Global Virtual Power Plant (VPP) Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Market Overview

of Global Virtual Power Plant (VPP) market:
The latest research study on the global Virtual Power Plant (VPP) market finds that the global Virtual Power Plant (VPP) market reached a value of USD 1127.76 million in 2022. It’s expected that the market will achieve USD 3783.81 million by 2028, exhibiting a CAGR of 22.35% during the forecast period.

A Virtual Power Plant is a pooled set of decentralized units in a power network. Virtual Power Plants are operated by a common, centralized control system. The networked units can be power producers (such as biogas, wind, solar, CHP, or hydro power plants), power consumers, power storage units, and power-to-X plants (power-to-gas, power-to-heat). The Virtual Power Plant’s purpose is to collectively forecast, dispatch, and trade the power and the flexibility of the aggregated assets. Any decentralized unit that produces, consumes, or stores electricity for the power exchanges can be part of a Virtual Power Plant. The cluster of individual assets is operated by a central control system. In addition to operating each individual asset in the Virtual Power Plant, the system uses a special algorithm to adjust to grid conditions and control reserve commands from transmission system operators – just like larger, conventional power plant. When it comes to trading electricity, the Virtual Power Plant can react quickly and efficiently to price signals from the power exchanges and adjust operations accordingly.

The energy transformation in today's world can't be separated from close international cooperation. All countries need to take active external actions, or introduce external funds and technologies, or strengthen joint research and development of technologies and new standards, or open up overseas markets for their own products and engineering services. The COVID-19 epidemic has led to the delay or interruption of all kinds of cooperation, especially hindering some developing countries from striving for investment and assistance. In addition, related international governance activities have also been weakened. Since the global spread of the epidemic, international energy agency, international renewable energy agency and other organizations can only maintain business development through online forums, release research reports and other "non-contact" forms, and it is difficult to promote some activities with strong substantive impact, such as capacity-building for developing countries, promotion of clean energy project financing and assistance in project planning. Therefore, covid-19 makes it difficult to carry out relevant international cooperation.

However, from the current situation, most of the adverse effects caused by the COVID-19 epidemic are temporary, partial and reversible, and have not changed the upgrading trend of global energy transformation. On the contrary, this epidemic has created some rare opportunities that are not within the scope of industrial planning, and promoted the change of energy structure.

During the epidemic period, due to the suspension of a large number of industrial and commercial activities, the electricity consumption of various countries appeared a continuous "Sunday mode", that is, the electricity consumption of small-scale residents was the mainstay, and the electricity consumption of the whole society generally dropped by more than 20%. In the case of oversupply of electricity, grid operators naturally turn to the cheapest energy type.

Market Drivers
The transition to low-carbon and environment-friendly energy is a hot spot all over the world. Therefore, the structure of electric power industry has also changed from centralized and unidirectional energy supply to distributed energy (DER) such as small-scale renewable energy and ESS. In order to manage the expanding renewable energy and distributed energy resources in a unified way, it is necessary to build VPP. VPP integrates small-scale new renewable energy power generation equipment and distributed energy such as ESS with cloud computing basic software, and manages it like a power station. Although it is not a physical power station, it has the same effect. Types of VPP can be divided into demand VPP, supply VPP and hybrid VPP based on the composition of resources.
In the process of collecting and analyzing dispersed energy, VPP predicts the variables of power demand and supply in advance, so as to realize effective power supply. Because it can remotely integrate various scattered resources and operate in an optimized mode, it can minimize the environmental impact of new renewable energy.
It is expected that through digital conversion technology, environmental factors that may affect the development of new renewable energy, such as weather, can be solved. Environmental factors are expected to be one of the main reasons for the rapid growth of VPP market.

Market Development Constraints
VPP integrates various elements such as physics, information and value, and realizes value increment on the basis of element reorganization. Physical system is the foundation of VPP operation, value system is the driving force of VPP operation, and information system is the medium and core connecting physics and value. Before the construction of the Internet, the development and application of VPP were limited to a certain extent by factors such as large granularity of data of energy-consuming terminals and limited information channels.
Due to the limitation of users' own load characteristics and its adjustability, there are inevitable deviations of individual VPP operators in the direct electricity trading and auxiliary service market.
In order to cope with the risk of deviation, it is necessary to further enhance the flexibility of the system through the joint operation of VPP and energy storage. The key to realize the joint operation lies in constructing the benefit distribution mechanism among multi-agents. For VPP operators, by signing cooperation agreements with other operators or energy storage equipment, forming VPP operation alliance will further optimize their own regulation and control capabilities. The benefit increase or cost reduction caused by the improvement of regulation and control ability can be reasonably distributed among all subjects. In this process, except the VPP operation entities, other entities bear the responsibility of standby and risk sharing, and at the same time get the corresponding standby income and risk compensation.

Region Overview:
Geographically, Europe held the largest market share – 51.23% in 2022.

Company Overview:
Statkraft is one of the major players operating in the Virtual Power Plant (VPP) market, holding a share of 25.96% in 2023.

Statkraft
Statkraft is a leading company in hydropower internationally and Europe’s largest generator of renewable energy. The Group produces hydropower, wind power, solar power, gas-fired power and supplies district heating. Statkraft is a global company in energy market operations.

Next Kraftwerke
Next Kraftwerke operates virtual power plants. The Company provides bio-energy, solar, wind, and combined heat, and power generation facilities.
Next Kraftwerke’s VPP interconnects different types of renewables and flexible power consumers so that each unit supports the other.

Segmentation Overview:
As for product types, the FM Model segment held the largest market share in 2022.

OC Model
Operational Control (OC) model focuses on direct operational control of single assets. The goal here is to simply control and manage assets.

FM Model
Functional Management (FM) model focuses on the management and aggregation of distributed energy sources. The goal here is to optimize the few connected assets while taking into consideration other factors such as cost, heat generation, and energy market prices.

Application Overview:
The market's largest segment by application is the segment Commercial, with a market share of 40.7% in 2022.

The report covers a research time span from 2018 to 2029; combines extensive quantitative analysis and exhaustive qualitative analysis; presents not only an overview of the global Virtual Power Plant (VPP) market in metrics of sales, revenue, growth rate, but also a deeper dive into the segmented market by region, product type and downstream industry, showing the readers a clear and distinct picture of how the market is distributed from different perspectives.

For competitive landscape, prominent players with considerable market shares are comprehensively analyzed in this report. With information regarding the concentration ratio and detailed data reflecting the market performance of each player shared, the readers can acquire a holistic view of the competitive situation and a better understanding of their competitors.

As the COVID-19 takes over the world, we are continuously tracking the changes in the markets. We analyzed the impact of the pandemic in detail, along with other key factors, such as macro-economy, regional conflicts, industry related news and policies. Meanwhile, market investment scenario, technology status and developments, supply chain challenges, among other essential research elements are all covered.

Research Scope
This report provides an overview of the global Virtual Power Plant (VPP) market and analyzes the segmented market by product type, downstream industry, and region, presenting data points such as sales, revenue, growth rate, explaining the current status and future trends of the Virtual Power Plant (VPP) and its sub-markets in an intuitive way.

Key Companies in the global Virtual Power Plant (VPP) market covered in Chapter 3:
Shell
Generac
Sunverge Energy
Enel
Siemens
Bosch
Ormat Technologies
Schneider Electric(AutoGrid)
Statkraft
Next Kraftwerke

In Chapter 4 and Chapter 14.2, on the basis of types, the Virtual Power Plant (VPP) market from 2018 to 2029 is primarily split into:
OC Model
FM Model

In Chapter 5 and Chapter 14.3, on the basis of Downstream Industry, the Virtual Power Plant (VPP) market from 2018 to 2029 covers:
Commercial
Industrial
Residential

Geographically, the detailed analysis of consumption, revenue, market share and growth rate, historic and forecast (2018-2029) of the following regions are covered in Chapter 8 to Chapter 14:
North America (United States, Canada)

Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands, Turkey, Switzerland, Sweden)

Asia Pacific (China, Japan, South Korea, Australia, India, Indonesia, Philippines, Malaysia)

Latin America (Brazil, Mexico, Argentina)

Middle East & Africa (Saudi Arabia, UAE, Egypt, South Africa)

Key Factors Considered

COVID-19
Amid the COVID-19 crisis, the Virtual Power Plant (VPP) market has definitely taken a hit. The report describes the market scenario during and post the pandemic in the vision of upstream raw materials, major market participants, downstream major customers, etc. Other aspects, such as changes in consumer behavior, demand, transport capacity, trade flow under COVID-19, have also been taken into consideration during the process of the research.

Regional Conflict / Russia-Ukraine War
The report also presents the impact of regional conflict on this market in an effort to aid the readers to understand how the market has been adversely influenced and how it’s going to evolve in the years to come.

Challenges & Opportunities
Factors that may help create opportunities and boost profits for market players, as well as challenges that may restrain or even pose a threat to the development of the players, are revealed in the report, which can shed a light on strategic decisions and implementation.

Chapter Outline

Chapter 1 starts the report with a brief overview of the research scope, as well as the definitions of the target market and the subdivisions.

Chapter 2 integrates and sketches the research findings and conclusions in a clear and explicit way.

Chapter 3 presents the competitive landscape by displaying the sales, revenue, and market shares of the top players. It also profiles the major market participants with their business introductions, sales, price, revenue, gross, growth rates, etc.

Chapter 4 breaks down the market by different product types and shares data correspondingly with the aim of helping the readers know how the market is distributed by type.

Chapter 5 segments the market by downstream industry, with data covers sales, revenue, and growth rate tracing back to 2018.

Chapter 6 is the analysis of the whole market industrial chain, ranging from upstream raw materials to downstream customers, with regional conflicts taken into consideration.

Chapter 7 elaborates on market dynamics. Factors that drive, challenge, or restrain the market are all listed, together with industry news, opportunities, impacts of COVID-19, and SWOT analysis.

Chapter 8 shows the breakdown data at the regional level, which enables the readers to picture the regional competitive pattern of the market and learn about the revenue, sales, and market share of all the major regions.

Chapter 9-13 focus on each and every of the major region, specifically, North America, Europe, Asia Pacific, Latin America, Middle East & Africa. Sales, price, revenue, gross, gross margin, among others, will be all be presented.

Chapter 14 forecasts the future trend of the market not only as a whole but also from the perspective of all segments.

Years considered for this report:

Historical Years:

2018-2022

Base Year:

2022

Estimated Year:

2023

Forecast Period:

2023-2029