The rising demand for power generation from renewable sources of energy across the globe has propelled the need for increasing usage of virtual power plants. Moreover, there is an essentialconcern for decentralized power generators in the electricity distribution supply chain to reduce the electricity demand. In regions such as North America and Europe, there is huge availability of renewable energy. As a result, the virtual power plant market currently exhibits a stable growth. However, the virtual power plant market in the Asia-Pacific is anticipated to display huge growth prospects supported by an innovative technological advancements in the power industry and increasing demand for electricity. By using virtual power plant for grid optimization, the energy efficiency of the electrical supply chain enhanced. The virtual power plant market is expected to progress at a healthy rate in the future, supported by the gradually growing affinity for consistent power supply from clean energy source.
However, some challenges also prove to be a restraint to the overall growth of the market. Privacy and security risks involved during the operation of virtual power plant play an important role in hindering the adoption of virtual power plants by various small-scale players. Moreover, small- and medium-sized players in the power industry are hesitant in introducing virtual power plant due to the high initial set-up costs associated with the same.
High growth in the market in the coming future is expected to be driven by rising awareness among governments about the need to mitigate power outages while also taking care of the environment. The growing awareness in the market concerning the opportunities in renewable energy and battery storage systems has stimulated large-scale investments in the sector over the last decade. Majority of the investments have been in the field of renewable energy capacity addition, batteries, software, and data analytics. Various established conglomerates, such as Tesla Inc., AutoGrid Systems Inc., Sonnen GmbH, Moixa, and Enbala Power Networks are investing in virtual power plants. For instance, in September 2018, AutoGrid Systems Inc. invested $75 million for the development of Internet of Things (IoT) enabled software catered toward distributed energy resources.
Energy generation from conventional sources adversely affects the environment due to greenhouse gas emission. As a result, there has been increasing demand for energy generation from renewable sources of energy. To control the variability of renewable energy generation sources, the energy storage systems play a crucial role. The energy storage systems include batteries which ensure flexible, reliable and continuous power supply to the grid network, thereby fulfilling the electricity demand of the end users. Moreover, these systems are used to maintain the power quality and continuity of power flow in the grid network to meet the electricity demand.
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The major established players in the market are also focusing on product launches and developments to introduce new technologies or developing further on the existing product portfolio. Key players operating in this market have ramped up their product launch activities over the recent years, in order to generate public awareness about their existing and new products and technologies and compete with the competitors’ product portfolio. For instance, in November 2018, Schneider Electric launched EcoStruxure solutions for the optimization of microgrid.
Strategies such as partnerships and collaborations have also been significantly employed by the players across the supply chain to expand in the virtual power plant market. With the increasing growth in the global market, companies operating in this industry are compelled to come up with collaborative strategies in order to sustain in the intensely competitive market. Various government and private research institutes, and favorable trade policies are putting in substantial efforts to identify the benefits of these advanced grid solutions. Moreover, extensive R&D activities and appropriate regulatory environments are also prerequisites for the sustained growth of this market.
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