Combined power plant
Virtual Power Plant (VPP) is a cloud-based central or distributed control center that takes advantage of information and communication technologies (ICTs) and Internet of things (IoT) devices to aggregate the capacity of heterogeneous Distributed Energy Resources (DERs) including different types of dispatchable and non-dispatchable distributed generation (DG) units (e.g., CHPs, natural gas-fired reciprocating engines, small-scale wind power plants (WPPs), photovoltaics (PVs), run-of-river hydroelectricity plants, biomass, etc.), energy storage systems (ESS), and controllable or flexible loads (CL or FL) and form a coalition of heterogeneous DERs for the purpose of energy trading in the wholesale electricity markets and/or providing ancillary services for system operators on behalf of non-eligible individual DERs.
In another definition, VPP is a system that integrates several types of power sources, (such as microCHP, wind turbines, small hydro, photovoltaics, back-up gensets, and batteries) so as to give a reliable overall power supply. The sources are often a cluster of distributed generation systems, and are often orchestrated by a central authority.
The new paradigm of power system operation allows a multitude of DERs, including distributed generators, flexible/controllable loads, and energy storage facilities, to be coordinated under the umbrella of Virtual Power Plants (VPPs). A VPP acts as an intermediary between DERs and the wholesale market and trades energy on behalf of DER owners who are not able to participate in the electricity market alone. In fact, the VPP aggregates the capacity of DGs, ESSs, and FLs to form a coalition of heterogeneous technologies in the hope of trading in the wholesale electricity market. The VPP behaves as a conventional dispatchable power plant in the viewpoint of other market participants, although it is indeed a cluster of many diverse DERs. Also, in the competitive electricity markets, a virtual power plant acts as an arbitrageur by exercising arbitrage between diverse energy trading floors (i.e., bilateral and PPA contracts, forward and futures markets, and the pool).
...
Wikipedia