> ## Content Index > Fetch the complete content index at: https://121gigawatts.org/llms.txt > Use this file to discover other available public pages before exploring further. # What Is a "Virtual Power Plant" Anyway? - URL: https://121gigawatts.org/what-is-a-virtual-power-plant-anyway/ - Published: 2019-08-12T00:00:00.000Z - Updated: 2026-10-27T18:58:09.000Z - Description: When I first saw the job ad for sonnen, I was speechless. Whoa. Home batteries. Blockchain. Virtual power plant. What the heck is a virtual power plant? - Author: Zoltán Marić - Tags: VPP, #Import 2026-10-27 12:17 When I first saw the [job ad for sonnen](https://stackoverflow.com/jobs/153708/blockchain-entwickler-m-w-f%C3%BCr-ein-virtuelles-sonnen-gmbh?ref=121gigawatts.org) back in September 2017, I was speechless. Whoa. Home batteries. **Blockchain.** Virtual power plant. In Berlin! What the heck is a *virtual power plant*? I love it. Well, needless to say, I immediately started preparing to apply for the position, and in a couple of months, I got it indeed. However, it really took me quite a while to understand why **a** **bunch of batteries working together** trying to stabilise the power grid was called a “virtual power plant”. And what is it about a power grid that needs to be **stabilised**? --- # What is a **power plant?** A power plant is one of those factory-looking things that generates electricity, right? One of these: ![](https://121gigawatts.org/content/images/2022/03/Battersea_Power_Station_from_the_river.jpg) Battersea Power Station, [Alberto Pascual](https://commons.wikimedia.org/wiki/File:Battersea%5FPower%5FStation%5Ffrom%5Fthe%5Friver.jpg?ref=121gigawatts.org) \[[CC BY-SA 3.0](https://creativecommons.org/licenses/by-sa/3.0?ref=121gigawatts.org)\] *Lovely*. Very Pink Floyd. So how can a bunch of batteries be a power plant? They don’t *generate* electricity — they *store* electricity. That’s not what a power plant does! Technically, that *is* correct, however, the catch is that **generating electricity is not *all* a power plant does**.Its responsibility is also to **generate electricity at a strictly defined rate**. In other words, a power plant also has to control how fast it is producing energy, i.e. how much energy it is producing over time. This *rate*, or *“speed”* of producing energy is called **power**, and it’s usually measured in **megawatts** for power plants. Here are some quick numbers to help you get some perspective: - A power plant producing at 300 MW will have produced 300 MWh of **energy** in an hour (duh) - In 2014, an average household in the EU was consuming **3600 kWh in a year** (source: [EnerData](https://wec-indicators.enerdata.net/household-electricity-use.html?ref=121gigawatts.org#/household-electricity-use.html)) # Why does a power grid need to be stabilised? Here’s something I had been completely *clueless* about, before I started working in the energy industry: **How can it be that I can just decide to start my washing machine** or a hair dryer at any time, **and no one cares**, i.e. the power outlet just *covers* it. Like **where does that extra energy suddenly come from**? *Surely* **that far-away power plant didn’t increase its production** just to cover that extra energy consumption *I* just caused. Well, **it kinda did**. In order for a power grid to operate properly, **consumption has to equal production at all times**, within a very small margin. But how does a power plant *know* that consumption increased or decreased? Conveniently, there’s actually a very simple measure that tells exactly this — the **grid frequency**. In Europe, **the grid frequency equals 50 Hz when production exactly matches consumption**. If it’s above 50 Hz, production is higher than consumption, and if it’s below 50 Hz … you get the picture. Certain types of power plants reserve a part of their capacity for the ability to decrease or increase their production as the frequency increases or decreases, thus *stabilising the grid*. This reserve capacity is called frequency containment reserve (FCR). If you would like to understand in more detail how grid frequency works, perhaps my post *“*[*What’s the Deal with Grid Frequency?*](https://121gigawatts.org/whats-the-deal-with-grid-frequency/)*”* can help you with that. # Will you *please* tell us what a Virtual Power Plant is already? Why yes! Generally speaking, a virtual power plant is a group of grid assets and a piece of software that can control their production or load. It could consist of generating assets, like small biogas power plants and wind farms; or load assets, like an aluminium furnace. The VPP software controls power generation and load of its assets as required by the grid. This is exactly it —while power plants reserve a part of their generation capacity in order to be able to increase or decrease production, **the sonnen Virtual Power Plant achieves the same effect** with a swarm of household batteries. **It feeds power from the batteries into the grid when there’s excess demand, or pulls power from the grid and stores them into the batteries when there’s excess supply**. # OK, what’s the big deal about that? More and more energy is coming from solar and wind. Unlike in the case of conventional power plants, generation from wind and solar cannot be *increased* to meet demand, and it can only be ***curtailed*** (i.e. **shut off**) to decrease excess production, meaning **part of the renewable energy that *could* *have* been produced is *wasted***, because there wasn’t enough demand to consume it. In addition, **because solar and wind energy is so volatile, the grid frequency also becomes more volatile**, requiring more e.g. gas plants to perform frequency containment. Contrast that idea with using batteries for frequency containment, where the same **excess renewable energy** that was stored when there was excess production **can be released back into the grid at a later time, when there’s lack of (renewable) production.** sonnen recently released a pretty video on this exact topic, you may like it: --- I find the challenges of modern energy generation and power grids fascinating, and I feel galvanized to help solve them as quickly as possible. This is why I will try to clarify these challenges in a series of blog posts, along with our ideas and attempts at tackling them. Am I doing a good job? Was that interesting and understandable? Did I share some horrible misinformation? Do you disagree with me? Do you have any questions? **Please let me know** in the comments or on [LinkedIn](https://www.linkedin.com/posts/zoltanmaric%5Fwhat-is-a-virtual-power-plant-anyway-activity-6566769572135874560-9VHi?ref=121gigawatts.org), or on [Twitter](https://twitter.com/zoltanmaric/status/1161007233989337088?s=20&ref=121gigawatts.org) :)