the ever-changing energy sector.

Real-world case studies of VPP deployments to offer insights and experiences.

Discussion of the regulatory frameworks that control how VPP operates.

Identification of challenges, providing recommendations, and prospects.

VPP advancements

The traditional centralized power generation model is being replaced by a decentralized, adaptable, and sustainable system thanks to VPP, which represents a revolutionary paradigm in the energy sector. Early theoretical ideas from the late twentieth century established the foundation for the development of VPPs and their eventual prominence in modern power systems [ 31 , 32 ]. This part of the paper will focus on the evolutionary journey of VPPs, highlighting the early concepts, key milestones, and technological advancements that shaped their development into critical enablers of modern energy ecosystems.

The embryonic stage (1990s–2000s)

Although the idea of VPPs was initially put forth in the 1997 [ 13 ] by Dr. Shimon Awerbuch, it did not really take off until the early 2000s. Early academic publications proposed the idea of coordinating and optimizing a portfolio of distributed energy resources to increase operational effectiveness and grid reliability. However, due to limited technological capabilities and a lack of enabling legal frameworks, the practical deployment of VPPs remained primarily theoretical at this point. Also, the absence of developed distributed generating technology, the high cost of communication and control systems, and the regulatory uncertainties surrounding VPPs were some of the causes of lack of practical deployment. References [ 33 , 34 , 35 , 36 , 37 , 38 ] provides a description of the early years concept of the VPP, its difficulties, including consumer resistance to participating, economic viability in infrastructure setup, investors' perceptions of risk, and grid operators' reluctance to adopt the unique strategy.

The breakthrough stage (2010s–2020)

The growth years presented milestones and key turning points in VPP deployment from the early years. At this point, the VPP has encountered rapid growth as a result of increasing interest in adoption of distributed generation technology, decreasing communication and control system costs, and expanding regulatory backing for VPPs. In a declaration on the future of the European electricity market that was issued in 2011, the European Commission emphasized the potential of VPPs to increase grid flexibility and integrate renewable energy. This communication aided in increasing policymakers’ and stakeholders’ understanding of VPPs [ 39 , 40 , 41 , 42 , 43 , 44 , 45 ]. Later, in March 2023, it was amended in Strasbourg, France, by recommending an expansion of the EU electricity market structure to further integrate RESs, improve customer protection and industrial competitiveness [ 46 ]. Notable milestones of the growth years include grid integration [ 47 ], market participation [ 48 ], technological advancement, and demand response programs[ 49 ], allowing aggregated DERs to respond to grid signals and enhance grid stability [ 50 ]. This marked the initial practical application of VPPs, showcasing their ability to support grid operations.

The future (2021 and beyond)

The demand for flexible grids and the incorporation of RESs is anticipated to drive further growth of VPP. VPPs are viewed as one of the techniques to lower carbon emissions and increase energy efficiency [ 51 ]. The key drivers for this growth are the increasing deployment of distributed generation technologies (DGT), falling cost of communication and control systems, growing regulatory support for VPPs, and also prosumers who want to receive incentives for their surplus generation [ 45 ].

In summary, it is evident that early theoretical insights were followed by practical and revolutionary applications in modern power systems as VPPs evolved. The development of VPPs into essential enablers of decentralized, flexible, and sustainable energy ecosystems has been shaped by significant turning points and milestones, as well as technological development and innovations. A thorough summary is provided in Table  1 for further reading.

VPP planning, roles, and sustainability

VPP planning is a crucial and multifaceted process that entails strategic design, coordination, and optimization to provide effective and dependable energy management. The main goal of VPP planning is to maximize the advantages for both grid operators and consumers while optimizing the potential of varied DERs and guaranteeing their seamless integration with the power grid. The planning approach necessitates a thorough comprehension of the energy landscape, individual DER capabilities, market dynamics, and regulatory frameworks.

To ensure that VPPs perform as planned and expected, their technological constraints must be recognized and measured [ 55 ]. Before interacting with external and internal elements, the VPP schedules and plans its operations. It is also a good performance criterion for the VPP to keep accurate data to engage the electricity market and reap favorable effects by analyzing the uncertainties resulting from elements like weather and producing forecasts with a high level of assertiveness [ 56 ]. The issue of forecasting will be discussed later in the section dedicated to the roles of VPPs. The VPP operations may be constrained by infrastructure, technological, and technical limits [ 57 ]. The model shown in [ 26 ] emphasizes the importance of effectively measuring and managing controllable loads in heating, ventilation, and air conditioning (HVAC) systems. Also, it emphasizes the significance of photovoltaic (PV) and BESS influences in determining the viability and adaptability of a VPP. VPPs can improve their coordination with all stakeholders by developing a methodical technique for evaluating and controlling power availability at time intervals. Surely, this enhances the performance of the VPP and enables a more seamless interaction with the power grid.

VPP planning also includes economic and legal factors in addition to the technical ones. The aspects of technical and economic frameworks of the VPP will be delved deeper in the sections dedicated to the technical and economic aspects of VPPs. It is important to note that good operational planning directly affects good economic outcomes [ 55 ]. The economic viability of the VPP and its prospective revenue streams, including energy trading [ 58 ], demand response participation [ 59 ], and the supply of ancillary services [ 21 ], are assessed using financial models and cost–benefit analysis [ 60 ]. Collaboration with grid operators, legislators, and other stakeholders is also necessary for successful VPP planning to overcome regulatory obstacles and build an environment that facilitates VPP integration. To ensure effective planning, the VPP should be continuously monitored and improved to respond to shifting grid conditions and market dynamics [ 61 ]:

VPP planning opens the way for a more resilient, and sustainable energy future by integrating technological, economic, and regulatory factors. It has enormous potential to optimize resource use, improve grid stability, and contribute to the global quest for a reduction in carbon emissions produced by energy systems. It is therefore imperative that stakeholders comprehend the complexities of VPP planning to influence the energy industry’s future and advance the cause for greener and a more sustainable and effective energy future. This planning phase can be summarized as: aggregating existing and new energy resources.

Ownership structure: The internal ownership structure of VPPs can vary depending on the specific implementation and stakeholders involved. It may involve collaboration between multiple stakeholders including energy producers, consumers, and aggregators.

Regulating and market considerations governing energy markets and grid operations.

Implementation of an energy management system to provide functionalities such as real-time monitoring, forecasting, dispatching, and scheduling energy resources to meet grid requirements and maximize economic benefits.

Agreement formulation such as power purchase agreements.

Profit sharing mechanisms taking into consideration factors such as investment contributions, operational cost, risk allocation, etc.

Compensation structures for various stakeholders involved in the VPP including incentives for demand response participations from consumers.

The way electricity is produced, controlled, and used has been revolutionized by VPPs as explained in the previous sections. VPPs are flexible and dynamic entities that perform a variety of roles in modern power systems. Because of the variety and importance of their tasks, they are key players in creating an energy ecosystem that is sustainable, effective, and resilient. The following are the main responsibilities of VPPs in power systems.

Aggregation of DERs: Various DERs, such as solar panels, wind turbines, ESS, EVs, and demand response loads are gathered by VPPs. VPPs construct an adaptable and manageable portfolio of assets by combining these decentralized resources into a single virtual entity. Through this aggregation, grid management is improved, enabling the VPP to maximize DER usage in response to grid signals. The DERs’ activity within the VPP is managed and coordinated by the VPP operators. The main responsibility is resource optimization and involvement in energy markets.

The authors of [ 62 ] described the aggregator concept as a central control node that collects information from both the power grid and controlled loads. A load aggregator can also serve as a conduit between the controllable loads and the grid operator, allowing the regulated management to consider user and grid benefits simultaneously. When interfacing with the power market, aggregators are employed in power charging models for EVs to help optimize the batteries’ charging as well as the modeling of driving patterns and price estimates [ 63 ]. As DERs are dispatched depending on compensation rates and power levels, an aggregator can stand in for them to maximize profits [ 64 ]. Furthermore, in [ 65 ], for a power market with bilateral contracts, the aggregator has the facility to select between various power plants based on power-cost-based offers.

Grid stabilization and reliability: VPPs make a major contribution to the reliability and stability of the grid. VPPs maintain a stable and steady supply of electricity while minimizing the possibility of blackouts and voltage variations by balancing energy generation and consumption from various DERs [ 66 ]. They are able to provide ancillary services like frequency regulation and voltage management, which are essential for preserving grid stability [ 67 ]. The general stability and dependability of the electrical system are the responsibility of grid operators. In accordance with grid norms and standards, the grid operators work with VPP operators to incorporate DERs.

Renewable energy integration: In 2016, in Paris, an emission reduction plan was enacted which has made the use of DERs very essential [ 68 , 69 , 70 ]. This integration is the VPP operator’s responsibility. This is accomplished by coordinating the operation of diverse RERs, such as solar panels, wind turbines, and such that they work as a unified system. However, due to their erratic nature, integrating RESs into the power systems presents its own challenges [ 71 , 72 ]. These challenges come about because of generation fluctuations due to weather conditions and time of the day. The variability adds complexity to power system operations. For instance, rapid changes in wind speed or cloud cover can result in fluctuations in generation, requiring grid operators to make quick adjustments to maintain system stability. VPPs take on this problem by combining several RESs and using intelligent management processes, they make it easier for the integration of the RESs effectively. They ensure the integration of these RESs to provide a steady supply of electricity while lowering reliance on conventional fossil fuel-based power plants.

Authors in [ 72 ] proposed a solution for integration of RESs into the grid to maintain power quality. This is important because RESs are becoming increasingly popular due to their environmental benefits, but they can also introduce power quality issues. This is a challenge that a VPP is sought to address. Large scale penetration of RESs means a hike in capital and operational cost. Authors in [ 73 ] discussed a mechanism that could aid in lowering the high cost of RESs integration and bringing electricity prices into affordable band. Spreading the benefits of renewable integration into the spheres of agriculture, where in [ 74 ], authors have created a mechanism to encourage energy-efficient agriculture by minimizing dependency on fossil fuels for water-table pumping. Through the aggregation and optimization of DERs, VPPs enable farmers to reduce their dependency on fossil fuels while enhancing energy efficiency and resilience in agricultural practices. This synergy not only fosters economic sustainability for farmers, but also contributes to the broader goal of renewable energy integration, paving the way for a greener energy future.

Successful integration depends on several important aspects. Forecasting methods that accurately estimate the patterns of RESs generation must be put in place [ 75 , 76 ]. This allows better grid management and optimization of the DERs. The VPP employs such tools to better manage the generation of DERs. A summary of various forecasting techniques provided in the literature is listed in Table  2 . Analysis of forecasting models to aid in the integration of RESs in the context of VPPs has been provided in [ 77 ].

Moreover, for optimal integration of RESs, the power grid must be modernized with smart technologies. Real-time monitoring, control, and communication between DERs and grid infrastructure are made possible using smart approaches like the VPP [ 16 , 78 , 79 ]. This improves the reliability and effectiveness of the grid. Additionally, VPPs provide beneficial grid functions, such as frequency regulation [ 67 ] and voltage control [ 80 ] in addition to balancing energy supply and demand [ 81 ]. These services boost the grid’s dependability and resilience even more, promoting a stronger energy infrastructure that can handle the rising proportion of RESs.

The VPP approach to integrating RESs into the power grid is a cutting-edge strategy that is revolutionizing the way energy is produced, distributed, and consumed. VPPs offer an effective response to the problems caused by intermittent renewables by utilizing the combined potential of DERs and modern technology. VPPs will unquestionably be essential in advancing the transition to a cleaner, more dependable, and efficient energy system as the world progresses toward a sustainable energy future.

DER technologies applied in VPPs

In VPPs, various DERs are used, including solar panels, wind turbines, ESS, EVs, and demand response loads. These DERs are aggregated and optimized within the VPPs, allowing for efficient management and coordination [ 55 ]. By harnessing the collective capacity of diverse DERs, VPPs enhance grid stability, enable renewable energy integration, and support demand response strategies, contributing to a more sustainable and flexible energy ecosystem. A VPP should ensure that DER integration keeps the system operating properly by ensuring the stakeholders’ continual consumption requirements [ 92 ]. Various DER technologies applied in VPPs in the reviewed literature are summarized in Table  3 .

Out of the 15 References evaluated regarding DER technologies used in VPPs, it is evident from Table  3 that wind turbines and solar panels hold the largest share, as shown in Fig.  3 . It proves how easily the technology of wind turbines and solar panels have been embraced. However, more renewables should be added to the energy mix to hasten the shift to a less carbon-oriented energy landscape.

DER application in literature

VPP sustainability focus

One of the viable ways to address numerous Sustainable Development Goals (SDGs) of the United Nations (UN) and contribute to a more sustainable energy future is through VPPs. By encouraging the integration of RESs and boosting energy efficiency, VPPs, as a fundamental enabler of the energy transition, contribute significantly to achieving SDG 7 (Affordable and Clean Energy). VPPs promote the integration of sustainable energy into the power grid by aggregating and optimizing DERs thereby lowering greenhouse gas emissions and addressing climate change (SDG 13—Climate Action).

Additionally, through promoting technological advancements and innovation in the energy industry, VPPs provide a substantial contribution to SDG 9 (Industry, Innovation, and Infrastructure). VPPs promote grid modernization and improve overall energy infrastructure by integrating smart grid technologies, advanced analytics, and artificial intelligence. These developments result in more effective and adaptable energy systems, advancing the objectives of SDG 9 to develop robust infrastructure and encourage sustainable industrialization.

However, while VPPs offer considerable potential for achieving various SDGs, several challenges must be addressed to ensure their long-term sustainability. Access to VPP technologies must be equally available, as this can influence SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities). For VPPs to be deployed in a way that supports SDG goals for eradicating poverty and minimizing inequality, marginalized people and neglected areas must be able to benefit from them. In simple terms, it is essential to make sure that everyone has an equal opportunity to profit from VPPs to realize SDG 1 and SDG 10. This calls for figuring out ways to make technology more accessible and inexpensive for everyone, especially those living in rural or underdeveloped areas. By doing this, VPPs may contribute to the development of a more just and sustainable energy future in which everyone, regardless of financial situation, has access to safe and dependable energy.

Furthermore, the environmental impact of VPPs [ 108 ] and their associated technologies require careful consideration to achieve SDG 12 (Responsible Consumption and Production). Lithium-ion batteries, which are used in ESS, are one example of a crucial mineral and material whose demand is on the rise, prompting questions regarding responsible sourcing, recycling, and end-of-life management. It is not a surprise that there has been extensive literature on ways to increase the lifespan of lithium-ion batteries [ 109 ]. Authors in [ 110 ] proposed a precise lifespan model for the battery cells used in VPP applications. To reduce the negative environmental and social effects of VPP deployment, sustainable methods must be implemented in material sourcing and VPP operation.

Moreover, numerous steps can be taken to guarantee the sustainability of a VPP itself. Stakeholders must work together to build supporting regulatory frameworks and financial incentives for VPP development. VPPs will become more widely available and long-lasting if investments are encouraged in their research, development, and implementation. This will also encourage technological breakthroughs and cost reductions. Also, a successful integration of VPPs into the energy economy depends on raising consumer awareness and engagement. The acceptance of VPP technology can be increased by educating consumers about the advantages of VPP participation, such as lower energy costs and increased grid reliability [ 111 , 112 ].

To sum up, VPPs have a significant potential to help achieve several SDGs pertaining to renewable energy, tackling climate change, and sustainable infrastructure. They support SDGs 7 and 9 by fostering the integration of RESs and improving energy efficiency. To achieve more general sustainability goals, it is necessary to address issues with fair access to VPP advantages and responsible use and production. VPPs are critical enablers of a greener, more inclusive, and resilient energy future and can help accomplish specific SDGs by establishing supportive policies, encouraging innovation and consumer engagement. Using VPP's revolutionary potential in promoting the UN’s sustainability agenda [ 113 ] requires advocating for and making contributions to their sustainable deployment and optimization.

Cybersecurity and data privacy

The protection of the grid’s stability and dependability is one of the main justifications for prioritizing cybersecurity in VPP application. As crucial nodes in the grid, VPPs coordinate the functioning of DERs and provide a constant and reliable supply of electricity. A cyber-attack on a VPP has the potential to impair energy production, distribution, and grid management, resulting in power outages [ 114 ] and large financial losses.

The efficient operation of VPPs depends on data integrity [ 115 ]. For making decisions about the generation, distribution, and use of energy, VPPs depend on accurate data. Cybersecurity measures guard against data alteration or manipulation, ensuring that VPP operators have reliable data for maximizing energy resources and delivering crucial grid services. In order to increase consumer and prosumer confidence in VPP services, data privacy procedures on data collection and usage are essential [ 116 ].

VPPs are desirable targets for cybercriminals because of their crucial functions in grid management and their strength in the marketplace. VPPs are shielded by cybersecurity from a variety of dangers, such as malware and hacker attempts [ 117 ]. To address the cybersecurity issues, various approaches have been suggested and has been categorized by [ 118 ] as human and non-human approaches. Human approaches like updates and incremental patches installation aids in robust security posture, addressing vulnerabilities in software, but also require reboots causing downtime to regular operations. Engaging in customer interactions also creates awareness to recognize and respond to potential threats. However, allocating time and resources may be challenging for organizations with limited budgets and manpower.

Non-human approaches like the adoption of blockchain technology reduce the risk of single point failure as the technology operates on a decentralized network. This enhances resilience, making it more challenging for attackers to compromise the entire system. Another non-human approach is cloud computing which typically encrypts data during transmission and storage. This safeguards sensitive information from interception or unauthorized access.

Data privacy and cybersecurity are essential elements of VPP operations. They protect against cyberthreats, guarantee data integrity, enhance grid stability [ 119 ], promote consumer trust, enable regulatory compliance, and support the viability of VPPs financially. To ensure a secure, dependable, and sustainable energy future, cybersecurity and data privacy must be prioritized as VPPs continue to develop and broaden their role in contemporary energy systems [ 120 ].

Regulation and compliance

The operation of VPPs is greatly influenced by legislative or regulatory activities. This section will cover the regulatory structure that governs VPPs, emphasizing significant importance and their effects on the energy industry.

In the domain of grid integration standard and requirements, regulating bodies establish grid codes and integration standards that the VPP must adhere to when connecting to the electrical grid. The safe and dependable grid integration of DERs is ensured by these standards. The basis for secure VPP functioning is grid codes and standards. A manual for connecting DERs to the utility grid is provided by the IEC 62786. DER planning, operation, protection, and connectivity to distribution networks are the key applications. A global agreement on the use of DER in electrical power systems is being sought through the IEEE 1547 set of standards. This standard has received widespread acceptance on a global scale in outlining the requirements for the design, implementation, testing, and security of all sorts of DERs. Due to the increased penetration of DERs and the need to maintain system stability, the IEEE 1547 has recently been updated to IEEE 1547-2018 and IEEE 1547.1-2020 [ 121 ]. A crucial series of standards released to control the grid’s interconnection and operability is the IEEE 2030. It is modified to implement cutting-edge communication and information technologies that provide interoperability solutions for the promotion of DER connectivity.

The European Committee for Electrotechnical Standardization (CENLEC), which is made up of 34 European Nations, oversees standardization efforts to increase commercial viability and foster technological growth. The CENLEC released the EN 50549-1 and EN 50549-2 DER integration standards with the goal of addressing all DER capabilities that are necessary for operation in tandem with distribution networks [ 121 ].

Also, there may be regional variations in regulations governing the integration of DERs with the grid [ 121 ]. For example, Canadian standards C22.3 No. 9 and C22.2 No. 257 offer technical advice for DER integration with the grid at medium and low voltage under 50 kV and low voltage systems under 0.6 kV, respectively. The British standard BS EN50438:2007 also offers technical advice for DER interconnection. The VDE-AR-N 4105 standard in Germany also offers technical recommendations for connecting DERs and low voltage systems. The JEAG.9701-2001 standard in Japan offers technical recommendations for distributed generating grid-connection. The standard permits DER owners to sell surplus energy to utility grids and mandates that power grids supply DER owners with backup power.

Various environmental and sustainability regulations may pertain to different jurisdictions [ 122 ], and they may provide incentives or requirements for VPPs to assist the integration of RERs and the reduction of emissions. In certain regions, these rules may have an impact on how VPPs function. The level of support for VPPs that use RERs may vary depending on the targets and incentives that jurisdictions set for renewable energy [ 123 ].

VPP operators and stakeholders must negotiate a complicated regulatory environment that is unique to their locations. It is essential for the implementation and operation of VPPs to comprehend and follow local legislations. Furthermore, as VPPs become more crucial to the world’s energy landscape, regulators and industry participants must cooperate to unify rules and encourage uniformity in grid integration techniques across various jurisdictions.

Technical aspects of VPPs

The technical operations of a VPP involve a series of complex and coordinated processes to efficiently manage and optimize the aggregated DERs within the VPP. According to Ref. [ 124 ], the technical features of VPPs provide dynamic interaction for the integration of power distribution based on auxiliary services. These technical operations can vary depending on the specific architecture and goals of the respective VPP. This section of the paper delves into the technical intricacies of VPPs and explores their roles as key enablers in the transition toward a sustainable and resilient energy future. Some of these technical aspects of the VPPs are emphasized below:

Resource optimization and scheduling: In a VPP, resource optimization and scheduling of various DERS are essential to achieve efficient and reliable energy management [ 28 , 125 ]. It is also important to note that advanced algorithms and real-time data analytics [ 76 ] as summarized earlier in Table  2 are employed to forecast energy generation and demand profiles, ensuring dynamic resource optimization. The VPP intelligently dispatches DERs based on grid conditions and market signals, balancing supply and demand to enhance grid stability and maximize revenue generation [ 126 ]. By coordinating diverse DERs, VPPs optimize energy use, contribute to renewable integration, and support grid flexibility, making them crucial enablers in the transition to a sustainable resilient energy ecosystem.

A summary of the relevant literature in accordance with resource optimization and scheduling is provided in Table 4 .

Load balancing and grid support/ancillary service: The load balancing and grid support functions of a VPP are very crucial [ 135 ]. The VPP dynamically modifies energy generation and consumption to fit grid demands by aggregating and optimizing various DERs. While storing excess energy during times of low demand, the VPP can supply additional power from DERs during times of peak demand to balance out high demand. This load-balancing ability makes VPPs essential for guaranteeing a dependable and resilient electricity supply since it improves grid stability, lowers grid stress, and adds to overall grid support.

In addition to its role of aggregating and optimizing DERs, a VPP offers a range of essential ancillary services. These services include frequency regulation. This is achieved by maintaining grid frequency within acceptable bounds through rapid power adjustment [ 136 , 137 , 138 , 139 ]. VPPs also provide voltage support by injecting or absorbing reactive power to stabilize voltage levels [ 80 , 140 , 141 ].

Moreover, VPPs contribute to peak regulation, managing demand during high load periods to alleviate grid stress [ 142 , 143 , 144 ]. The comprehensive suite of ancillary services offered by VPPs ensures grid stability, enhances reliability, and facilitates the integration of RESs, making them vital assets in modern power systems.

Demand response and load management: A VPP inherent components of demand response and load control enable effective energy usage. By actively communicating with connected consumers to alter electricity consumption in response to grid circumstances and price signals, VPPs participate in demand response. In order to avoid peak demand times and lessen grid load, VPPs optimize the scheduling of operations and equipment that consume a lot of electricity [ 59 , 81 , 96 ]. This demand-side flexibility not only supports grid stability, but also empowers consumers to actively participate in energy conservation, contributing to a sustainable energy ecosystem [ 66 , 145 ]. The VPP’s ability to efficiently balance energy supply and demand through demand response and load management strategies makes it a pivotal stakeholder in modern power systems.

The technical aspects of VPPs represent a dynamic and transformative force in the energy sector. VPPs provide effective renewable energy integration, grid stability, and demand response capabilities by aggregating and optimizing various DERs.

Market/economical aspect of VPP

VPPs provide an appealing scenario for the future of energy systems in terms of their commercial and financial prepositions. VPPs can completely alter the economics of electricity generation and consumption as they are dynamic aggregators of various DERs. VPPs maximize the use of DERs, optimize income generation, and improve participation in the energy market [ 11 ]. The VPP does this via real-time data analytics, complex forecasting algorithms, and clever energy trading methods. As a result of their capacity to offer a versatile and dispatchable portfolio of assets (DERs), VPPs are better equipped to meet swiftly to dynamic market conditions, such as energy pricing and demand patterns. VPPs deliver a strong economic case for sustainability, affordability, and resilience in the energy ecosystem by making it possible to efficiently deploy renewable sources of energy, support demand response programs, and provide ancillary services to the grid. VPPs technology’s commercial implications hold significant promise for developing a more effective, competitive, and customer-focused energy landscape as it continues to advance.

Currently, the majority of jurisdictions have already started deregulation or liberalization and competition-opening process in their individual power markets [ 11 ]. In order to finance new infrastructure investments, increase the economic efficiency of power company operations, and particularly lower the ultimate prices of electricity delivery, deregulation or privatization has been advocated [ 146 ]. A vertical structure as stipulated by [ 146 ], where all activities were merged, was replaced with an organization where generation, transmission, distribution, and commerce work separately as a result of this reform in the energy sector.

Additionally, the large integration of renewables into the power grid that characterizes the contemporary energy landscape suggests a greater need for the system’s balancing mechanism due to the random nature of the RESs generation schedule. One significant benefit of VPPs is that they boost their shared profit by selling energy on behalf of the DER owners to improve the balancing mechanism when they access the wholesale electricity markets. The participation of VPPs in various electricity markets is covered in this section.

Day-ahead market: Day-ahead market refers to the buying and selling of electricity on the day before the actual production and delivery. VPPs actively participate in the day-ahead market by supplying their aggregated portfolio of DERs for electricity trading. VPPs forecast energy generation trends for the next day using advanced forecasting and data analytics. Based on these insights and market prices, VPPs strategically bid these aggregated resources to optimize revenue generation [ 84 , 147 , 148 , 149 , 150 , 151 ].

Ancillary service market: VPPs actively participate in the ancillary services market by providing critical assistance to the electric grid. The VPP does this by dynamically altering the output of their aggregated DERs. VPPs respond in real-time to grid signals to maintain stability, assure a continuous power supply, and improve grid reliability. With this, VPPs play an important role in supporting grid operations and optimizing grid performance. Several studies have incorporated the ability to engage in ancillary services markets into VPP modeling in order to enable regulation that ensures the security of electricity supply [ 26 , 143 , 150 , 152 , 153 , 154 , 155 , 156 ].

Reserve market: In the reserve market, VPPs actively participate by offering their combined output of DER as a reserve capacity to support the grid’s reliability. VPPs reserve a portion of their generated power from the DERs, ready to be dispatched within short notice to address sudden changes in electricity demand and supply or even an outage of grid operator’s outage of generators. By participating in the reserve market, VPPs offer a valuable and flexible solution for grid operators to maintain grid reliability. As VPP technology advances, their involvement in the reserve market will become ever more vital in contributing to the efficient and secure operation of the electric grid. Various strategies to make ideal or optimal reserve market decisions have been studied in several papers. According to the findings of these studies, the reserve market is more significant at times of peak demand since a contingency can have a higher impact [ 26 , 127 , 157 , 158 , 159 , 160 ].

Intra-day/real-time market: The VPP actively participates in the intra-day market by precisely adjusting the energy traded in the day-ahead market. The VPP strategically optimizes its DER dispatch and offers flexible resources in response to dynamic market prices and grid needs [ 11 ].

Although intraday markets enable VPPs to adjust scheduled energy after the day-ahead market, an exchange power imbalance may still emerge as the dispatch time approaches. VPPs can thus participate in real-time balancing markets to avoid penalties. The goal of the real-time market is to reduce the imbalance errors and their associated cost. The various electricity markets in which the VPP participates are provided in Table 5 to outline the key characteristics. Figure 4 also gives a graphical analysis of the key characteristics of the electricity market that the VPP operates in.

Electricity markets characteristics

Real-world implementation of VPPs

VPPs in the real world provide fascinating insights on their revolutionary impact on contemporary power systems. VPP implementations around the world demonstrate their adaptability in maximizing DERs. These examples elaborate on the value of VPPs in grid stability, renewable generation, and demand response. VPP projects are becoming more common, proving their potential to revolutionize energy systems. The VPP market is expected to grow from $1.3billion in 2019 to $5.9billion in 2027, with a compound annual growth rate of 21.3% from 2020 to 2027 [ 25 ]. In Norway, Statkraf is the world’s largest VPP with a capacity of 10GW from over 1000 aggregated assets. Recently, Tesla announced to scale up the south Australia VPP which connects assets from 4000 to 50,000 homes, which will make it the world’s largest VPP [ 172 ]. Storing and distributing power from residential and commercial customers, Tesla’s Powerpacks and Powerwall promote grid dependability and the integration of renewable energy. These real-world examples demonstrate how important VPPs are in creating a global energy ecosystem that is robust, efficient, and sustainable. Selected real-world applications [ 124 , 172 ] are summarized in Table  6 .

Applications of VPPs in the real world have offered an important lesson that will guide their development, deployment, and scalability. Key insights from these applications include the following but not limited to:

Flexibility and scalability: The significance of developing flexible and scalable systems has been shown by the successful VPP deployments. VPPs support a variety of DERs and adjust to shifting market dynamics and grid conditions.

Integration of DERs: For the VPP to operate at its best, several DERs must be integrated into a single, coordinated system. Advanced data analytics and control algorithms are essential for managing DERs efficiently and maximizing their contributions, as demonstrated by real-world applications.

Interoperability and interconnection: VPPs generally operate in sophisticated energy ecosystems with a variety of stakeholders. Smooth VPP integration and operation require interoperability and seamless interconnection with grid operators, and other market participants.

Market participation: The significance of active market participation has been emphasized by real-world VPP applications. Using effective energy trading techniques and intelligent bidding in electricity markets. VPPs can maximize income production and assist the integration of RESs at a fair price.

The ongoing development and deployment of VPPs can be improved by taking lessons from these practical applications, ensuring that they continue to contribute to a sustainable, effective, and decentralized energy future.

However, despite the successes chalked up by these projects, there are still challenges that must be addressed. Cybersecurity threats, consumer engagement, data management and analytics, achieving a positive return on investment and profitability are some of the model challenges that these projects face. Collaboration between stakeholders is necessary to overcome these obstacles.

Conclusions

VPPs have become transformative solutions revolutionizing the modern energy landscape. Applications in the real world have sounded their importance and have also demonstrated the adaptability and advantages of VPPs. VPPs have shown that they can promote the integration of renewable energy sources, aggregate and optimize a variety of DERs, and facilitate effective demand response.

Flexibility and scalability, which enable seamless adaptability to shifting grid conditions and market dynamics, have been shown to be essential for successful VPP adoption. VPPs have been able to improve cost-effective renewable energy integration and optimize revenue generation through active market participation and smart bidding tactics. Additionally, for VPPs including residential or commercial participants, consumer engagement and education are crucial for assuring buy-in and demand response programs.

Embracing the lessons learnt in the referenced literature, a VPP stands as a pivotal enabler in our journey towards a sustainable, decentralized, and resilient energy future. There can be an effective and customer-focused energy ecosystem that leads the path for a greener and more sustainable society by fully utilizing VPPs and maximizing their important contributions.

The ability of VPPs to maximize DERs, boost renewable energy integration, and improve grid stability makes them a crucial element in reaching a sustainable energy future. A VPP has the undisputed potential to change the energy landscape. The successful operation of VPPs in the modern era depends on a judicious blend of cutting-edge technology, supportive regulatory frameworks, and seamless connectivity with the existing electricity infrastructure. The aggregation and control of various DERs can be optimized by using real-time data analytics, artificial intelligence, and smart grid technologies. However, VPPs must overcome several obstacles, such as data security, grid interconnection, and scalability to realize their full potential. In a dynamic energy environment, taking care of these issues is essential to ensure the proper operation of VPPs.

Also, the development of flexible regulatory frameworks that support VPP implementation and market involvement is essential for the efficient operation of VPPs. The seamless integration of VPPs into current energy markets and the promotion of novel business models are made possible by clear regulations on market access, price structures, and grid services. Overall, an effective operation of VPPs in this era and beyond will depend on the following:

Advanced technological integration such as data analytics, smart grid technologies which are vital real-time data processing, accurate forecasting, and efficient optimization.

Regulatory support to encourage supportive and accommodative regulatory frameworks that will promote VPP deployment, and market participation.

Implementation of robust data security measures to protect sensitive information, guarantee consumer privacy, and safeguard against potential cyberattacks.

Implementing these recommendations will help shape and harness the potential of VPPs to transform the energy industry. With correct planning, VPPs will significantly contribute to the modern era’s goals of energy resource optimization, grid stability enhancement, and improved integration of RESs.

Availability of data and materials

Data sharing is not applicable to this article as no datasets were generated or analyzed during this work.

Abbreviations

Artificial Neural Network

Biogas/biomass power

Battery energy storage system

Combined heat and power

Convolutional Neural Network

Controlled load

• Distributed energy resources

Distributed generation

Distribution system operator

Energy storage system

European Union

Electric vehicles

Gas turbine

Heat pump power

Heating, ventilation, and air conditioning

Internet of Things

Long short-term memory

Mixed Integer Linear Programming

Model predictive control

Nuclear power

Pumped hydro storage

Programmable logic control

Power System Network

Particle Swarm Optimization

Photovoltaic

Renewable energy resources

• Renewable energy sources

Sustainable Development Goals

Thermal power

Transmission system operator

United Nations

Virtual power plant

Wind turbine

Zhao J, Patwary AK, Qayyum A et al (2022) The determinants of renewable energy sources for the fueling of green and sustainable economy. Energy 238:122029. https://doi.org/10.1016/j.energy.2021.122029

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Authors express their sincere gratitude to Professor Farrag of School of Computing, Engineering and the Built Environment at Glasgow Caledonian University for proofreading and providing valuable insights in enhancing the accuracy, clarity, and readability of this manuscript.

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Abdelkader, S., Amissah, J. & Abdel-Rahim, O. Virtual power plants: an in-depth analysis of their advancements and importance as crucial players in modern power systems. Energ Sustain Soc 14 , 52 (2024). https://doi.org/10.1186/s13705-024-00483-y

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An IoT Enabled Energy Management System with Precise Forecasting and Load Optimization for PV Power Generation

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• Published: 27 August 2024

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• Challa Krishna Rao   ORCID: orcid.org/0000-0003-3848-0778 1 , 2 ,
• Sarat Kumar Sahoo 1 &
• Franco Fernando Yanine 3  

The challenge of demand-side energy management involves effectively leveraging renewable energy sources while mitigating power consumption constraints. The Intelligent Smart Energy Management System (ISEMS) aims to address this by accurately estimating energy availability and planning ahead for optimal usage. ISEMS utilizes Support Vector Machine (SVM) regression model with Particle Swarm Optimization (PSO) to forecast energy with high precision. Evaluation against other models demonstrates superior accuracy. Experimental setup of ISEMS is presented, showcasing its performance across different configurations, prioritizing user comfort. Additionally, integration of Internet of Things (IoT) enables user-end monitoring.

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Rao, C.K., Sahoo, S.K. & Yanine, F.F. An IoT Enabled Energy Management System with Precise Forecasting and Load Optimization for PV Power Generation. Trans Indian Natl. Acad. Eng. (2024). https://doi.org/10.1007/s41403-024-00498-z

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Renewables accounted for 14.6% of global energy consumption in 2023.

In June, the Energy Institute released the 2024 Statistical Review of World Energy . The Review provides a comprehensive picture of supply and demand for major energy sources on a country-level basis. Each year, I write a series of articles covering the Review’s findings.

In previous articles, I discussed:

Overall highlights

Trends in global carbon dioxide emissions

Global production and consumption of petroleum

Global production and consumption of natural gas

Global production and consumption of coal

Trends in nuclear power

Today I will discuss renewable energy, with a focus on the growth of wind and solar power.

In 2023, renewable energy sources surged to new heights. Renewables’ share of total primary energy consumption reached 14.6%, 0.4% above the previous year.

Solar and wind power drove global renewable electricity generation to a record-breaking 4,748 TWh, marking a 13% increase from the previous year. This growth accounted for 74% of all net additional electricity generated worldwide.

Solar power led the charge, with 346 GW of new capacity, smashing the 2022 record by 67%. China contributed a quarter of this growth. Europe, too, made significant strides, adding over 56 GW of solar capacity, making up 16% of the global total capacity increase.

Global Renewable Consumption (excluding hydropower). Robert Rapier

Wind power also soared to new heights, with over 115 GW of new capacity installed—another record. China again was at the forefront, responsible for nearly 66% of these additions. China’s total installed wind capacity now rivals that of North America and Europe combined. Offshore wind, a growing frontier in renewable energy, saw Europe holding the highest share at 12%, but China wasn’t far behind, boasting 37 GW compared to Europe’s 32 GW.

Meanwhile, the share of biofuels increased in the global energy mix. Production grew by over 17% from 2022, with the United States and Brazil leading the way. In 2024, bio-gasoline (predominantly ethanol) and biodiesel production reached a near-even split, with the U.S., Brazil, and Europe consuming the lion’s share of these renewable fuels.

The Top Producers

China dominates the world’s renewable energy production. Notably, both China and India — which have seen dramatic fossil fuel consumption growth in recent years — have increased renewable consumption at double-digit rates over the past decade.

Top 10 Renewable Energy Producers in 2023. Robert Rapier

There are a couple of caveats to note about this table. First, it excludes hydropower. The reason is even though hydropower generation contributes around as much as wind and solar, hydropower growth has been relatively stable for years. This table basically shows the growth trajectory of modern renewables like wind and solar power.

Second, the numbers are reported as “Input-equivalent energy”, which is the amount of fuel that would be required by thermal power. This accounts for the lower efficiencies of converting coal, for example, into electricity. In other words, for a given amount of solar power, the table is calculating how much coal or natural gas would be required to produce that much power.

Conclusions

Renewable energy, particularly wind and solar, continue to grow at rapid rates. With record-breaking growth in capacity and generation, these modern renewables continue to supplement traditional energy sources.

China continues to dominate the renewable sector, driving much of the global expansion, while the U.S., Europe, and Brazil also make significant contributions, particularly in biofuels.

As the world strives to reduce carbon emissions and transition to cleaner energy, renewables will play a critical role in shaping a sustainable and resilient energy future. However, to date overall energy demand continues to outpace the growth in renewables, which has meant that fossil fuel consumption has also continued to grow.

By Robert Rapier

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Renewable energy technology selection for hotel buildings: a systematic approach based on ahp and vikor methods.

1. Introduction

2. materials and methods, 2.1. literature review, 2.1.1. renewable energy technologies for hotel buildings, 2.1.2. criteria related to renewable energy technologies, 2.2. expert group interviews, 2.3. renewable energy technology selection: ahp and vikor methods, 2.3.2. vikor, 3. results and discussion, 3.1. analysis of technologies based on criteria, 3.1.1. initial investment cost, 3.1.2. operating and maintenance/repair cost, 3.1.3. payback period, 3.1.4. energy production capacity, 3.1.5. maintenance ease and simple management, 3.1.6. reliability, 3.1.7. noise level [ 25 ], 3.1.8. natural resource utilization, 3.1.9. carbon footprint, 3.2. renewable energy technologies, 3.2.1. photovoltaic panels, 3.2.2. solar thermal panels, 3.2.3. solar-powered absorption chiller, 3.2.4. heat pumps, 3.2.5. micro-hydropower, 3.2.6. small-scale wind turbines, 3.2.7. biomass boilers, 3.2.8. integrated systems (photovoltaic panels + heat pumps), 4. conclusions, author contributions, institutional review board statement, data availability statement, acknowledgments, conflicts of interest.

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Arıkan Kargı, V.S.; Cesur, F. Renewable Energy Technology Selection for Hotel Buildings: A Systematic Approach Based on AHP and VIKOR Methods. Buildings 2024 , 14 , 2662. https://doi.org/10.3390/buildings14092662

Arıkan Kargı VS, Cesur F. Renewable Energy Technology Selection for Hotel Buildings: A Systematic Approach Based on AHP and VIKOR Methods. Buildings . 2024; 14(9):2662. https://doi.org/10.3390/buildings14092662

Arıkan Kargı, Vesile Sinem, and Fatma Cesur. 2024. "Renewable Energy Technology Selection for Hotel Buildings: A Systematic Approach Based on AHP and VIKOR Methods" Buildings 14, no. 9: 2662. https://doi.org/10.3390/buildings14092662

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