Virtual Power Plants in Europe: An In-Depth Look at Market Growth and Software Ecosystems
The concept of a Virtual Power Plant (VPP) is not new. Historically, it referred to power generation facilities that, while consisting of multiple production units, could be valued as a single, cohesive entity. However, the idea of VPPs has gained renewed importance due to the rise of distributed energy resources, both in production and storage. These resources include renewable energy generation, contributions from prosumer communities, and investments by commercial and industrial companies in solar power and energy storage systems aiming to reduce energy costs.
The key distinction between a VPP and a simple network of distributed resources lies in the VPP’s active participation in energy markets. The VPP value chain starts with the aggregation of assets—production, consumption, and storage—and extends to the trading of the aggregated power on energy markets and then loops back to the dispatch of resources in alignment with the traded power. This broad definition of assets and targeted market realization positions VPPs as a critical tool for modernizing energy systems and accelerating the transition to net zero.
ComTech’s VPP study had two primary objectives: first, to analyze the types of companies operating across the VPP value chain and the software solutions they require; second, to identify the companies providing various VPP-supporting solutions and estimate the market size for these tools.
We believe this is the first analysis of its kind, offering a detailed segmentation of software tools along the VPP value chain. It identifies the companies providing these tools, estimates the market size, and projects growth rates for basic aggregation solutions.
Our market size and growth rate estimates focus on the six largest European markets—Germany, France, Italy, Spain, the UK, and Poland—and cover VPPs oriented toward production including Battery Energy Storage Systems (BESS), as well as consumption-oriented and mixed-asset VPPs. Estimating these figures was challenging due to conflicting and incomplete information, but the projected Compound Annual Growth Rates (CAGR) through 2030 appear reasonable and align with other industry estimates for renewable and BESS technologies. ComTech plans to update the market size and growth rate estimates annually as new data becomes available.
The final report is not only relevant to companies involved in VPP aggregation solutions but also to those working along the entire VPP value chain—from real-time trading and scheduling solutions to data management and analytics platforms. It offers a comparative analysis of regulatory environments for VPP market access across different countries and provides insights for software vendors on which type businesses are driving VPP technology adoption in each market.
The report is available for free download here: VPP Market Study – ETT Center | ETT Center and VPP Market Study – CTRM Center | CTRM Center
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