The specific focus of this Article is on the "virtual power plant" (VPP) concept, an intriguing idea that involves an aggregation of DERs to provide a "fleet" of resources that can serve as the functional equivalent of a traditional power plant. As the name suggests, this fleet of DERs can add up in the aggregate to the equivalent of a significant resource. Under certain conditions, this resource can be used on the grid (i.e., dispatched) much as a conventional power plant would be. This could reduce demand for fossil fuel-fired plants by enabling a utility to avoid generating electricity or purchasing it in wholesale markets. Increased availability of DR can also help with the integration of DG into the grid. If it is predictable and controllable, it can be called upon by a utility or wholesale market to facilitate DG integration by smoothing out the peaks and valleys of demand for electricity, counterbalancing the inherent variability of DG sources such as solar and wind. Research and early pilot projects are testing the VPP concept, and several utilities are embarking on plans to deploy VPPs more broadly. This Article describes one such deployment, the VPP project underway at the San Antonio, Texas-based utility CPS Energy.26 When complete, the CPS VPP will use the advanced technologies and two-way communications capabilities of the Smart Grid ("smart meters" and associated software and hardware) to link together up to 140,000 homes and provide DR equivalent to the output of a 250 megawatts (MW) power plant. The CPS Energy pilot and others will test the "fleet of resources" concept and may yield valuable information to guide its expansion elsewhere. In Part II, this Article discusses the concept of demand response and its relationship to Smart Grid technologies. Part III discusses the specific challenges of integrating DERs into the grid, focusing on the potential for DR to help integrate the large number of DG sources expected to come on line in the future into the grid, and specifically on the concept of "regulation," or frequency control of the grid. Parts IV and V analyze the VPP concept, with specifics about the CPS Energy program, and a description of challenges facing the expansion of the VPP concept elsewhere.
Joel B. Eisen, Distributed Energy Resources, "Virtual Power Plants," and the Smart Grid, 7 U. Hous. Envtl. & Energy L. & Pol'y J. 191 (2012; invited symposium issue).