Virtual Power Plants (VPPs) are transforming energy management by offering consumers the ability to participate in the energy market while benefiting financially. A VPP is a collection of small or medium power-generating units that, aggregated and coordinated with grid operations, enable financial and efficiency benefits for consumers and the grid. VPPs connect distributed energy resources (DERs), such as solar panels, batteries, and electric vehicles, that can be located on different types of buildings, such as homes or commercial centres. VPPs turn consumers into active producers while allowing them to sell excess energy back to the grid: users not only save on electricity costs but also generate new sources of income. On top of this, they provide ancillary services to support grid stability and facilitate the optimisation of electricity usage based on market conditions.
Beyond financial advantages, VPPs strengthen the efficiency and reliability of power systems while advancing the fight against climate change. By encouraging the transition to cleaner energy systems, VPPs help integrate renewable energy at a large scale.
These impacts make VPPs a key driver in the modernisation of energy systems, especially in regions like Latin America, where abundant renewable resources—such as solar, wind, and hydroelectric power—can be harnessed.
Countries like Colombia, Mexico and Brazil are starting to recognise the transformative potential of VPPs. There are discussions surrounding supporting measures such as frameworks for distributed energy generation, incentives for renewable energy adoption, and the integration of smart grid technologies. Additionally, decreasing costs of IoT devices, smart metres, and energy management systems are making VPPs more feasible, accelerating their implementation across the region.
In Colombia, with our partner CELSIA, BASE aims to accelerate the adoption of Distributed Energy Resources (DERs) through the development and deployment of scalable Virtual Power Plant (VPP) models. This initiative is focused on enhancing the electrical system’s efficiency in the country by promoting energy generation closer to consumption points, thereby reducing the transmission and distribution losses that are characteristic of traditional power systems. VPP models will be directly implemented and tested with real customers.
The pilot project in Brazil aims to gather data from a small group of residential and commercial prosumers. This data will be used to assess how aggregated energy from these prosumers could support demand response programs and create new revenue streams. The project will utilise existing microgrid controllers or similar equipment to provide active energy management capabilities to the group of prosumers. The focus will be on gathering data related to energy production, consumption, and aggregated flexibility, with a focus on simplified applications rather than the entire VPP ecosystem. Additionally, the project will investigate how aggregated energy surpluses could be monetised, focusing on billing and flexibility within the regulatory environment, and considering the National Operator’s (ONS) Demand Response Program.
In Mexico City, a pilot project was launched to aggregate rooftop solar PV systems installed on retail businesses, enabling the sale of surplus electricity to qualified users in Mexico. This initiative involves installing smart metering systems in retail facilities using grant funding. These meters will provide real-time data on electricity consumption and generation, which will be used to develop a robust monitoring and information management system specifically tailored to the retail sector’s needs and to support the sale of surplus energy to other consumers. The project has multiple phases, including: Completion of smart meter installation across several retail facilities, calibration of meters and integration with Grupo Dragon’s system for seamless data transmission and full operation of the monitoring system and pilot test of energy aggregation, commercialisation, and retail agreements under the VPP model.
The overarching objective of these pilot demonstration projects is to generate compelling evidence of the advantages of VPPs, both for the participating energy companies and for the wider energy sector. This evidence will be critical to scaling VPP solutions and engaging in constructive dialogue with regulatory authorities.
