Virtual power plants explained for Canadian homes

How does a virtual power plant work?

A traditional plant is one large machine in one place. A VPP is many small devices in many places, joined by a control platform that can talk to each of them. The operator, often a utility or an aggregator, forecasts demand and prices, then sends signals: discharge the batteries, delay the water heaters, trim the thermostats by a degree or two.

No single device matters much, but thousands acting together can change the shape of the load. From the grid operator's side, the group is dispatched like a generator. From the homeowner's side, the devices keep doing their jobs, within limits the owner has agreed to, and may earn a credit or payment for taking part.

What devices can join a VPP?

• Home batteries. They store energy and can feed it out when requested. See solar battery storage in Canada.
• Solar systems with inverters. Modern inverters can adjust output on command, as outlined in solar inverter types.
• Smart thermostats. Small, short setbacks at peak times shift load with little effect on comfort. The basics are in smart thermostat savings.
• Water heaters. A tank is a thermal battery, and heat pump water heaters can heat when power is cheap or plentiful.
• Electric vehicle chargers. Charging can be delayed or slowed to avoid peaks.

Why do utilities want them?

Electricity demand peaks for a few hours on the coldest evenings and hottest afternoons. Building capacity for those hours is expensive and it sits idle much of the year. Shifting even a modest share of load away from the peak can defer new lines and plants, which is the core appeal.

VPPs also help absorb variable wind and solar output by soaking up surplus and releasing it later. Thermal stores are a natural fit, because heat is much cheaper to store than electricity. A tank of water, covered in thermal storage tanks, can hold hours of heating demand and let the grid choose the moment to charge it.

What should a homeowner check before joining?

Programs in Canada vary a lot by province and utility, and some regions have none. If one is on offer, read the terms closely.

• How often can the operator control your device, and for how long?
• Can you opt out of an event, and is there a penalty?
• How is the payment or credit calculated, and what does it depend on?
• Who owns the data collected from your devices?
• Does taking part affect your equipment warranty or your net metering terms?

Net metering and billing rules differ by province, as the Alberta net metering guide shows for one case. Ask your utility and your provincial energy ministry for the current rules and any program details. Treat any promised annual earnings with caution until you have seen the contract.

How does a VPP differ from a microgrid or peer-to-peer trading?

A microgrid is a physical local network that can separate from the main grid. A VPP is a software layer that links devices wherever they are, and they stay on the normal grid. Peer-to-peer trading, discussed in peer-to-peer solar energy trading, is a market for selling energy between neighbours, which is a separate question from controlling devices.

Drake Landing Solar Community in Okotoks, Alberta was not a VPP, but its pairing of solar, storage and a controller reflects the same idea of making supply and demand meet through storage, described on the how it works page.

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