To provide continuity of balancing demand and generation, renewable sources will be more active than today in near future due to tendency of massive investment on Renewable Energy Sources (RESs) by countries. However, due to uncertain and intermittent nature of renewable energy sources, RESs would create problems on power system operations such as power quality, efficiency, stability, and reliability. Due to having problems with renewable energy sources integration, Virtual Power Plant (VPP) has introduced to make this integration smooth without compromising the grid stability and reliability along with offering many other techno-economic benefits. This paper reviews structures, types, architecture and operations of VPP along with status of present implementations worldwide. The types of VPP is introduced in details with optimization algorithm used with each types. In addition, VPP is linked with the most of the components in power systems such as Distributed Generation (DG), active prosumers, Transmission System Operator (TSO) and Distribution System Operator (DSO), grid services such as fault ride through, reactive power control as well with the help of technology such as communications, control and optimizations.
The continued strong development of Distributed energy resources (DERs) provides the great opportunity for renewable energy investors around the world. The worldwide DERs integration grows the average rate of 20% by the end of 20th Century . Due to priorities on carbon footprint reduction and harnessing energy from alternative sources than fossil fuel, DERs integration with existing power grid will be kept to increase more for the time to come. While these growths provide the lots of advantages, it creates new challenges to manage grid in an effective way. From the experiences of TSO and DSO, some problems occur while integrating the DERs with existing grid such as transmission congestion, voltage and frequency stabilities, and reliability problems due to uncertain and intermittency natures of DERs. Microgrid is a localized group of energy sources and loads that may operate at grid connected or islanded modes. The concept of microgird is getting popular since last decade and there are many Microgrids actively operating at different parts of the globe. The major investment in a Microgrid is on its DERs. In many Microgrids, the operators have to handle problems come up with DERs otherwise green energy should be threw away instead of being utilized. These problems create a new research area to seek solutions for integration of DERs without creating grid stability and reliability problems. One of the new solution of eliminating of DERs negative impacts is through the transformation of Microgrid to VPP. VPP coordinates all DERs as in a single agent to integrated them into grid without compromising the grid stability and reliability, adding many other additional benefits and opportunities to consumers, prosumers, and grid operators With the gained experienced from smart grid concept, has been studied on decades, VPP can be implemented easily and successfully which has already been tested in some country. Some of the smart grid technologies that may help to integrate VPP are intelligence algorithm, i.e., power generation, transmission and distribution, and demand response by using customer participation with the usage of advanced communications such as internet protocols. Web to Energy (W2E) project  is one of the biggest development on smart grid, that can easily to be adopted to VPP concepts. Communication of network of physical devices has enabled project of Internet of Things (IoT) . IoT allows different devices to be sensed, communicate each other and also controllable from remote locations. This method is applied for direct integration between intelligent devices with computer-based software offering advanced connectivity among the devices. Similar to IoT; VPP combines, communicates, and behaves like a neural network for each different DERs agents. Figure 1 demonstrates simply how householders share their energy within a VPP. This system aggregates all DERs and other units inside the system. Figure 2 shows how units are clustered and connected with centralized VPP. These clusters interact with each other in order to behave as just as one unit. Localized control centre is emerged as a self-organized intelligent solution. To obtain a self-intelligent system and make decision, there are many optimization algorithms have been developed.