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Energy, Sustainability
and Society
Virtual power plants: anin-depth analysis
oftheir advancements andimportance
ascrucial players inmodern power systems
Sobhy Abdelkader1,2*, Jeremiah Amissah1 and Omar Abdel‑Rahim1,3
Abstract
Background 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 manage‑
ment. 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 stake‑
holders 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.
Main text The methodology used for this article entailed a thorough examination to identify relevant studies, arti‑
cles, 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 incen‑
tives have a bigger impact on how well they integrate.
Conclusion 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 stakehold‑
ers 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.
Keywords Contemporary power systems, Distributed energy resources, Renewable energy sources, Virtual power
plants
*Correspondence:
Sobhy Abdelkader
sobhy.abdelkader@ejust.edu.eg
Full list of author information is available at the end of the article
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Page 2 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
Background
ere is an urgent need for creative and sustainable alter-
natives as the world’s need for energy rises, while fossil
fuel-based power generation methods are increasingly
scrutinized for their environmental effects [1]. Cen-
tralized 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 emis-
sions that harm the environment and cause climate
warming which has triggered the current global climate
crisis [3]. e contribution of the different sources to
world energy consumption is shown in Fig.1.
On the other hand, energy demand has grown signifi-
cantly as a result of global economic growth. e demand
for electricity has increased steadily over the past dec-
ades, by an average of 15%, and is anticipated to increase
by 30% by 2040 [4]. is calls for innovative ideas to sup-
port the demand while looking out for the environment.
erefore, 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 con-
sumed. ese 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 stakehold-
ers with economic and technical benefits [5]. While DERs
offer power systems opportunities, they also bring with
them challenges because of their intermittent and sto-
chastic nature. DERs are often described as stochastic
and intermittent due to their inherent characteristics and
the factors that influence their generation. is nature of
DERs is caused by elements including weather changes,
operational uncertainties like maintenance, and equip-
ment performance, which can result in unanticipated
variations in DER generated or connected output. Insta-
bility in the grid is brought on by the rising use of DERs
on the demand side, which worsens load demand fluctua-
tions. As a result, real-time monitoring and dispatching
are essential for the grid’s safe operation [6–9]. Further-
more, the power system needs more adaptability, which
can be provided by several mechanisms, such as demand-
side management, and energy storage systems (ESS).
e 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-break-
ing 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, flex-
ibility, 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 photo-
voltaics, wind turbines, battery energy storage systems
(BESS), and demand response technologies. e primary
function of a VPP is to optimize the collection of these
DERs in response to grid conditions, energy demand,
and market signal. rough 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. How-
ever, 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.
e combination of these various resources ena-
bles 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 distrib-
uted resources into a unified virtual power entity, laying
the groundwork for the conceptualization and devel-
opment of VPPs [13]. Since then, VPPs have evolved
from theoretical notions to real-world applications
owing to technical developments, and breakthroughs in
32%
23%
27%
4%
7%
7%
OilNatural Gas Coal
Nuclear Energy HydroelectricPV,Wind,Biomass
Fig. 1 Global energy sources data
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Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
communication technology. e adoption of VPPs has
been hastened by the spread of smart grid technolo-
gies 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 con-
trol electricity consumption patterns to correspond with
variations in renewable generation. Demand-side man-
agement improves grid reliability and efficiency by lower-
ing 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 devel-
oping electricity market because of their involvement in
energy trading and the provision of ancillary services,
which help to stabilize prices and maintain system resil-
ience [11, 21]. A typical architecture of a VPP is shown
in Fig.2. With the aid of technology like cloud comput-
ing, a VPP aggregates various power consumers, ESS, and
power generators to provide flexible adjustments. A com-
munication protocol is used by the components of a VPP
to transfer data to the VPP communication system. is
communication protocol enables efficient coordination
for the VPP to adjust energy production which allows
supply to the grid with dependable cost-effective electric-
ity via the electricity market [22]. e data acquisition
platform aids in gathering information about the genera-
tion, consumption, and state of charge of the portfolio of
DERs for optimal decision-making.
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 man-
aging energy. e 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 devel-
oping 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. e 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 micro-
grid to a VPP have also been covered by [24]. e over-
view examines RERs integration, opportunities for VPPs
in the field of smart distribution systems, and effective
management mechanisms. e 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 opera-
tion, 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 environ-
ment is the focus. DER integration challenges, which
Fig. 2 Architecture of a VPP
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Page 4 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
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. e
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. e 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 electric-
ity grid. e assessment gave a summary of the develop-
ment and use of VPP for carbon reduction in the Chinese
power system. e study, however, did not cover tech-
nologies that can improve the management and opera-
tion of VPPs, notably in addressing the intermittent and
volatile nature of DERs. In the domain of energy manage-
ment, authors of [28] provided a summary of resource
scheduling in VPPs and addressed questions on schedul-
ing 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. e case of a multi-energy coupled
VPP has been presented in [29]. e purpose of this study
was to address the advantages of multi-energy linked
VPPs engaging in various energy markets. e issue of
enhanced communication technology, data privacy and
cybersecurity are some of the challenges which were not
featured in this study.
e idea and structure of VPPs are concisely described
in [30] with regard to its two main goals—energy man-
agement 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. e 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. e 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.
ere 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. e 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. is emphasis highlights the vital
role that VPPs play in ensuring grid stability, foster-
ing the integration of RES, and promoting sustain-
ability.
• Integration of technical and market aspects by pro-
viding a comprehensive analysis of VPP operation.
is integration is crucial as it shows that VPPs
actively participate in energy markets and actively
optimize energy resources, which facilitates effec-
tive electricity trading and grid balancing.
• Application of cybersecurity and data privacy tech-
niques 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 con-
trol how VPP operates.
• Identification of challenges, providing recommen-
dations, and prospects.
Main text
VPP advancements
e 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 estab-
lished the foundation for the development of VPPs and
their eventual prominence in modern power systems
[31, 32]. is part of the paper will focus on the evo-
lutionary journey of VPPs, highlighting the early con-
cepts, key milestones, and technological advancements
that shaped their development into critical enablers of
modern energy ecosystems.
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Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
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 pro-
posed the idea of coordinating and optimizing a portfolio
of distributed energy resources to increase operational
effectiveness and grid reliability. However, due to lim-
ited 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 reg-
ulatory uncertainties surrounding VPPs were some of the
causes of lack of practical deployment. References [33–
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’ reluc-
tance to adopt the unique strategy.
The breakthrough stage (2010s–2020)
e growth years presented milestones and key turn-
ing 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 Euro-
pean Commission emphasized the potential of VPPs to
increase grid flexibility and integrate renewable energy.
is communication aided in increasing policymakers’
and stakeholders’ understanding of VPPs [39–45]. 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 advance-
ment, and demand response programs[49], allowing
aggregated DERs to respond to grid signals and enhance
grid stability [50]. is marked the initial practical appli-
cation of VPPs, showcasing their ability to support grid
operations.
The future (2021 andbeyond)
e 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]. e 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 applica-
tions in modern power systems as VPPs evolved. e
development of VPPs into essential enablers of decen-
tralized, 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 Table1 for further
reading.
VPP planning, roles, andsustainability
Planning
VPP planning is a crucial and multifaceted process that
entails strategic design, coordination, and optimization
to provide effective and dependable energy management.
e main goal of VPP planning is to maximize the advan-
tages for both grid operators and consumers while opti-
mizing the potential of varied DERs and guaranteeing
their seamless integration with the power grid. e plan-
ning 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 opera-
tions. 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 uncertain-
ties resulting from elements like weather and producing
forecasts with a high level of assertiveness [56]. e issue
of forecasting will be discussed later in the section dedi-
cated to the roles of VPPs. e VPP operations may be
constrained by infrastructure, technological, and techni-
cal limits [57]. e model shown in [26] emphasizes the
importance of effectively measuring and managing con-
trollable loads in heating, ventilation, and air condition-
ing (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. e aspects of techni-
cal and economic frameworks of the VPP will be delved
deeper in the sections dedicated to the technical and eco-
nomic aspects of VPPs. It is important to note that good
operational planning directly affects good economic
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Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
outcomes [55]. e economic viability of the VPP and its
prospective revenue streams, including energy trading
[58], demand response participation [59], and the sup-
ply of ancillary services [21], are assessed using finan-
cial 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 facili-
tates 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 tech-
nological, 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 sus-
tainable and effective energy future. is planning
Table 1 Summary on the advancements of VPPs
Refs. Year Brief explanation Challenges
[33] 1997 VPPs idea was conceived in accordance with a flexible partner‑
ship between autonomous, market‑driven enterprises for the pro‑
vision of consumer‑focused energy services
Limited technological capabilities
[34] 2003 The idea elevated from the previous definition to a system
that will effectively integrate the VPPs into the energy market
using cogeneration units, small‑scale RES and EMS
High cost of communication and control systems
[35] 2004 A novel concept for providing heat and energy near the load
involved grouping small generators
[36] 2007 VPPs were defined as a flexible mix of DERs that would aggregate
numerous different DERs and produce a single operational file
for control and management depending on the specifications
of each DER
Reluctance to adopting the idea
[37] 2008 The most efficient methods for integrating DERs into the power
systems were frequently cited as VPPs and Microgrids (MGs),
although they were distinct. Their differences will be discussed
further in this paper
Regulatory uncertainties for grid integration
[38] 2009 DG and controllable loads took part in grid operations in real
time as part of an open electricity market. To increase their
usability and manageability in the market, DERs were integrated
into the VPP concept
Investors’ risk perceptions
[39] 2010 At this turn, software applications were implemented for remote
dispatch and optimization within a secured network Data management and analytics
[40] 2011 The advent of electric vehicles (EVs) paved the way for their incor‑
poration into the VPPs DERs portfolio Uncertainties with charging and discharging patterns
[41] 2014 Considering both market prices and demand‑side projections
for energy, the concept of thriving VPPs allowed for a reduction
in operational expenses
Market price volatilities
[42] 2017 The idea was more widely used as a power source for distribution
networks thanks to the cooperation of the transmission system
operator (TSO) and distribution system operator (DSO)
Incorporating vast number of energy sources which
causes grid disturbances
[43] 2018 Financial gains have become very feasible for prosumers. To
maximize financial gains for all system participants, VPPs were
termed as a group of DERs that participated as a single entity
in the energy and reserve power market
Market price volatilities
[44] 2019 The growing use of DERs presented challenges to the grid. The
stochastic nature of these DERs gained more traction and atten‑
tion
Challenges with grid dependability
[45] 2020 A framework for the Internet of Energy for the various stakehold‑
ers of the VPP Cybersecurity threats, cost in technological upgrade
[52–54] 2021 and beyond VPP energy production optimization, increased profit margin,
and the issue of cybersecurity are well established for further
absorption of the VPP concept into the present‑day and future
energy system
Cybersecurity threats, market price volatility, scalability
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Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
phase can be summarized as: aggregating existing
and new energy resources.
• Ownership structure: e internal ownership struc-
ture of VPPs can vary depending on the specific
implementation and stakeholders involved. It may
involve collaboration between multiple stakeholders
including energy producers, consumers, and aggrega-
tors.
• Regulating and market considerations governing
energy markets and grid operations.
• Implementation of an energy management system
to provide functionalities such as real-time monitor-
ing, 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.
Roles
e 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 per-
form 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 sustain-
able, effective, and resilient. e 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 sin-
gle virtual entity. rough this aggregation, grid man-
agement is improved, enabling the VPP to maximize
DER usage in response to grid signals. e DERs’
activity within the VPP is managed and coordinated
by the VPP operators. e main responsibility is
resource optimization and involvement in energy
markets.
e 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, allow-
ing 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 driv-
ing 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 aggrega-
tor 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 electric-
ity while minimizing the possibility of blackouts and
voltage variations by balancing energy generation
and consumption from various DERs [66]. ey are
able to provide ancillary services like frequency regu-
lation and voltage management, which are essential
for preserving grid stability [67]. e general stabil-
ity 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 [68–70]. is
integration is the VPP operator’s responsibility. is
is accomplished by coordinating the operation of
diverse RERs, such as solar panels, wind turbines,
and such that they work as a unified system. How-
ever, due to their erratic nature, integrating RESs into
the power systems presents its own challenges [71,
72]. ese challenges come about because of genera-
tion fluctuations due to weather conditions and time
of the day. e 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 eas-
ier for the integration of the RESs effectively. ey
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. is is
important because RESs are becoming increasingly pop-
ular due to their environmental benefits, but they can
also introduce power quality issues. is is a challenge
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Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
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 bring-
ing electricity prices into affordable band. Spreading the
benefits of renewable integration into the spheres of agri-
culture, where in [74], authors have created a mechanism
to encourage energy-efficient agriculture by minimiz-
ing dependency on fossil fuels for water-table pump-
ing. rough 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. is synergy not only fosters eco-
nomic 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].
is allows better grid management and optimization of
the DERs. e VPP employs such tools to better man-
age the generation of DERs. A summary of various fore-
casting techniques provided in the literature is listed in
Table2. Analysis of forecasting models to aid in the inte-
gration 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]. is 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]. ese services
boost the grid’s dependability and resilience even more,
promoting a stronger energy infrastructure that can han-
dle the rising proportion of RESs.
e 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 sys-
tem as the world progresses toward a sustainable energy
future.
DER technologies applied inVPPs
In VPPs, various DERs are used, including solar panels,
wind turbines, ESS, EVs, and demand response loads.
ese DERs are aggregated and optimized within the
VPPs, allowing for efficient management and coordina-
tion [55]. By harnessing the collective capacity of diverse
DERs, VPPs enhance grid stability, enable renewable
energy integration, and support demand response strat-
egies, contributing to a more sustainable and flexible
energy ecosystem. A VPP should ensure that DER inte-
gration keeps the system operating properly by ensuring
Table 2 Forecasting techniques
CNN Convolutional Neural Network, ARIMA autoregressive integrated moving average, ANN Articial Neural Network, SVR support vector regression, MPC model
predictive control, LSTM long short-term memory
Refs. Objective Forecasting method used Practical implications Time scale Software used
[82] Probabilistic multi‑period forecasting
of DERs CNN Generate probabilistic forecasts 24 h N/A
[83] Forecast DER production and con‑
sumption ARIMA, Gradient boosting,
random forest Method can be used by TSOs
and DSOs 7 days ahead N/A
[84] Stochastic load and intermittency
forecasting Optimizing the scheduling of DERs N/A MATLAB,
[85] Focus on growth, development,
and future of RESs ANN, SVR Power system planning Real‑time (15min) N/A
[86] Forecasting framework to predict
electrical, thermal net load Deep belief network‑based Design and develop efficient fore‑
casting model Day‑ahead N/A
[87] Predicting wind power Fuzzy logic, MPC SG applications Monthly MATLAB,
[88] Short‑term load forecasting Genetic algorithm Future planning of the power system
network 24 h, 48 h N/A
[89] Wind speed forecasting Neural network Proper planning and operation 24 h MATLAB
[90] To deal with the challenges
of increased penetration of PV
into the electric grid
Multi‑layer perceptron Smart grid and microgrid applica‑
tions 24 h MATLAB
[91] To predict accurate power genera‑
tion from multiple RESs CNN, LSTM, Auto regression Power system planning 24 h N/A
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Page 9 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
the stakeholders’ continual consumption requirements
[92]. Various DER technologies applied in VPPs in the
reviewed literature are summarized in Table3.
Out of the 15 References evaluated regarding DER
technologies used in VPPs, it is evident from Table3 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.
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 cli-
mate change (SDG 13—Climate Action).
Additionally, through promoting technological
advancements and innovation in the energy indus-
try, VPPs provide a substantial contribution to SDG 9
(Industry, Innovation, and Infrastructure). VPPs pro-
mote grid modernization and improve overall energy
infrastructure by integrating smart grid technologies,
advanced analytics, and artificial intelligence. ese
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 Ine-
qualities). For VPPs to be deployed in a way that supports
SDG goals for eradicating poverty and minimizing ine-
quality, 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. is calls
for figuring out ways to make technology more accessible
and inexpensive for everyone, especially those living in
Table 3 DER technologies applied in VPP
WT wind turbine, TP turbine power, PV photovoltaic, LU load units, PHS pumped hydro system, NP nuclear plant, HVAC heating, ventilating, and air conditioning; HPP
heat pump power, HP hydro power, GT gas turbine, FC fuel cell, EV electric vehicle, CL controlled load, CHP combined heat and power, BESS battery energy storage
system; B/BP biogas/biomass power
Refs. WT TP PV LU PHS NP HVAC HPP HP GT FC EV CPP CL CHP BESS B/BP
[93] – – – – – – – – – – – ✓–✓– – ✓
[94]✓✓✓–✓– – – – – – – – – – – ✓
[95] – – – – – – – – – – – ✓–✓– – –
[96]✓ ✓ – – – – – – ✓–✓– – – – –
[97]✓– – – –– ✓– – – – – ✓–✓– – –
[98] – – – – – – – – – – – ✓–✓– – –
[99]✓✓✓– – – – – – – – – – – – ✓–
[100]✓✓✓– – – ✓– – ✓– – – – – ✓–
[101] – ✓✓– – – – – ✓– – – – – – – –
[102] – ✓✓–✓– – – – ✓– – – – – – –
[103]✓–✓– – – – – ✓ ✓ ✓ – – – ✓– –
[104] – – – – – – – – – – – – – – ✓–✓
[105]✓– – – – – – – – – – – – ✓–✓
[106]✓–✓– – – ✓–✓– – – – – ✓– –
[107]✓–✓– – – – – – – – – – – ✓– –
0
5
10
WT
TP
PV
PHS
NP
HVAC
HPP
HP
GT
FC
EV
CPP
CL
BESS
B/BP
Literature
Type of DER
Fig. 3 DER application in literature
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Page 10 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
rural or underdeveloped areas. By doing this, VPPs may
contribute to the development of a more just and sustain-
able energy future in which everyone, regardless of finan-
cial situation, has access to safe and dependable energy.
Furthermore, the environmental impact of VPPs [108]
and their associated technologies require careful consid-
eration to achieve SDG 12 (Responsible Consumption
and Production). Lithium-ion batteries, which are used
in ESS, are one example of a crucial mineral and mate-
rial 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 meth-
ods must be implemented in material sourcing and VPP
operation.
Moreover, numerous steps can be taken to guaran-
tee 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 invest-
ments are encouraged in their research, development,
and implementation. is will also encourage technologi-
cal breakthroughs and cost reductions. Also, a successful
integration of VPPs into the energy economy depends
on raising consumer awareness and engagement. e
acceptance of VPP technology can be increased by edu-
cating consumers about the advantages of VPP partici-
pation, 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.
ey 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 responsi-
ble use and production. VPPs are critical enablers of a
greener, more inclusive, and resilient energy future and
can help accomplish specific SDGs by establishing sup-
portive 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 sustain-
able deployment and optimization.
Cybersecurity anddata privacy
e protection of the grid’s stability and dependability
is one of the main justifications for prioritizing cyberse-
curity 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.
e efficient operation of VPPs depends on data integ-
rity [115]. For making decisions about the generation,
distribution, and use of energy, VPPs depend on accurate
data. Cybersecurity measures guard against data altera-
tion or manipulation, ensuring that VPP operators have
reliable data for maximizing energy resources and deliv-
ering 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 cyber-
security 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 incre-
mental patches installation aids in robust security pos-
ture, 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 block-
chain technology reduce the risk of single point failure
as the technology operates on a decentralized network.
is 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. is safe-
guards sensitive information from interception or unau-
thorized access.
Data privacy and cybersecurity are essential elements
of VPP operations. ey 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, cyber-
security and data privacy must be prioritized as VPPs
continue to develop and broaden their role in contempo-
rary energy systems [120].
Regulation andcompliance
e operation of VPPs is greatly influenced by legisla-
tive or regulatory activities. is section will cover the
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Page 11 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
regulatory structure that governs VPPs, emphasizing
significant importance and their effects on the energy
industry.
In the domain of grid integration standard and require-
ments, regulating bodies establish grid codes and inte-
gration standards that the VPP must adhere to when
connecting to the electrical grid. e safe and dependable
grid integration of DERs is ensured by these standards.
e 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, opera-
tion, protection, and connectivity to distribution net-
works 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. is standard
has received widespread acceptance on a global scale in
outlining the requirements for the design, implementa-
tion, 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 intercon-
nection 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.
e European Committee for Electrotechnical Stand-
ardization (CENLEC), which is made up of 34 European
Nations, oversees standardization efforts to increase
commercial viability and foster technological growth.
e 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 tan-
dem 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 0.6kV, respectively. e Brit-
ish standard BS EN50438:2007 also offers technical
advice for DER interconnection. e VDE-AR-N 4105
standard in Germany also offers technical recommenda-
tions for connecting DERs and low voltage systems. e
JEAG.9701-2001 standard in Japan offers technical rec-
ommendations for distributed generating grid-connec-
tion. e 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. e 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 com-
plicated regulatory environment that is unique to their
locations. It is essential for the implementation and
operation of VPPs to comprehend and follow local leg-
islations. 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 ofVPPs
e technical operations of a VPP involve a series of com-
plex and coordinated processes to efficiently manage and
optimize the aggregated DERs within the VPP. Accord-
ing to Ref. [124], the technical features of VPPs provide
dynamic interaction for the integration of power distri-
bution based on auxiliary services. ese technical oper-
ations can vary depending on the specific architecture
and goals of the respective VPP. is section of the paper
delves into the technical intricacies of VPPs and explores
their roles as key enablers in the transition toward a sus-
tainable and resilient energy future. Some of these tech-
nical 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 Table2 are
employed to forecast energy generation and demand
profiles, ensuring dynamic resource optimization.
e VPP intelligently dispatches DERs based on grid
conditions and market signals, balancing supply and
demand to enhance grid stability and maximize rev-
enue 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 pro-
vided in Table4.
• Load balancing and grid support/ancillary service:
e load balancing and grid support functions of
a VPP are very crucial [135]. e VPP dynamically
modifies energy generation and consumption to fit
grid demands by aggregating and optimizing vari-
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Page 12 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
ous 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. is load-balancing ability makes
VPPs essential for guaranteeing a dependable and
resilient electricity supply since it improves grid sta-
bility, lowers grid stress, and adds to overall grid sup-
port.
In addition to its role of aggregating and optimiz-
ing DERs, a VPP offers a range of essential ancillary
services. ese services include frequency regula-
tion. is is achieved by maintaining grid frequency
within acceptable bounds through rapid power
adjustment [136–139]. VPPs also provide voltage
support by injecting or absorbing reactive power to
stabilize voltage levels [80, 140, 141].
Moreover, VPPs contribute to peak regulation, man-
aging demand during high load periods to alleviate grid
stress [142–144]. e 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 circum-
stances 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 elec-
tricity [59, 81, 96]. is demand-side flexibility not
only supports grid stability, but also empowers con-
sumers to actively participate in energy conservation,
contributing to a sustainable energy ecosystem [66,
145]. e VPP’s ability to efficiently balance energy
supply and demand through demand response and
load management strategies makes it a pivotal stake-
holder in modern power systems.
e 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 opti-
mizing various DERs.
Market/economical aspect ofVPP
VPPs provide an appealing scenario for the future of
energy systems in terms of their commercial and finan-
cial prepositions. VPPs can completely alter the econom-
ics of electricity generation and consumption as they
are dynamic aggregators of various DERs. VPPs maxi-
mize the use of DERs, optimize income generation, and
improve participation in the energy market [11]. e VPP
Table 4 Resource optimization and scheduling
ANN Articial Neural Network, IoT Internet of Things, MILP Mixed Integer Linear Programming, PSO Particle Swarm Optimization, PLC Programmable Logic Controller
Refs. Objective Method Practical implications Limitations
[127] Minimizing generation cost Stochastic optimization, Markov‑
chain Increase efficiency and utilization
of RESs Few RESs
[128] Maximizing net profit MILP Provides a model for scheduling
a VPP Perfect assumption of uncertain
parameters
[129] Efficient utilization of energy Fuzzy chance‑constrained pro‑
gramming Improve efficiency and sustain‑
ability of the power system Data privacy
[130] Optimal self‑scheduling plan
for VPPs Robust optimization grid stability and reliability
of power system Assumption of perfect wind power
generation
[131] Management and schedul‑
ing of MGs in VPPs to optimize
the system efficiency
ANN Grid decarbonization Data privacy
[79] Smart energy management PLC, IoT Dispatching energy optimally
to achieve profit Only validated through simulations
[132] Optimal dispatch to minimize
expected cost MILP Improved energy management Computational complexity
[116] Optimize residential users’ energy
scheduling for optimal energy
management
Blockchain For DER integration Coordination and cooperation
[133] Real‑time smart energy manage‑
ment Hybrid PSO Energy management Simulation only
[134] Day‑ahead energy management
for aggregate prosumers Column and constraint genera‑
tion algorithm Energy management Real‑world experiment
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Page 13 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
does this via real-time data analytics, complex forecast-
ing algorithms, and clever energy trading methods. As a
result of their capacity to offer a versatile and dispatch-
able 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, sup-
port demand response programs, and provide ancillary
services to the grid. VPPs technology’s commercial impli-
cations 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, dis-
tribution, 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 sys-
tem’s balancing mechanism due to the random nature
of the RESs generation schedule. One significant ben-
efit of VPPs is that they boost their shared profit by sell-
ing energy on behalf of the DER owners to improve the
balancing mechanism when they access the wholesale
electricity markets. e 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 par-
ticipate 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 stra-
tegically bid these aggregated resources to optimize
revenue generation [84, 147–151].
• Ancillary service market: VPPs actively participate
in the ancillary services market by providing critical
assistance to the electric grid. e 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 sup-
ply, 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 ser-
vices markets into VPP modeling in order to enable
regulation that ensures the security of electricity sup-
ply [26, 143, 150, 152–156].
• 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 reli-
ability. 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 opera-
tor’s outage of generators. By participating in the
reserve market, VPPs offer a valuable and flexible
solution for grid operators to maintain grid reliabil-
ity. 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, 157–160].
• Intra-day/real-time market: e VPP actively partici-
pates in the intra-day market by precisely adjusting
the energy traded in the day-ahead market. e 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 dis-
patch time approaches. VPPs can thus participate in
real-time balancing markets to avoid penalties. e goal
of the real-time market is to reduce the imbalance errors
and their associated cost. e various electricity markets
in which the VPP participates are provided in Table5
to outline the key characteristics. Figure 4 also gives a
graphical analysis of the key characteristics of the elec-
tricity market that the VPP operates in.
Real‑world implementation ofVPPs
VPPs in the real world provide fascinating insights on
their revolutionary impact on contemporary power
systems. VPP implementations around the world dem-
onstrate their adaptability in maximizing DERs. ese
examples elaborate on the value of VPPs in grid stabil-
ity, renewable generation, and demand response. VPP
projects are becoming more common, proving their
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Page 14 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
potential to revolutionize energy systems. e 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 Pow-
erpacks and Powerwall promote grid dependability and
the integration of renewable energy. ese real-world
examples demonstrate how important VPPs are in creat-
ing a global energy ecosystem that is robust, efficient, and
sustainable. Selected real-world applications [124, 172]
are summarized in Table6.
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: e significance of devel-
oping flexible and scalable systems has been shown
by the successful VPP deployments. VPPs support a
variety of DERs and adjust to shifting market dynam-
ics 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 inter-
connection with grid operators, and other market
participants.
• Market participation: e significance of active mar-
ket participation has been emphasized by real-world
VPP applications. Using effective energy trading
Table 5 Electricity market characteristics
Refs. Electricity market Characteristics
[84, 147, 150, 151, 155] Day‑ahead market 24 h ahead energy market participation
[26, 143, 150, 153–156] Ancillary market Generation and demand balancing
[26, 157–161] Reserve market Responding to unexpected events such as generator loss
[43, 162–166] Intra‑day market Modifying energy traded in day‑ahead market
[147, 167–171] Real‑time market Managing deviations in the day ahead and intraday markets
Fig. 4 Electricity markets characteristics
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Page 15 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
techniques and intelligent bidding in electricity mar-
kets. VPPs can maximize income production and
assist the integration of RESs at a fair price.
e 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 man-
agement and analytics, achieving a positive return on
investment and profitability are some of the model chal-
lenges that these projects face. Collaboration between
stakeholders is necessary to overcome these obstacles.
Conclusions
VPPs have become transformative solutions revolution-
izing 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 adapt-
ability to shifting grid conditions and market dynam-
ics, have been shown to be essential for successful VPP
adoption. VPPs have been able to improve cost-effective
renewable energy integration and optimize revenue gen-
eration through active market participation and smart
bidding tactics. Additionally, for VPPs including resi-
dential or commercial participants, consumer engage-
ment and education are crucial for assuring buy-in and
demand response programs.
Embracing the lessons learnt in the referenced lit-
erature, a VPP stands as a pivotal enabler in our jour-
ney 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.
e ability of VPPs to maximize DERs, boost renewa-
ble 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. e successful operation of VPPs
in the modern era depends on a judicious blend of
cutting-edge technology, supportive regulatory frame-
works, and seamless connectivity with the existing elec-
tricity infrastructure. e aggregation and control of
various DERs can be optimized by using real-time data
analytics, artificial intelligence, and smart grid technol-
ogies. However, VPPs must overcome several obstacles,
such as data security, grid interconnection, and scala-
bility 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 frame-
works that support VPP implementation and market
involvement is essential for the efficient operation of
VPPs. e seamless integration of VPPs into current
energy markets and the promotion of novel business
models are made possible by clear regulations on mar-
ket access, price structures, and grid services. Overall,
an effective operation of VPPs in this era and beyond
will depend on the following:
Table 6 Summary of real‑world VPP applications
CHP combined heat and power, ESS energy storage system, PV photovoltaic, WT wind turbine
Name of VPP DER type Aggregated assets Capacity Geographical operation Investments Year of
commencement
Nextkraftwerke Biogas, CHP, PV, ESS, WT 9000 7700 MW Germany, Belgium, France,
Austria, Italy, Netherlands N/A 2009
Fenix Project CHP, WT 1000 + 0.168 GW UK, Spain, France $17.4 m 2005
WEB 2 Energy CHP, PV, WT, Biogas 16 40.5 MW Germany, Poland N/A 2009
EDISON EVs 52 125 MW Denmark, Germany N/A 2011
ConEdison PV, Battery storage 1000 100–300 MW USA ‑N/A 2016
Zhangbei PV, WT, ESS About 500 49.5 MW China ‑N/A
AGL VPP Batteries, PV 1000 5 MW Australia $19.5 m 2017
SA Tesla VPP Solar panels, Batteries 4000 250 MW Australia $66 m 2018
Statkraft Wind turbines, Solar panels 1000 10 GW Norway N/A 2007
OhmConnect Solar panels 1000+ 550 MW California $20 m 2014
SunRun Solar panels About 8000 990 MW California $50 m 2007
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Page 16 of 21
Abdelkaderetal. Energy, Sustainability and Society (2024) 14:52
• 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 participa-
tion.
• Implementation of robust data security measures to
protect sensitive information, guarantee consumer
privacy, and safeguard against potential cyberat-
tacks.
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 enhance-
ment, and improved integration of RESs.
Abbreviations
ANN Artificial Neural Network
B/BP Biogas/biomass power
BESS Battery energy storage system
CHP Combined heat and power
CNN Convolutional Neural Network
CL Controlled load
DERs Distributed energy resources
DG Distributed generation
DSO Distribution system operator
ESS Energy storage system
EU European Union
EVs Electric vehicles
FC Fuel cell
GT Gas turbine
HP Hydropower
HPP Heat pump power
HVAC Heating, ventilation, and air conditioning
IoT Internet of Things
LSTM Long short‑term memory
LU Load units
MGs Microgrids
MILP Mixed Integer Linear Programming
MPC Model predictive control
NP Nuclear power
PHS Pumped hydro storage
PLC Programmable logic control
PSN Power System Network
PSO Particle Swarm Optimization
PV Photovoltaic
RERs Renewable energy resources
RESs Renewable energy sources
SDGs Sustainable Development Goals
TP Thermal power
TSO Transmission system operator
UN United Nations
VPP Virtual power plant
WT Wind turbine
Acknowledgements
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.
Author contributions
SA set the main topic of the paper. JA searched for and collected most of the
references. All authors contributed in analysis and writing. OA and SA worked
on the review comments and carried out the required amendments. All the
authors reviewed and approved the final version before submission.
Funding
Open access funding provided by The Science, Technology & Innovation
Funding Authority (STDF) in cooperation with The Egyptian Knowledge Bank
(EKB).
Availability of data and materials
Data sharing is not applicable to this article as no datasets were generated or
analyzed during this work.
Declarations
Ethics approval and consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The authors declare no competing interests.
Author details
1 Department of Electrical Power Engineering, Egypt Japan University of Sci‑
ence and Technology, New Borg El‑Arab City, Egypt. 2 Electrical Engineering
Department, Mansoura University, Mansoura 35516, Egypt. 3 Electrical Engi‑
neering Department, Aswan University, Aswan, Egypt.
Received: 14 August 2023 Accepted: 7 August 2024
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