Virtual Power Plants (VPP)… defining the future operations of Distribution networks?

The evolution of VPPs as aggregators of DER.

 

In an era where decarbonization and digitalization converge, Virtual Power Plants (VPPs) are emerging as pivotal orchestrators of Distributed Energy Resources (DER) encompassing solar PV, battery storage, electric vehicles, and demand response in modern distribution systems. By aggregating these heterogeneous assets into a unified, flexible portfolio, VPPs transcend traditional grid constraints, enabling Distribution System Operators (DSOs) to balance supply-demand volatility, enhance resilience, and unlock ancillary services at scale. Yet, as DER penetration surges toward 50% in leading markets by 2030, VPPs face interoperability hurdles, cybersecurity imperatives, and regulatory silos that demand harmonized standards like IEC 61850 and CIGRE's D2 working group insights. This article explores how AI-driven forecasting and blockchain-enabled markets will propel VPPs from niche pilots to grid-scale realities, fostering energy communities that empower prosumers while safeguarding system stability.

 

CIGRE’s activities on VPPs as aggregators of DER.

 

A Virtual Power Plant (VPP) can be understood as an integrator that orchestrates dispersed Distributed Energy Resources (DER), such as rooftop solar, battery storage, flexible loads, and small-scale generators into a coordinated, grid-responsive portfolio that behaves like a conventional, dispatchable power plant. From a CIGRE SC C6 perspective, this role is central to the evolution of active distribution systems, where non-dispatchable renewable-based DER are no longer passive injections but active participants in balancing, ancillary services, and resilience support.

 

DER integration as an active system enabler

 

Within SC C6, DER integration is framed as a shift from passive, one-way export to active, bi-directional participation in distribution-network operation and planning. This requires VPP level visibility and control over DER technical characteristics (inverter capabilities, ramp rates, voltage and frequency sensitivity), grid-code-compliant interfaces, and interoperable communication protocols to feed into distribution management systems (DMS/ADMS/DERMS). SC C6-related work on smart inverters, microgrids, and multi-energy systems highlights that VPPs must respect local constraints voltage bands, thermal limits, short-circuit levels while exploiting local flexibility without overloading the network.

 

Aggregation and flexibility requirements

 

DER aggregation via VPPs is a key theme in recent C6 deliverables, which stress that aggregation must be technically sound, transparent, and scalable. Requirements include amongst other, standardized data models to represent DER identities and capabilities, secure IT/OT architectures to protect against cyber threats, and robust communication enabling real-time or near-real-time control while coping with latency and intermittency. SC C6 also emphasizes traceability and auditability of aggregated flexibility, so that DSOs and market operators can verify that VPP-offered capacity is available and does not compromise network safety or any quality of supply measures.

 

Alignment with CIGRE SC C6 outcomes

 

An SC C6-oriented VPP concept positions aggregation as a building block for higher-level services: peak-shaving, loss reduction, congestion management, provision of ancillary services and resilience support during faults or extreme events. Technical brochures and working groups (e.g., on DER flexibility, DER in microgrids, and multi-energy systems) recommend that VPPs adopt modular, open-platform architectures that can be mapped onto C6-defined reference frameworks for active distribution systems, including well-defined roles and interfaces for DSOs, market participants, and end-users. In this context, the VPP emerges not just as a market-facing aggregator, but as a distribution-system integrator that aligns DER deployment with CIGRE’s vision of secure, efficient, and resilient active networks.

 

Planned SC C6 Working Group activities

 

C6 proposes to investigate the following themes for the establishment of new proposed Working Group activity in cooperation with other Study Committees when necessary.

• Forecasting of renewable energy resources (solar) and load, a tool for enhancing DER flexibility services, data management and use of AI, with the use of the geospatial location of DER.
• Distribution-customer interface requirements and associated Distribution Management System requirements
• Distribution system planning approaches, considering DER flexibility resources and planning in an environment for increased uncertainty, use of AI and optimization tools, thus enhancing energy efficiencies, the system resilience and reliability of distribution networks.
• Potential Capability Assessment of Customers’ Participation in Demand Response
• Hosting Capacity of Distribution networks with increasing incorporation of DER.

 

VPP Working Group C6.49 aim and scope

 

The working group C6.49 addresses the different aspects of a VPP, starting from the nature of the asset and their configuration within the VPP for the provision of grid and ancillary services. The needs, expectations and requirements of the distribution system operator (DSO) are considered. The specification of the VPP functions is developed based on these considerations. The deployment, configuration, and management of the VPP are addressed. Interconnection and integration requirements are presented. The document discusses elements of the economic and business case within applicable regulatory frameworks. Findings of previous working groups related to issues of DER integration and aggregation, grid services, and distribution grid operation will be included as appropriate.

The following list of topics will be addressed by the working group:

 

1. VPP assets – Aggregation of generation from conventional dispatchable resources, non-dispatchable RES, and energy storage (electrical and thermal).
2. Grid services and ancillary services provision using aggregated DER assets within a VPP structure.
3. VPP structures, features, and functions – Distributed VPP structures, microgrid configurations. VPP functions, including generation production estimation, forecasting and scheduling from all sources, and dispatch of assets for the provision of grid and ancillary services including data security technology
4. VPP grid integration and interconnection requirements for the provision of grid services.
5. Business cases for VPP stakeholders
6. Regulatory framework and jurisdictional constraints for grid service delivery.
7. Guidelines, recommendations and best practices will accompany the WG outcomes.

 

The finalisation of the Working Group activity is expected in the second half of 2028 Further alignment with current Working Group activity in SC C1, C2, C5 and D2 is also expected to take place in support of these perspectives. As the world evolves technologically, the outcomes of this VPP Working Group will provide greater flexibility attributes for DSOs to operate their networks more effectively.