The utility world has changed drastically in the last 10 years. New technologies like Smart Meters and fully functional Smart Grid concepts have made large inroads into the utility space and no one should want to be left behind. Utilities also face additional pressures from regulatory parties who are continuing to encourage carbon reduction and greater customer flexibility. The utility needs to balance these new requirements with the financial obligations of providing reliable power while attempting to meet shareholder expectations. Each of these goals are not necessarily complimentary, thus utilities need to determine how to address each one.
Some of the ways the utility is addressing these concepts are through the rollout of 1) dynamic pricing for reducing peak-load, 2)demand response to shed load during emergency situations or other trying times, 3) large scale distributed generation to reduce usage of fossil burning plants, 4) localized distributed generation or demand response to improve grid balancing or reduce outages, 5) leveraging Independent System Operator (ISO)/wholesale markets where utilities bid customer demand response or distributed energy resources into the market. While each of these present great opportunities, there are also new challenging issues such as how to forecast appropriately the level of customer participation in programs, how to include demand response or distributed energy resources into a utility’s operational portfolio, and how to execute very localized demand response to address grid specific issues. Each of these challenges are complex and while not all opportunities will be addressed by the utility, any combination of each of these will require a solution that can address operational concerns of how much load will be reduced and how does that impact a utility’s procurement/generation of power. How will demand response impact a utility distribution system, and in what ways can a utility aggregate these available customers into something that makes logical sense. One concept to confront these challenges is the Virtual Power Plant.
The VPP concept can overcome the chasm of the financial and physical models for ISOs. As discussed previously, VPPs can allow for the flexibility to define these at whatever topological level desired. This flexibility allows the utility to play in both the physical and financial markets. However, once the utility solidifies an award, it has to be capable of knowing how to select the right customers based on DR program business rules and their availability, a way to perform an appropriate analysis of customer participation; and payout and balance its distribution system based on its participation in the ISO/wholesale market. Therefore, this project will explore the possible financial model for Virtual Power Plant in Taiwan based on the importance of promoting virtual power plant in Taiwan and the promotion strategies conduct in each area by gathering and analyzing the econometric models of the existing virtual power plants around the world.[轉錄自摘要]