One key distinction is the capability of Virtual Power Plants (VPPs) to control consumer energy consumption in real time. Unlike standard power plants, VPPs engage with distributed energy resources, allowing grid controllers to manipulate demand from users. For instance, intelligent thermostats linked to AC units can modify room temperatures and control the electrical consumption of such units. On sultry summer days, these thermostats can pre-cool homes prior to peak hours when air conditioning is heavily used. These staggered cooling periods help to counter sudden demand spikes which may overtax the grid and result in power outages. Likewise, electric vehicle chargers can align with grid needs by either supplying or consuming electricity.
These distributed energy sources are connected to the grid via communication technologies such as Wi-Fi, Bluetooth, and cellular services. Collectively, incorporating VPPs can enhance the overall resilience of the system. By coordinating hundreds of thousands of devices, VPPs significantly impact the grid in shaping demand, supplying power, and ensuring consistent electricity supply.
How widespread are VPPs now?
Until recently, VPPs were predominantly used to control consumer energy consumption. However, with advancements in solar and battery technology, utilities can now utilize them to supply electricity back to the grid as necessary.
In the US, the Department of Energy estimates VPP capacity to be around 30 to 60 gigawatts, representing approximately 4% to 8% of peak electricity demand nationwide, a relatively small portion of the total system. However, several states and utility firms are rapidly integrating more VPPs into their grids.
Vermont’s largest utility company, Green Mountain Power, was in the news last year when it broadened its subsidized home battery scheme. Customers can lease a Tesla home battery at a reduced price or make their own purchase, receiving up to $10,500 in assistance, provided they agree to share stored energy with the utility as needed. The scheme, approved by the Vermont Public Utility Commission, can also supply emergency power during power outages.
In Massachusetts, three utility companies (National Grid, Eversource, and Cape Light Compact) have launched a VPP program that compensates customers in return for utility control of their home batteries.
Additionally, Colorado is working towards inaugurating its first VPP system, with the Colorado Public Utilities Commission urging its largest utility corporation, Xcel Energy, to establish a fully functional VPP pilot by the forthcoming summer.
