# Virtual Power Plant Optimization in Smart Grids: A Narrative Review
## 4 VPP Applications in Smart Grids
### Local Energy Autonomy  
Energy autonomy is considered an effective solution for managing local energy systems and represents a relevant development direction for managing decentralized smart grids characterized by sustainability [44]. The VPP may provide support for energy autarky by coordinating the energy generation with the storage and the demand so that the local microgrid can work decoupled from the grid [52]. One problem is how to manage the energy demand and the renewable supply in a balanced way so that the exchanges of energy with the main grid are minimized [78] (see Figure 5). The grid can benefit from the power supply stability at the edge, while the VPP can work fully or partially powered by renewable [36]. \begin{table}
\begin{tabular}{c c} \hline \hline
**VPP Energy Service** & **Literature Approach** \\ \hline Imbalance prevention, store for excess & [58,62,66,67,73,76–78] \\ power, peak-cut & [54,55,57,58,68,69] \\ Load scheduling and balancing, & [53,58,53,54,56–61,65,68,70,74,75] \\ energy trading & [53,58,53,54,56–61,65,68,70,74,75] \\ Energy consumption/production prediction & [5,55,57,60,61,63,64,69,77] \\ Energy backup and stability & [22,61,71,72,74,75] \\ Capacity management, frequency regulation & [4,54,58,62,73,74,78] \\ \hline \hline \end{tabular}
\end{table} 
Table 3: Energy services delivery through VPP coordination. In this scenario, the management of the energy reserves has an impact on the VPP, and therefore it is well connected with energy islands [90]. The islands are an example of a local energy system that is facing geographical, technical, environmental, and socioeconomic challenges related to its energy supply. The energy supply of islands often relies on high yet costly dependency on imported fossil fuels, suffers from energy supply constraints due to the lack of interconnections among electricity and gas, and is significantly affected by the high seasonality of demand due to tourism [81]. VPPs can provide a more targeted approach for moving forward towards a sustainable and more decarbonized energy supply, which combines and integrates both technical and socioeconomic components [5]. Such energy systems share a significant wind and solar potential so that renewable energy can provide a good opportunity for decarbonization while reducing the pressure on the local economy. VPP usage to achieve local autonomy was researched and applied considering renewable such as large-scale solar, rooftop solar, biomass, biogas, mini hydro, etc. The concern, in this case, is related to the amount of flexibility needed to assure the stability of the local power systems [91]. One of the solutions to this problem, proposed in [79], is the battery energy storage system. This technology provides good opportunities in mitigating some of the power system issues. Such energy storage is considered relatively new technology but can provide good levels of local energy autonomy [92]. Achieving renewable energy integration to create local energy autonomy requires the engagement of consumers [111]. In [80] is described the development of a VPP in Western Australia that uses a cloud platform for decision-making and considers a renewable generation redox flow battery [93], heat pump, and management of appliances. The authors estimate that the energy cost is reduced by 24%. Insular areas took steps in studying the possibility of gathering energy autonomy using renewable energy and VPPs. As mentioned in [87], planning a system to offer autonomy using renewable energy can be challenging due to the change in weather conditions. For this reason, stability may be affected. For example, Ireland and UK do not have optimal interconnectivity with the distributors of energy based on fossil fuels, but, at the same time, the wind represents a resource that could be exploited. The studied and simulated requirements were the static ones that focus on the balance between the demand and the supply that needs to be proactively achieved to avoid offering a frequency that is not sustaining the minimal needs [112].