Virtual Power Plants vs Microgrids in Commercial Real Estate

A new term has emerged in the energy world: virtual power plant. No, this isn’t some new simulation game where players get to build and run their own generation site. Virtual power plants (VPPs) are digitally controlled networks of decentralized energy resources. They are able to understand the total energy supply and demand of a building and weigh that against the needs of the local energy grid. Virtual power plants use a cloud-based control platform to forecast, schedule, and dispatch energy to help meet the needs of both the building and the grid. They can also optimize on-site energy use and production based on the time-of-use rate of energy and the current needs of the grid.

If you described a virtual power plant to someone in the property industry, they would probably call it a microgrid. But virtual power plants differ from microgrids in a few important ways. Microgrids are usually created for one fixed location, like a large development or a campus of buildings. One of the defining characteristics of a microgrid is that it can create an “island” that operates off-grid if needed. To do this, microgrids rely on hardware like inverters and switches...   ...more

RSK: This is a welcome outlook on energy management. Not all energy is the same. Energy being produced by individuals and companies from solar and wind and pumped into the overall grid is oftentimes not compatible with the system. VPPs can help manage this problem for industries and power companies alike.