Virtual power plant

A virtual power plant (VPP) is actually a smart grid with renewable energy production. All kinds of forms come together in it, such as solar and wind energy, and function as one large power plant. This powerful collaboration of small, dispersed energy sources ensures optimal use of available energy, without the need for a physical power plant.

Bob Hermans

Bob Hermans

22/4/2025
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A virtual power plant works digitally and smartly: it collects data from various sources, such as solar panels on roofs, wind turbines in polders and battery systems at companies and households. With this data, the system matches the supply and demand of energy. This creates a flexible, sustainable and efficient way to produce, store and distribute energy.

What is a virtual power plant?

A virtual power plant is a digital platform that combines and controls multiple, distributed energy sources as if it were one large power plant. Also known in Dutch as a virtual power plant, it involves connecting multiple smaller generation units, such as solar panels and wind turbines, together with battery systems to optimize overall energy production and storage.

Participating energy sources are linked together via smart software, enabling data exchange and dynamic matching of supply and demand. This leads not only to a more efficient use of renewable energy, but also to a more stable and reliable energy supply. The virtual power plant thus constitutes a powerful tool for bundling and coordinating local and regional energy production.

Balancing supply and demand with a VPP

A virtual power plant helps to continuously balance energy production and consumption. By coordinating all connected energy sources, think solar and wind power, as well as batteries, it effectively responds to fluctuations in electricity demand.

When demand increases, a VPP can release additional capacity from battery systems or other sources. When there is a surplus of energy, such as on sunny and windy days, the virtual power plant ensures that this energy is stored or used elsewhere.

In this way, a VPP promotes the stability of the overall power grid. It prevents peak loads and also prevents unnecessary energy losses. This is important to support the growing demand for renewable energy while ensuring grid reliability. A virtual power plant thus provides a solution to multiple challenges within the energy transition and makes renewable energy sources more efficient and profitable.

For whom is a virtual power plant of interest?

A virtual power plant can be of interest to individual homeowners as well as larger organizations and even entire communities. Individuals who generate their own energy, for example with solar panels, can more easily share or sell their excess energy with a virtual power plant. This makes renewable energy not only profitable, but also accessible to more people. In addition, you can join forces as a local community by cleverly exchanging energy and benefiting from economies of scale.

Virtual power plants are also attractive to businesses. By combining multiple production and storage sites into one system, you increase the stability of your own power supply and reduce dependence on the public grid. This ensures a more reliable energy supply, which is important when you are dealing with large production processes or sensitive equipment. Moreover, a virtual power plant helps make your operations more sustainable by allowing you to make better use of renewable energy sources and effectively manage your energy costs.

Benefits of a virtual power plant

A virtual power plant offers several benefits that contribute to a more efficient, sustainable and reliable energy supply. Listed here are the most important benefits:

  • Optimal utilization of renewable energy: because multiple energy sources work together, a virtual power plant can choose the best time to use or store generated energy.
  • Improved grid stability: by accurately matching supply and demand, peak loads on the energy grid are reduced, helping to prevent outages and instability.
  • Cost savings: smarter use of energy sources and storage options, such as energy storage systems, often leads to lower energy costs for both residential and commercial users.
  • Scalability: both small households and large businesses can participate, allowing a VPP to grow as more participants join.
  • Sustainable collaboration: a virtual power plant makes it easier to share locally generated green energy, contributing to wider adoption of renewable resources.

All in all, a virtual power plant provides a future-proof approach to energy management. Smart use of different sources and storage creates a more efficient and reliable system that moves optimally with the demand for renewable energy.

Virtual power plants in the Netherlands

In the Netherlands, virtual power plant developments are in their infancy, but the first initiatives are already proving their worth. Communities and companies with solar panels, wind turbines or other forms of sustainable generation are increasingly digitally connected to each other via a central platform. This platform not only regulates the exchange of energy, but also ensures that there is a balance between production and consumption.

In periods of high solar or wind energy, a virtual power plant helps to store or distribute surpluses, while in periods of lower production, additional capacity from batteries or other sources can be used. In this way, the Dutch grid is relieved and users can benefit from lower energy costs.

At the local level, we see that initiatives around virtual power plants are mostly based on cooperatives and small-scale projects, in which individuals and companies within a community act together. This contributes to a sustainable and future-proof energy supply because it reduces dependence on large energy producers while giving people more control over their own energy use.

Although steps still need to be taken to roll out virtual power plants on a larger scale in the Netherlands, initial applications show that this method of smart energy management has the potential to pay off both economically and environmentally.

Start building your virtual power plant with Frax!

Do you want to get started immediately on setting up your own virtual power plant and benefit from a stable, sustainable and cost-effective energy supply? Then it is important to choose reliable battery systems and smart energy solutions. With Frax's products, you lay the foundation for a scalable and efficient virtual power plant, so that you are ready for the future.

Contact Frax today and find out how their plug-and-play batteries can help make the most of your renewable energy sources. This is how you take the first step toward a more flexible energy grid and build a long-term successful VPP project.

This post was last updated on: 

1/4/2025

Bob Hermans

Founder & CEO

After being active in the energy market for more than a decade, I decided to found Frax in 2023. With Frax, I want to support installers with smart, plug-and-play battery storage systems that really make a difference. My passion lies in renewable energy and innovation, and I believe that simple, reliable solutions are the key to a future with more efficient energy use.

Wondering what we can do for you?

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