Portland, Oregon and Pune, India: According to a report published in early October by Allied Market Research, the global virtual power plant market was valued at $762 million in 2016, and is expected to quintuple to $4,587 million by 2023, registering a cumulative annual growth rate (CAGR) of 25.9% from 2017 to 2023. North America is expected to dominate the market and is expected to maintain this trend throughout the forecast period.
The term “Virtual power plant” is used by the proponents to describe an aggregation of decentralized generators with the ability to integrate different distributed energy sources such as biomass plants, biogas block heating plants, wind turbines, and hydroelectric plants.
Growing demand for renewable energy in the power generation sector, changes in the configuration of power grids from centralized to distributed, and moderating costs and easy accessibility of energy storage drive the growth of the virtual power plant market. However, health concerns over human exposure to high frequency electromagnetic and radio waves hamper the potential of the market for some end users.
The industrial segment accounted for around half the share of the global market in 2016, and is expected to maintain its dominance during the forecast period. However, residential sector is also expected to grow with a high CAGR due to increasing demand for renewable energy.