Virtual power plants are employed to optimize power generation from existing sources, integrate various renewable energy sources, and, ultimately, reduce the carbon footprint on the environment. Any growth in the smart grid would directly impact the market of virtual power plant.

The global virtual power plant market is projected to grow at a CAGR of 29.68% from 2016 to 2021. North America is estimated to be the largest market for virtual power plants, followed by Europe in 2016. This trend is expected to continue till 2021. The growth of the virtual power plant market is driven by increasing share of renewable energy in the power generation mix as well as shift from centralized to distributed generation and lowering costs for solar and energy storage.

The virtual power plant market is dominated by a few key demand response aggregators such as EnerNOC, Inc. (U.S.), Comverge, Inc. (U.S.), Flexitricity (U.K.), Limejump Ltd. (U.K.), among others. Also, there are few market giants in the virtual power plant market which includes, ABB Ltd. (Switzerland), General Electric Company (U.S.), Schneider Electric SE (France), and Siemens AG (Germany), among others.

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Virtual Power Plant is a combination of various distributed electricity generation entities which are controlled and operated by a central unit using integrated software systems. This technology has the capability to stretch supplies from existing power generation sources (both renewable and nonrenewable energy sources) as well as through utility demand reduction programs. Virtual power plant solutions can be associated with various concepts such as smart grid, microgrid, distributed generation, demand response, and advanced energy storage, among others.

The North American region holds the largest market for virtual power plant solutions, driven by rapidly growing use of renewables in order to reduce carbon footprint, shift from centralized to distribution generation and decline in costs of solar PV and battery energy storage would propel the market growth. The other major drivers include increasing power demand, and strict government regulations on energy efficiency.

The Asia-Pacific market is projected to grow at the highest CAGR from 2016 to 2021. The region is the largest market for the infrastructure sector and industrial sector and is taking various steps to reduce carbon footprint and produce clean energy which includes renewable energy such as hydro energy, wind energy and solar energy generation.

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Major Market Developments
• In October 2016, ABB, Ltd. (Switzerland) launched a micro grid solution in order to address the demand for flexible technology for distributed generation. This would help maximize the use of renewable energy sources while reducing dependency on fossil fuels used by generator sets.
• In May 2016, Cpower (U.S.) acquired Johnson Controls’ (France) Integrated Demand Resources (iDR) business. The purchase is a part of CPower’s ongoing efforts to expand its demand response portfolio nationwide. For Johnson Controls, the transaction is a part of a continuing strategy to invest in its building management technologies designed to deliver energy and operational efficiency to its customers.
• In August 2016, Enbala Power Networks (Canada) and Encycle, Corp. (Canada) announced a partnership to integrate the Symphony by Enbala’s distributed energy resource management platform with Encycle’s Swarm Energy Management solution for demand response and demand management. This partnership would help the Commercial and Industrial (C&I) customers in lowering their energy usage and costs, enabling utilities to easily achieve their grid balancing and energy efficiency goals.

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