SIEMENS

The many hiking trails around the village of Niederense in the state of Westphalia, Germany, offer tranquility, bird songs, the Möhne River and unspoiled nature. As idyllic as this setting is, a small hydroelectric power station built in 1913 does not look out of place here. With an output of 215 kW, the facility is one of the region’s smaller power plants. Yet its Siemens-Halske generators have been tirelessly producing electricity for nearly 100 years. And now these hardworking old-timers have become a key part of a much larger, innovative high-tech plan. Since October 2008 they have been interconnected with eight other hydroelectric plants on the Lister and Lenne Rivers in a rural part of Westphalia known as Sauerland as part of ProViPP, the Professional Virtual Power Plant pilot project of RWE (a power plant operator) and Siemens.
Just about everybody stands to gain from the project — power plant owners, electricity traders, power grid operators, and of course the end customer, who could profit from more intense competition. The virtual power plant concept complements the big utility companies with their large, central power plants by creating new suppliers with small, distributed power systems linked to form virtual pools that can be operated from a central control station. Such a pool can unite wind power, cogeneration, photovoltaic, small hydroelectric, and biogas systems as well as large power consumers such as aluminum smelters and large process water pumps to function as a single supplier. With the Sauerland project Siemens and RWE plan to demonstrate the technological and economic utility of virtual power plants and to expand their knowledge base for further applications. "The project — which will continue until 2010 — and the technology are working so well that we’re going to connect some additional power plants," says Martin Kramer, RWE Project Manager for Distributed Energy Systems.
Externally, the nine small hydroelectric plants in the project function as a single large one. Their total initial output for pilot operation was 8.6 MW. Even though this virtual power plant is not yet actively participating in electric power trading, its constituent plants have established a key prerequisite for new forms of marketing. "Individually, such plants are too small to market their capacities through energy traders on the energy exchange, or as a balancing reserve for load fluctuations to power grid operators," says Kramer. "To market electric power on the energy markets for minute reserves — the power that must be available on demand within 15 minutes — a virtual power plant is required to have a minimum capacity of 15 MW." Today, since the nine-member virtual power plant does not reach that level, it feeds its energy into the grid in accordance with Germany’s Renewable Energy Law (EEG). Following a planned expansion, however, its power will be sold directly in the energy market.

Cool Controls. At the heart of Sauerland’s virtual power plant is Siemens’ Distributed Energy Management System (DEMS). The system displays the present status of systems, generates prognoses and quotations, and controls electric power generation as scheduled. The system overview is subdivided into producers and loads, contracts, and power storage. Conveniently positioned at the center of the display is the "balance node" (the sum of the incoming and outgoing power must equal zero). Additional information is provided on "forecasting and usage planning" and "monitoring and control." As a result, a portfolio manager can view color bar graphs showing which power stations are currently running at peak load or at base load and how much power they are producing.
Using plant status information, such as electric power output, and combining it with market forecasts, DEMS generates a forecast that also takes into account the next day’s prices and the total power available. Even weather data is factored into the energy management system to provide a forecast of the power available from sources with fluctuating availability, such as wind and sunshine.
Before a quotation is placed on the energy market through an energy trader, it is checked and approved by the portfolio manager. Once it has been approved and accepted by the market, DEMS generates an operating schedule for the individual power plants in the virtual plant. The schedule specifies exactly when and how much power must be available from which plant. "DEMS does such a good job of modeling that its schedules can be run exactly the way it defines them," says Dr. Thomas Werner, Product Manager, Power System Management at Siemens Energy. No manual corrections are needed.
Martin Kramer of RWE agrees. "The system is working extremely well. Once a schedule has been generated, the energy management system controls the entire process — including the requirements of the individual power plants — fully automatically."
DEMS was developed by Siemens when it became evident how the electric power grid and the electric power market would be affected by increasing supply from distributed and renewable energies (see Pictures of the Future, Fall 2007, Networked Power).
In the background, communication systems ensure reliable connections between the control center and individual power plants. Siemens communications devices in power stations link the stations with the control center via wireless communication modems. The advantage of this approach is that it requires no costly cables or rented landlines.
The virtual plant is highly distributed. Its DEMS computer is in a control center in Plaidt near Koblenz, the operator stations are in Cologne, and the power plants are in the Sauerland. In spite of this complex mix, no standards exist yet for distributed power plant communications. "Uniform interfaces and protocols have yet to be defined," says Werner, who points out that each virtual plant therefore requires tailored solutions. "We need open standards to substantially simplify the design of virtual power plants," he adds.

Lucrative Reserve Power. Existing business models for virtual power plants already promise attractive profits. As a case in point, power grid operators need to maintain a constant balance in the power grid despite fluctuations in consumption and electric power generation. This is where the virtual power plant’s operator can sell reserve power and make a specific capacity available as a minute reserve. When needed, the purchaser places an order for the agreed-on power for a fee. The seller then starts up or shuts down generators as specified in the contract within the agreed-on timeframe to stabilize the net frequency at 50 or 60 Hz.
Prof. Christoph Weber of Duisburg-Essen University estimates that an energy trader with a virtual power plant can increase earnings by several hundred thousand euros by paying less to the power grid operator for "compensation power." Such payments are due when less or more power is fed into the grid than had been specified in the operating schedule. To avoid this, the electric power producer needs to adhere as closely as possible to the agreed-on operating schedule — and that’s the purpose of an energy management system such as DEMS. An interesting alternative to generating additional power is for the central control station to briefly shut down large-scale consumers such as aluminum smelters. Another useful alternative is to sell electric power at the European Energy Exchange (EEX) in Leipzig, provided that the cost of producing one megawatt hour is lower than the current exchange price.
There are other uses of virtual power plants, as was shown in the case of a municipal power plant in Germany’s Ruhr district. Augmenting electric power lines to supply energy for a new residential area would have required a large capital investment. So instead of new lines, the area’s electric power needs were met by installing distributed, gas-powered, mini block-type cogeneration plants and interconnecting them to form a virtual power plant that delivers electric power and heating. This made it possible to postpone a huge investment for several years. Virtual power plants could also be "produced" from less obvious components, such as by interconnecting the emergency power generators in hospitals and factories with the battery storage systems common in telephone and Internet communications centers.
Virtual power plants also have a macroeconomic advantage. "The benefit of a power station network extends far beyond its present applications," says Werner. At present consumption rates, for example, global copper reserves will be exhausted in 32 years (see Pictures of the Future, Fall 2008, The Mother of Invention). And if the infrastructures of countries such as India and China consume as much copper as the industrial countries, shortages and price increases of this scarce metal are likely to occur even sooner.
But if newly-industrializing countries base the expansion of their energy infrastructures on intelligent power grids and virtual power plants that generate electricity near where it will be used, i.e. in a distributed system, fewer power lines will have to be built to transport electricity, and the limited copper reserves will last longer.