If your business has a commercial battery, it may be able to do more than cut peak-time electricity costs. By joining a Virtual Power Plant (VPP), your site could also earn income by making stored power available for energy trading in Great Britain.
In this article, learn how virtual power plants in the UK operate, the savings they can generate and how to join one.
What is a UK virtual power plant?
A UK virtual power plant (VPP) connects one or more types of controllable on-site energy equipment across different commercial sites. That equipment may include:
- Commercial battery storage
- Solar panels
- EV chargers
- Heat pumps
- Cold-store compressors
At each site, the VPP software can tell equipment when to charge, discharge, use less grid power or export power where the site’s setup allows it.
Across all connected sites, those actions add up. The VPP manages them as one larger pool of flexible power, so a group of smaller sites can take part in the wholesale energy market together.
Commercial VPP versus home VPP
Home VPPs pool thousands of home batteries at the same time while the focus of commercial VPPs is on fewer, larger batteries on business sites.
The main differences between the two systems are:
| Home battery | Commercial battery | |
|---|---|---|
| How to join | Usually through the household’s electricity supplier or a home battery tariff | Usually through an aggregator, which groups commercial sites to trade their combined power |
| What you can earn | Export payments through an export tariff, often under the Smart Export Guarantee (SEG), or rewards for using less power at set times | A lower site bill at first, and if the site qualifies, possible trading income in Great Britain |
| Any limitations? | The household may need enough charge left for its own use. The supplier or scheme operator can only use the battery at the times and in the ways the household agreed to. | The business may need the battery for normal work, such as machinery, fridges, heating, EV charging or backup. So the VPP can only use the part of the battery the site agrees to make available. |
| Meter and contract | A domestic meter and household supply contract | A commercial meter, a commercial supply contract and an export limit, which sets how much power the site can send back to the grid |
What a commercial VPP connects to on your site
The equipment a VPP uses is behind the meter on your side of the electricity meter. That means it can power your site, store electricity, or change when your site uses grid power.
Your site’s power needs come first. A VPP can only use the part you agree to make available, within the limits you set. It will not use battery charge you have reserved for your own site, or control equipment outside the rules you agree.
Where your site has a battery energy storage system, or BESS, the VPP can use it as one of the most flexible assets on site. The software can decide when the battery charges, when it powers the site, and when it sends power back to the grid, where your export setup and contract allow it.
A VPP can also use other flexible equipment, each within its own limit, like:
- Solar panels can power the site, charge the battery, or send spare power back to the grid, depending on your setup
- EV chargers can charge vehicles sooner or more slowly, but they need to be ready when customers or staff want to use them
- Heat pumps can warm or cool a building before prices go up, then ease off while conditions are comfortable.
- Cold-store compressors can chill harder before costs rise, then ease off while the store stays in its safe range.
- Non-critical pumps can come on earlier or operate more slowly, but they must not hold up or slow production
Where there is a battery, size matters because a larger battery gives the VPP more power to work with. But size is not the only test. The VPP also needs to control the battery safely, and your meter, export setup and contract have to allow trading. Export setup means your site has an approved way to send power back to the grid, including any export limit that applies.
Many kinds of sites can work well with a VPP, including farms, hotels, warehouses, factories and EV charging sites.
Note: Battery cycling is how often a battery charges and discharges, and some battery makers limit the number of cycles as part of their warranty.
How GB batteries take part in wholesale electricity trading
Single commercial sites rarely sell power into the GB wholesale market on their own. It is possible, but you would need a route into the market, high-quality meter data and someone to manage the trades. For one site, that is usually too much cost and effort.
Energy aggregators do this for companies. They are registered market operators, meaning they act for clients in the wholesale market. The rule change that allows this is P415. Before P415, firms could use this route if their electricity supplier allowed it. However, most suppliers did not offer it, because they were not set up to manage lots of small, customer-side batteries.
Aggregators send charge and discharge instructions to each battery they control. They do this when market prices make a trade worthwhile. With a VPP, they repeat this across many batteries and sites, so the combined response is large enough to sell.
Other ways to trade in the wholesale market are:
- Capacity Market: You get paid to stay on standby, reading to supply power when the grid is short, rather than for the power itself
- Balancing Mechanism: You get paid to turn output up or down and short notice to help match supply and demand across the grid
In this article, our focus is on the wholesale market. This is where a battery earns money through storing power when it is cheap and selling it when prices are high.
How commercial sites save or earn from its battery
Batteries can reduce bills and, where the site setup allows it, earn income through energy trading.
Energy arbitrage
A battery lowers bills by charging when power is cheap, usually overnight, and discharging when power is expensive. This works best on a time-of-use tariff, where off-peak power costs less than peak-time power.
Trading income
Trading income is less predictable. It depends on wholesale prices, which move all the time, so it is not income you should count on before your site has been checked.
Demand side response is another income route. This means cutting, increasing or moving your demand for grid electricity at certain times of day. Those changes can have value when the grid needs help.
For example, say you run a factory that normally imports 200 kW of electricity between 10am and 11am.
NESO, the National Energy System Operator for Great Britain, calls a Demand Flexibility Service event for that hour. The Demand Flexibility Service pays participating sites to change when they use electricity.
If your battery powers 100 kW of your factory load during that hour, your site imports 100 kW less from the grid. Your factory keeps running, but the grid has less demand to cover. If your export setup and contract allow it, your battery may also export stored power to the grid when prices or system conditions make that worthwhile.
Your aggregator or VPP manages these actions for you and works out what income is due.
If your site already buys power on a wholesale tariff where the price tracks the market, some of the savings may already show in your bill. In that situation, extra trading income may be lower.
These GB market routes do not apply in the same way to Irish sites. Irish sites use different electricity market rules, so they need to be checked separately.
Checking your site can join a VPP
Before deciding whether your battery setup can join a VPP and trade, your provider will want to check the following:
| Check | What it means |
|---|---|
| Metering | Your meter needs to record import and export clearly enough to show what your site used, exported or changed. For many GB commercial sites, this means half-hourly data, often through profile class 00/half-hourly metering. |
| Battery size and controls | The battery needs to be large enough to make trading worthwhile, and its controls need to accept external charge and discharge instructions. |
| Export limit | Your site needs permission to send power back to the grid. Your connection agreement may cap this, sometimes through a G100 export limitation scheme. |
| Contract and supplier | Your supply contract needs to allow battery trading. Not all contracts do. |
| Site limits | Your own rules on how much charge stays back, when the battery is off-limits, and who can override. |
Taking the next step
The first step is a check of your site. From that, we work out what your equipment can safely do and what you could save.
GridVolt does not supply the battery. We add the software that runs it and, for compatible GB sites, the route into a VPP for trading. There are two ways we help, and some GB sites suit both:
- Energy Manager: the place to start if the main aim is a lower bill, or if your site is in Ireland. It runs the battery around your load, your solar and your tariff, so you buy less at the priciest times.
- GridTrade: for compatible sites in Great Britain. If your meter, battery controls, export limit and contract pass the checks, GridTrade does the trading for you.
Tell us about your battery, tariff and site load, and we will tell you whether Energy Manager or GridTrade is the better place to start.