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Analysis of the Virtual Power Plant Model Based on the Use of Emergency Generators in South Korea
Abstract
This study analyzes the economic efficiency of the virtual power plant (VPP) model that aims to integrate a number of emergency generators installed at the consumer end and operate them as a single power plant. Several factors such as the demand response benefits from VPP operation and costs incurred for converting emergency generators into VPP are considered to assess the economic efficiency of the proposed VPP model. Scenarios for yearly VPP conversion are prepared based on the installed capacities of the emergency generators distributed in South Korea, while the costs and benefits are calculated from the viewpoints of participants and power companies in accordance with California Test Methods. Furthermore, a sensitivity analysis is conducted on the cost factors among those affecting the economic efficiency of VPP business because these two factors have a great impact on benefits.
... even microgrids [23]. In several, sensitivity analysis was conducted [17][18][19], but only a few papers focused on VPP economic efficiency [24,25]. Therefore, this paper fills the research gap on VPP economic efficiency. ...
... In [24], the net present value of economic efficiency was assessed from the perspectives of VPP service providers and power companies. The authors considered all benefits associated with the operation, as well as distribution and operation costs that are incurred only for distributing emergency generators in South Korea. ...
... It seems that the situation is similar in other countries. Therefore, investors look closely at the VPP business and analyze its profitability from the point of view of end users and energy organizations (e.g., energy utility companies) by using the cost-benefit analysis (CBA) method [24] or a modified NPV [33]. Actual Polish conditions and relations in the holding company were taken into account. ...
This paper analyzes the technical and economic possibilities of integrating distributed energy resources (DERs) and energy-storage systems (ESSs) into a virtual power plant (VPP) and operating them as a single power plant. The purpose of the study is to assess the economic efficiency of the VPP model, which is influenced by several factors such as energy price and energy production. Ten scenarios for the VPP were prepared on the basis of the installed capacities of a hydropower plant (HPP), rooftop solar photovoltaic (PV), and energy-storage system (ESS), as well as weather conditions, in Poland. On the basis of technical conditions, it was assumed that the maximum power capacity of the ESS equaled 1.5 MW. The economic efficiency analysis presented in this paper demonstrated that, in seven years, the VPP will achieve a positive value of the net present value (NPV) for a scenario with 0.5 MW battery storage and rainy summers. Furthermore, sensitivity analysis was conducted on price factors and DER production volume. The price variable had a major impact on the NPV value for all scenarios. The scenario with a 0.5 MW battery and typical summers was highly sensitive to all factors, and its sensitivity decreased as the ESS capacity grew from 0.5 to 1.5 MW.
... Only a few papers focus on the economic efficiency of the VPP [22,23]. In paper [22], the net present value of economic efficiency is assessed from the perspectives of VPP service providers and power companies. ...
... Only a few papers focus on the economic efficiency of the VPP [22,23]. In paper [22], the net present value of economic efficiency is assessed from the perspectives of VPP service providers and power companies. In paper [23], the authors compared the economic efficiency of integrating various flexibility technologies (e.g., DER) into a VPP. ...
In the case of new investment in RES technology, there are two issues related to efficiency assessment. The first one is how to join technical, financial and economic efficiency assessments in one. An investment feasibility study is usually conducted through a financial analysis to obtain the internal rate of return and the net present value. However, a new RES investment is typically financially unprofitable unless the environmental and social aspects are included. The second one is a lack of required financial data. The new RES investment is often innovative and neither the owner nor other entities have financial data on the operating costs and expenditure for the last periods. Therefore, in this paper, we proposed two methods of efficiency assessment. The first one is based on the avoided costs theory. Furthermore, the second one belongs to heuristic methods and is based on the experts’ assessment of different kinds of parameters. The purpose of this study is to assess the efficiency of the pilot project of VPPs using two recommended methods. This paper emphasizes the advantages and disadvantages of each method. The actual technical and financial data for the period of six months from the pilot study were calculated.
... The conventional generation operator (TSO) is also established. Furthermore, a VPP system is proposed in [23] to satisfy the emergency power demand in South Korea that integrates different generation units. The proposed scheme considers only economic feasibility: to maximize the profits at a low cost. ...
Due to the rapid growth in power consumption at domestic and industrial appliances, distributed energy generation units face difficulties in supplying power efficiently. The integration of distributed energy resources (DERs) and energy storage system (ESS) provide a solution to these problems using appropriate management schemes to achieve optimal operation. Furthermore, to lessen the uncertainties of distributed energy management systems, a decentralized energy management system named virtual power plant (VPP) plays a significant role. This paper presents a comprehensive review of 65 existing different VPP optimization models, techniques, and algorithms based on their system configuration, parameters, and control schemes. Moreover, the paper categorizes the discussed optimization techniques into seven different types: conventional technique, offering model, intelligent technique, price-based unit commitment (PBUC) model, optimal bidding, stochastic technique, and linear programming to underline the commercial and technical efficacy of VPP at day-ahead scheduling at the electricity market. The uncertainties of market prices, load demand, and power distribution in the VPP system are mentioned and analyzed to maximize the system profits with minimum cost. The outcome of the systematic categorization is believed to be a base for future endeavors in the field of VPP development. energy markets; electricity market; demand response; optimization in virtual power plants; price-based unit commitment model; intelligent technique in power management; day-ahead scheduling.
The emergence of Virtual Power Plant (VPP) can be attributed to the major boost of distributed energy resources (DER), which satisfies the changing needs of modern society on energy industry. Based on this concept, DER units disregarding the differences in their individual technology are loosely aggregated with a unique interface to the external grid and the energy market. This paper gives a brief overview of state of the art of the VPP technologies and proposes a generic VPP (GVPP) model running under liberalized electricity market environment. An attempt is made to provide an outline of the main functions that are necessary for the efficient operation of the GVPP. By utilizing the developed function-based platform, GVPP developers with different system requirements are able to get the most flexibility out of the GVPP model. A case study shows how a broker GVPP is developed based on the selection of appropriate functions.
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