Ask 10 Smart Energy guys what Virtual Power Plant is about, you will probably end up having 10 answers – all could be different but correct at the same time, seriously, legitimately, genuinely, correct.
To take the literal meaning of its name, VPP is just about having the power plants virtually displayed online (I am not a IT guy, I would guess there is nothing fancy about it). But that’s only the start of an entirely new evolution. What you do with the “digital copies” of the plants with all the “Big” data collected afterwards is in fact what defines virtual power plant. All kinds of the VPP derivatives, such as Asset Management, Demand Response, Micro-grid Management, Load Shedding, just to name a few, are the results coming out of this process. In here, Data Analytics and Optimization are the 2 most commonly referred to methods.
“Data Analytics” is less of a trouble to explain – anyone can bullshit in any direction and still manage to be right, it is simply too big a target to miss. Optimization, on the other hand, can be quite confusing. It is often to be either underestimated in its complexity, or mixed up with the concept of Data Analytics. Don’t get me wrong: optimization is probably part of Data Science in academic terms thus shares the same umbrella with Data Analytics. But if we are to look at it in the perspectives of business use cases and project deliverables, I would rather distinguish these 2 terminologies right from the beginning.
It is fairly challenging to do the explanation in pure text, so I took a comparison table here to help.