Virtual Power Plant (VPP) is a concept that aggregate Distributed Energy Resources (DER) together, aims to overcome the capacity limits of single DER and the intermit-ted natural characteristics of renewable energy sources like wind and solar. The whole system can be viewed as a single large-capacity power plant from the system‘s point of view. In this project, the literature review of VPP concept, architecture, existed project and the survey of VPP in Sweden are being conducted first. Secondly, the simplified VPP model is built on MATLAB/Simulink software. The simplified system contains a wind farm, a hydro power plant, a dynamic system load and an infinite bus representing the large transmission grid. During the simulation process, the generation and consump-tion unites are running according to the real history data located in external database. In the third place, optimized control schemes for the hydro unit in VPP model to decrease its effects on transmission grid are implemented in Simulink model. At the same time, hydro turbine should be controlled in an optimized way that without large turbulence. Basically, the hydro power plant is responsible for balancing the active power between the wind farm and dynamic load. Since there is a limit for the hydro turbine output, the rest of either power shortage or surplus power need to be com-pensated by the grid. This is the fundamental control scheme, so called run time con-trol scheme. The advanced control schemes here are based on the moving average control method and forecast compensation control method. The forecast compensa-tion control method use the 24 hours ahead load forecasting data generated by Artifi-cial Neural Network. Later on, analysis of those three control schemes will be pre-sented. The last part of the project is the conclusion of the different control schemes according to comparison of their control results.