How our Virtual Power Plant works

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Next Box

The Next Box is our self-developed remote-control unit, which is used to connect each asset to our control system. It fulfills all TSO technological and safety requirements for participation on grid frequency control markets (Transmission Code).

The Next Box is the link to the Next Pool. It allows us to connect thousands of decentralized electricity producers and consumers to our central system, and control them from there. But that’s only part of the benefit: with the Next Box, plants are also always able to send us, in real-time, the exact data we need to sell the electricity on the markets, with the precision of a quarter of an hour.

Technical properties of the Next Box

  1. The connection works in both directions
    • The Next Box sends information on the operation of the remote unit to the control system
    • Through the Next Box, the control system can power up or power down the units
  2. Data communication takes place over a GPRS connection, which is established using a SIM card
    • The data is encrypted directly in the Next Box
    • The SIM cards in the modem must be authenticated so that they can join the closed user group and can send user data to our control system. The authentication is conducted by our control system
    • Our Sim cards don't have a connection to the internet making the data transmission even more secure.
    • Once it is in our control system, the data is decrypted
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Flexible Power Producers

Examples of flexible power producers include biogas plants, hydro power, or CHP plants. The common trait among them is they can adjust their power production and are not impacted by external factors such as the weather, which is the case with wind or solar power plants.

With the ability to control power production, flexible power producers can provide grid frequency control measures. This means production can be adjusted (ramped up or down) based on the needs of the TSOs. Flexible power producers can also be used for peak load operation, producing power when prices are high and reducing production when prices are low. With our control system, we can calculate an individual optimized schedule for each plant to offer maximum profitability for each asset.

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Volatile power producers

Wind or solar power plants are examples of volatile power producers. Their power production depends on weather conditions, and they can therefore not adjust production as they please. However, they can be shut down if prices on the power exchanges dip too far into the negative.

The amount of power fed into the grid by solar and wind plants cannot be forecasted with complete accuracy. But as the point of delivery comes closer, the forecasting gets better. This is especially true in direct marketing, where the quality of forecasting has increased due to improved accuracy.

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Power Exchange

We sell power from all aggregated distributed power plants on various markets . We also purchase power on these markets on behalf of our power-consuming customers. The most important marketplaces are:

    • Intraday-market (auction and continuous) – for example the EPEX SPOTT
    • Day ahead markets for example the European Energy Exchange in Paris (EPEX SPOT) or the Energy Exchange Austria in Vienna (EXAA)
    • The Power Futures market such as the European Energy Exchange in Leipzig (EEX)

These markets are distinguished by different terms and product periods. Long-term contracts are signed on the power futures market, while power for the following day is traded on the day-ahead market. On the intraday market, power for the current day (up until 30 minutes before delivery) is traded.


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Gensets

Gensets also known as generators, supply power to properties in case of a grid failure. These gensets are often used in hospitals, industry complexes, or administration buildings. In Germany, the grid is highly reliable, and gensets are rarely used. Still, around 9,000 gensets are installed around the country. Normally, gensets need to switch on instantly in the event of a grid failure. This makes them perfect for providing positive grid frequency control: In case of a lack of power in the grid, a genset can immediately provide power and grid stabilization.

In practice, the process works like this: during a grid failure, the genset kicks in and provides power to the connected property, such as a hospital. This means the hospital doesn’t need to receive power from the grid, reducing the demand for power. The imbalance on the grid is thereby reduced. From this perspective, providing grid frequency control with a genset is a form of demand response – a flexible adjustment on the demand side.

While gensets are usually diesel-powered, using them as a grid stabilizing measure is justifiable from a sustainability perspective. Operation for grid frequency control can be considered test runs for the units, which would be required anyway. This means that annual operating time does not necessarily increase when gensets are used for grid frequency control. Furthermore, by using assets that are already available, no new plants need to be built, and operation at conventional power plants can be reduced.

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Power-to-Heat

From a grid perspective, Power to heat plants (PtH) – essentially large-scale electric heaters – work in the opposite way as a genset: They transform excess power from the grid into heat.

Since power is a more expensive energy source than heat, PtH plants are usually found near industrial areas and facilities to provide heat in case power prices are low, or even negative. Power to heat plants are ideal assets for peak load operation if they are connected to a power exchange. They can also provide negative grid frequency control when there is an excess of power in the grid thanks to their ability to turn power into heat.

An alternative use concept for power to heat plants is placing them between a power producer (such as a CHP plant) and the feed-in point to the public grid. This ensures that only the excess power from the producing unit is used to create heat, rather than relying on power from the grid.

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Grid frequency control

Grid frequency control is used to stabilize the power grid and prevent blackouts. A power grid needs to run at a certain frequency (in Europe this frequency is 50 Hz) to run reliably. Fluctuations occur when power supply and demand are not aligned. Aggregated in a Virtual Power Plant distributed assets can play a vital role virtual in stabilizing the power grid. A Virtual Power Plant can be seen as a kind of a power reserve that can be activated if needed. In the European energy market this activation is usually handled by the transmission system operator (TSO), when the grid frequency drastically deviates from the needed 50 Hz. 

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Interface partners

A protocol interface is used to remotely control power producing or consuming units. The protocol interface collects information about each individual asset, such as availability or current production, and transmits this information over the internet to our control system. The protocol interface can also access power units and reduce or increase their consumption or production.

On the left, you can see the manufacturers with whom we have already partnered to integrate power producing and consuming assets into our Virtual Power Plant. We frequently expand our support to include new manufacturers. Please contact us if you would like to use a new control interface that is not yet listed.

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Power consumers

Historically, power consumers were passive participants on the power market. Consumers usually signed long-term contracts for power delivery and consumed as much power as they needed to operate industry assets, a business, or a private home. Power consumption was seen as a static process.

Today, the situation is different: consumption is adjusted to supply. During certain periods, and depending on power supply and power prices, power consumers may use more or less power than originally planned. This flexible adjustment is called demand response.

If power consuming units are connected to a power exchange, they can also align their consumption with the prices on the intraday market using our Best of 96 rate: When exchange prices are high, power consumption is reduced. When prices drop, consumption catches up. This helps stabilize the grid in addition to reducing power consumption costs.

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Our Control system

The control system is the technological core of the Virtual Power Plant, and it is administered exclusively by our own system engineers. The control system receives all information relating to the units and the power grid from Next Boxes using machine-to-machine communication (M2M) and feeds it to our Virtual Power Plant. When the information arrives at the control system, the data is re-authenticated by a firewalled router cluster, decrypted, and stored in the correct place in our database.

With this data, we always know how much power is available within the Next Pool and how much power we can provide for grid frequency control. During a grid frequency control call, our algorithms control which assets reduce or increase production or consumption and by how much – all at any given second . The optimized production or consumption is immediately sent out over our communication interface to each asset that needs to adjust its operation.

But use of the control system extends beyond grid frequency control. The control system also plays a major role in controlling power producers and consumers based on prices on the power exchanges. Depending on the prices on the day-ahead and intraday markets, the control system decides how individual assets – such as biogas plants or hydro pumps – should operate. Optimization algorithms continuously choose the best schedule for each asset in the Next Pool. Power producers only produce as much power as the grid actually needs, while flexible power consumers use this mechanism to only consume power when it costs the least. This allows our control system to help stabilize the grid against fluctuations before frequency control is even needed.

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Next Box Modem

The modem is needed to establish a connection between an asset (such as a biogas unit or an industrial pump) and the control system. Using the modem, data from the Next Box can be transmitted to our control system via a closed user group. A built-in SIM card is used to identify each asset to the user group, and the Next Box can exchange data with the control system following authentication.

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Next Box antenna

The antenna enhances the range of the receiver in the Next Box. If the Next is Box installed in a place with poor reception, such as a machine room, the antenna can be set up in another location with better reception – on the roof, for example.

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Next Box control unit

Each Next Box houses a small storage-programmable-logic controller. This unit is essentially a small computer that processes and encrypts the raw operation data of the asset. It continuously checks how the asset is running and transmits this data to the control system. Based on this data, the control system calculates the running schedules for the power producers and consumers.

The data consists of:

Availability of the asset

Current feed-in

The asset’s contribution to grid frequency control

Amount of gas or heat storage

Current temperature (example: a cold storage unit)

Water level (example: an industrial pump)


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Biogas

Biogas is created by fermenting biomass. Liquid manure, energy plants such as corn, biological waste, or a mixture of all of the above are used as substrates. When the substrate no longer yields any gas, the biological matter that remains is used as high-quality fertilizer that has a less potent odor than manure and is a better source of nutrients for plants.

A biogas plant is usually connected to a CHP unit with a generator. The power and heat produced in this setup is often used locally. Producing power with a biogas plant is very efficient, especially for local heat customers.

Another advantage of biogas plants compared to volatile power producers is the long shelf life of their prime energy source, as biogas can be stored for some time in tanks. This means biogas power production can be reduced during periods where wind and solar production are high. It is as simple as shutting down the CHP; the fermentation process continues and the resulting biogas will be stored in the gas tanks. Installing additional gas tanks increases the biogas storage capacity and extends the period of suspended power production, making biogas an exceptionally flexible power producer that offers a valuable contribution to a successful energy transition. 


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Hydro power

A hydro power plant is installed in a dam or on the banks of a river. In both cases, water runs through a turbine that is connected to a power-producing generator. Of all the sustainable energy sources, hydro power can be considered the most conventional: water has been used for centuries to power machinery such as mills.

Run-of-river power stations generally have a lower margin of flexibility compared to reservoir power stations, which run off water stored behind a dam. Nevertheless, run-of-river power stations can still provide flexibility that can be used for grid frequency control measures. This flexibility can be utilized to a higher degree if the plant is connected to other units in a Virtual Power Plant. They can be used to produce power in relation to the prices at the power exchange or to provide grid frequency control.


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CHP

CHP assets are mostly operated alongside biogas or regular gas plants. In a CHP, gas is turned into power using a generator. The resulting heat can warm up another medium (such as water), which is used as a local heat source in municipal buildings or industrial compounds. This setup can reach efficiency rates of 90 percent when the proximity to the CHP unit is close.

A CHP plant can be primarily utilized to generate heat or power. Usually power-producing CHP assets are more flexible for the power grid than heat-producing CHP assets. Heat-based CHPs usually have a fixed amount of heat to produce and can therefore only adjust production to a certain degree. However, even this degree of flexibility can be utilized on the power exchanges, as heat is an inert medium. 

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Power Plants

Most power plants generate power in a similar manner to a steam engine: burning a primary energy source causes water to heat up, and the resulting steam drives a turbine to generate the power. In an ideal scenario, both the resulting heat and the resulting power can be put to use for maximum efficiency.

The sustainable energy sector sees a particularly wide range of primary energy sources used to generate power. Often these are gas sources, but energy sources also come in other forms, such as wooden pellets.

Examples of sustainable and conventional power plants include:

Gas plants

Sewage gas plants

Methane-based plants

Landfill-based gas plants

Waste-fueled plants

Biomass plants (wood)

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Wind

Power production from wind parks depends on external factors, such as the force of the wind, and can therefore not be adjusted to the demand of the grid. However, wind power assets can be shut down completely during periods of significantly low prices or when there is excess power in the grid; distribution grid operators use this measure frequently to reduce the feed-in. Today, most TSOs do not use wind energy for grid frequency control.

It is complicated to provide reliable, long-term forecasts of how much power will be fed-in from wind parks. The forecasting becomes more accurate as the moment of delivery approaches. In recent years, quality of forecasting has improved significantly.

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Solar

Power production from solar, or photovoltaic, units depends on insolation and therefore cannot be entirely adjusted to the demands of the grid. However, wind power assets can be shut down completely during periods of significantly low prices or when there is excess power in the grid; distribution grid operators use this measure frequently to reduce the feed-in. Today, solar power is not used for grid frequency control. The power from solar parks can be traded at power exchanges via Virtual Power Plants.

Solar power units have the advantage that their feed-in profile is very similar to the demand profile. It ramps up in the morning, reaches its peak at noon, and ramps down in the evening. It is therefore more likely that solar power is produced at a given moment when power is actually needed. 

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Our servers

The servers are an important part of our control system because they store all the information we need to provide optimized schedules for our power producers and consumers in the Virtual Power Plant. The data is sent to the servers via an encrypted connection either through the Next Box or a protocol interface. Once the data is received by the server cluster (behind a secure firewall), the data is authenticated, decrypted, and stored in the corresponding location in the server structure.

The information we collect and store includes:

Availability of the asset

Current feed-in

The asset’s contribution to grid frequency control

Amount of gas or heat storage

Current temperature (example: a cold storage unit)

Water level (example: an industrial pump)

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Our optimization algorithms

Our optimization algorithms are a part of our control system. They were developed by our system engineers together with our cooperation partners to calculate optimum schedules for our power consumers and producers.

Based on the data transmitted to our servers with the Next Box, we know exactly how much power is available in the pool and how much power we can offer to grid frequency control auctions. It is important to get these figures right: the amount of power we agree to provide needs to be available in the Next Pool at any time to avoid jeopardizing the stability of the grid.

During a grid frequency call, our system continuously optimizes its own performance: The control system validates all data from each individual asset, checking availability and power capacity. These numbers are simultaneously verified against the desired values from the TSOs. Finally, the control system sends out the desired order to the individual assets, with our algorithms calculating the assets that need to increase or decrease production every second.