Distributed power generation
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Mixed-asset virtual power plant (VPP) capacity will experience a 33% compound annual growth rate from 2020-2029, according to a new study released by Guidehouse Insights.

The mixed-asset VPP cumulative capacity is expected to grow from 2.8GW in 2020 to nearly 36.9GW by 2029.

Market drivers include policy initiatives, increased DER penetration, and falling energy storage prices.

Policies including the Federal Energy Regulatory Commission Oder 841, and Europe’s COVID-19 stimulus packages and the Green Deal are increasing VPP power capacity deployment.

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Partnerships, strategic investments, and acquisitions are also promoting growth, while system costs, utility investment cycles, and solution ambiguity and overlap continue to be barriers to further development.

Efforts by utilities to deploy VPPs to achieve the greatest possible profit from distributed energy resources, while maintaining the proper balance of the electricity grid at the lowest possible economic and environmental cost, is increasing.

Jessie Mehrhoff, research analyst with Guidehouse Insights, said: “Mixed-asset VPP capacity makes up 51% of capacity market share in 2020 and is forecast to scale to 83% of VPP capacity share by 2029.

“Flexible capacity aggregation is evolving from siloed aggregation of automated demand response load and renewable generation resources toward broader ecosystem orchestration, thus favoring the mixed-asset VPP model.”

Read more about the report.