Virtual power plants (VPPs) have been tested and are being proven in South Africa, and their widespread use could reduce the need to build some new transmission and distribution infrastructure while ensuring that the network is stable and reliable.

These plants could defer some grid capital expenditure by providing energy services in a localised area, thereby reducing congestion on the grid, climate and energy strategy advisory firm Meridian Economics climate, policy and energy analyst Nic van Doesburgh has said.

During an 'Exploring VPP Solutions for South Africa's Energy Future' webinar, on July 8, hosted by energy consulting firm EE Business Intelligence, he provided an overview of VPPs.

VPPs are service platforms that provide flexibility to electricity grids by coordinating distributed energy sources and storage, and flexible demand sources.

Services VPPs could provide include demand-response, shifting flexible demand, exporting energy to the grid and rapid-frequency responses to provide system stability, he said.

He added that Meridian Economics and global VPP nonprofit Integrate to Zero were working on developing a VPP roadmap for South Africa, which should be published by the end of the year.

Meanwhile, Europe has mandated that all electricity system operators establish flexible solutions or markets for these services, said Norwegian electricity flexibility technology company NODES chief commercial and technology officer Svein Jørgen Sønning.

Europe, like all regions, was trying to figure out solutions for increasing volatility from renewable sources, while also battling with grid congestion to deploy more generation, not only in transmission but also in the distribution grid, he said.

The mandate for flexible systems was intended to reduce the estimated €584-billion investment needed by 2030 in Europe's grid, and mainly in the distribution grid.

The scale of this anticipated investment meant there was a need to find technologies, tools and processes to make flexibility available to distributors as an alternative to investing in grid infrastructure.

The use of VPP or flexibility solutions could significantly reduce the required investment in the grid in Europe to about half the current estimation, he said.

NODES started in 2016 with a substation that overloaded only in certain hours of the winter months. The utility reached out to customers, particularly those with commercial and industrial assets. Through collaboration and having reached the numbers needed, additional investment was deferred, said Jørgen Sønning.

LOCALLY PROVEN
Meanwhile, smart energy solutions company Plentify CEO Jon Kornik said the company had proven the effectiveness of VPPs in South Africa, and was now aiming to demonstrate how it could be done on a national scale.

The company uses Internet of Things (IoT) bots to communicate with Internet-connected geysers and solar inverters through an application programming interface.

The company proved the effectiveness of a microgrid VPP in partnership with JSE-listed residential property developer Balwin.

Balwin has lots of solar PV capacity that generates power during the day and not when residents most want power, nor does it generate when power is the most expensive, said Kornik.

“The [IoT] Hotbots deployed to the geysers created a wireless mesh that enabled us to shift demand and crowd-in demand when solar was available. The result was that more solar could be feasibly installed because it was better used and there was still hot water for residents.

“The programme demonstrated that the utility and the customers win, and was a proof of the effectiveness of a residential microgrid,” he said.

Balwin reduced peak energy use by 47% and realised a 36% demand reduction in maximum demand. This project also saw a reduction in costs of about R1 800 per geyser per year, with an internal rate of return of about 67% over the project life.

Residents also saw a R1 200 reduction in their yearly electricity bills while having hot water available.

“The technology works, the customer experience is solid and the economics works at a multi-household level.”

Further, Plentify participated in a Smart Geyser project in Cape Town that aimed to demonstrate that the effect could scale across a national grid.

An independent verification and measurement company measured and verified the impact of the project, which saw 500 Hotbots deployed in Cape Town and surrounds over a period of three years.

The results showed that, if orchestrated correctly, an 80% reduction in peak time of use could be achieved without compromising on hot water to citizens.

The reserve capacity was left in place to provide power for water heating, if needed, as tests showed that turning off all hot water heating during peak times would result in 15% of residents not having hot water when they needed it, he added.

“The aim was to add value; not penalise residents that are participating.”

He explained that the aim was to shift the load to use solar power for water heating when possible, and to shape the load to match the solar power generation profile.

“We did this and doubled the solar capacity consumed by geysers. This indicates that peak-time load reduction and solar load in a building can be compatible,” said Kornik.

The Smart Geyser project coordinated geysers to ensure their aggregate demand did not exceed a specific limit. The project was successful in reducing maximum demand by about 60% over an eight-month period, and significantly flattened out the demand curve for the connected geysers.

“This is valuable for infrastructure development when you have certainty of the load that needs to be pushed through the infrastructure,” he said.

The project was also completed in 2023 at the height of loadshedding, and the coordination of the geysers' load meant that there were also no comeback spikes. This meant that it was possible to reduce maximum demand, and that such geyser VPPs could be used to cater for emergency events on the grid and damaging load spikes, he said.

The utility saw an 18% to 27% efficiency improvement and citizens benefited from a R300 reduction in their monthly electricity bills.

“The results showed that, if such VPP and microgrid systems were deployed, it would double the throughput of existing distribution infrastructure. We could double the amount of solar we have built, now that we have proven demand from geysers to support the economics,” Kornik said.

Meanwhile, Plentify was starting with its next project: Smart Solar with the eThekwini municipality, in KwaZulu-Natal, which would see about 280 homes and businesses in the Durban area participate.

However, this project would involve multiple appliances, including geysers, solar PV and battery energy storage systems, among others.

The project aimed to demonstrate the effectiveness of microgrid and VPPs systems for households and the utility, as well as the potential provision of services from such VPPs, peak-time load reduction and, if the area has time-of-use tariff structures, it would aim to see more solar power used and thereby lower the demand on the grid.

This also meant that the loss-making peak-energy time for the utility could be shifted to times when solar power was abundant, and thereby help the utility avoid selling power during loss-making times.

Multiple appliances would magnify the impact of VPPs, as they would provide more flexibility as there would be more diversity of demand that could be orchestrates, and would increase the value of such systems for homes and utilities.

Meanwhile, inverter and energy systems manufacturer Deye Technology has announced Plentify as its VPP partner in South Africa. This would aggregate and orchestrate the roughly 2.7 GWh of Deye batteries deployed in South Africa.

“This is twice the capacity of [State-owned] Eskom's battery energy storage system project, which is expected to cost R11-billion and take four years,” he pointed out.

The aim of this partnership was to reward prosumers - electricity consumers that also dispatched surplus power to the grid - for using the assets in their homes, and prove that VPPs could provide significant benefits to the energy system and prosumers, said Kornik.

Prosumers would see no deterioration in their energy resilience, would earn a healthy fee and could offset time-of-use tariffs to lower their bills.

At utility scale or as a node in a network, such a system could provide ultrarapid and flexible demand response services, while an ancillary grid service could be used to store wheeled energy, if the system could be deployed down to the low-voltage level, he noted.

“We have done this work for almost ten years, and the age of the residential VPP has arrived. It has been proven to scale, and our work provides strong evidence that single-appliance migrogrids can work and that this could scale across the grid.

“With a base of millions of geysers and hundreds of thousands of solar installations, such a solution presents the largest untapped flexible resource in South Africa.

“The barrier is policy. We have the technology and the assets; we now need policy to monetise this. Several policy pathways are available.

“For example, Eskom's demand-response programme can be extended from only geysers to batteries. Activating virtual wheeling across low-voltage networks and aggregating demand response for such companies to participate in the South African Wholesale Electricity Market.

“We welcome partners to build large residential VPPs to drive policy change,” Kornik said.