Clean Energy Virtual Power Plant
Energy efficiency is technology-based (unlike conservation, which is rooted in behavior). Consequently, energy savings that result from energy-efficient equipment and measures can be predicted reliably, are quantifiable and measurable, are sustained over time, and may be aggregated. The more energy efficiency in an electricity provider's service area, the less electricity that needs to be generated, transmitted, distributed, and stored. In this sense, energy efficiency may be viewed as an energy "resource" — a demand-side resource, as it comes from the customer's (demand) side of the meter. Examples of energy efficiency technologies include compact fluorescent light bulbs (CFLs) and high efficiency air conditioners, boilers, chillers and refrigerators.
Energy efficiency measures may be bundled with customer-sited renewable energy technologies like photovoltaics (PV) and small wind. These technologies produce measurable amounts of electricity. Consequently, their contribution to electricity supply may be aggregated over an electricity provider's service area, just as energy efficiency measures are. Although the solar and wind resources are intermittent, they are quite predictable. Predictability enables the electricity provider to plan for and incorporate these resources in its generating portfolio.
Customer-sited energy efficiency and renewable energy technologies together can offset or generate sufficient electricity that, in the aggregate, they amount to a virtual power plant. Studies indicate that investments in energy efficiency are significantly less expensive than new power plant construction. Other research indicates that, because energy efficiency tends to be labor intensive, it creates more local jobs than conventional central station power plants — jobs that are sustained over time. This results in additional dollars injected into local or state economies. When those dollars are spent, a multiplier effect is created that benefits the local economy.
In Austin, Texas, the local utility used this principle to construct a virtual power plant built exclusively of energy efficiency materials. These materials included enforced energy efficiency building codes and rebates for high efficiency appliances, among other programs and policies. Over about 12 years, documented energy savings accumulated until they totaled 550 megawatts. During this period Austin's population doubled and the local economy grew by 46%. The energy efficiency power plant avoided the need to generate 550 megawatts of electricity and enabled Austin to take a coal-fired power plant off the utility's planning books.
Arguments for a Clean Energy Virtual Power Plant
Cheaper than new power plant construction.
Emissions free.
Creates local jobs.
Local jobs pay salaries that are spent locally, creating an economic multiplier effect.
Arguments against a Clean Energy Virtual Power Plant
Energy efficiency is a self-limiting concept, capped by the amount of energy consumed.
Solar and wind are intermittent resources. Consequently, incorporating too much of them in a utility's generating portfolio might pose a risk to the reliability of the electricity supply.
Customer-sited energy alternatives pose integration and control issues for electricity providers.