A growing number of homes and businesses have solar panels and batteries that can provide electricity to the property and can also deliver power to the electricity grid when needed.

When used together in large numbers, and co-ordinated via internet commands, hundreds of thousands of these small-scale generation and storage systems can act in concert, functioning, in effect, as a virtual power plant that can be switched on and off at short notice.

Users must opt in to allow their equipment to be used in this way, and they are paid for the energy supplied.

Virtual Power Plants can eliminate the need for expensive, polluting ''peaker plants'' to maintain supply at peak times.

They can also help electrical utilities with frequency regulation and voltage control, both of which must be managed carefully to balance supply and demand, particularly on electrical grids that rely heavily on intermittent sources such as solar and wind power.

Virtual power plants are an example of how ''smart'' grids can facilitate the shift towards renewable energy sources.

They have been deployed in Australia, Britain, California and Germany.

The World Students Society thanks The Economist.


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