Virtual Power Plants VPPs are formed through the aggregation of multiple small distributed generation units (including combinations of wind, solar PV etc. systems), fixed and variable loads and energy storage systems, which are then controlled by a central Energy Management System . Through this “internet of energy” arrangement, a VPP can achieve fidelity over the supply of electricity and, through communication with consumers, demand.

The implementation of VPPs can lead to greater predictability in carbon neutral energy output; greater control over power output; better congestion management; increased ability to allocate energy to users as required; and trading of the energy generated.