Smart grids will support 43% of the global electricity supply by 2030, driven by virtual power plants (VPPs), according to a whitepaper from Juniper Research.

This will grow from less than 25% in 2024.

The report identified VPPs as a key driver of growth over the next five years. VPPs provide decentralised energy supply from multiple smaller sources, such as solar panels, wind turbines and battery storage systems, rather than a single larger source.

By decentralising energy distribution, VPPs provide more stability in smart grids.

“VPPs will help balance supply and demand in real time and make energy supply much more resilient to rapid changes in demand,” said Adam Wears, associate research analyst at Juniper Research. “This will become key as the global demand for energy increases.”

To increase the impact of VPPs, Juniper believes vendors must develop interoperable platforms that orchestrate decentralised VPPs in real time to foster interoperability between energy sources. This will help VPPs overcome the cost of integrating a diverse range of market participants into an ecosystem that require a large number of energy providers. In addition, Juniper urges the development of standard protocols for data sharing, real-time visibility and settlement, if adoption is to grow.

“To fully capture the benefits of wide-scale decentralisation, vendors must think beyond integration,” said Wears. “VPPs must attract small-scale energy providers by introducing pricing models, such as time-of-use tariffs, real-time pricing and capacity-based payments.”

The research suite (www.juniperresearch.com/research/sustainability-smart-cities/smart-cities/smart-grid-research-report) offers a comprehensive assessment of the smart grid market to date, including market analysis and forecasts for 61 countries. The dataset contains over 21,000 market statistics within a five-year period. It includes a competitor leaderboard and an examination of current and future market opportunities.

An extract of the whitepaper is available as a free download at www.juniperresearch.com/resources/free-research/decentralising-the-smart-grid-opportunities-and-challenges.