Virtual power plants roll out across the U.S.
This article was originally posted by PV Magazine on 19th June 2023.Virtual power plants (VPPs) coordinate distributed resources and demand for a more resilient, cost-effective energy transition. And they are gaining traction in the United States.
VPP pilot programs have run for years in the United States. The market is maturing as the technology competes with centralized utility scale power plants as a low-cost alternative with benefits to the grid and end-users alike.
A VPP is a virtual aggregation of small-scale, distributed energy resources (DERs) including PV, energy storage, electric vehicle chargers, and demand-responsive devices such as water heaters, thermostats, and appliances. VPP technology has shown immediate promise in replacing natural gas “peaker plants” on grids, offering additional capacity during times of peak electricity demand.
Over the last decade, the US has spent more than $120 billion on 100 GW of new generation capacity, mainly for resource adequacy. A study by Boston-based consultancy Brattle Group estimates utilities could save $35 billion by 2033 by focusing on VPPs for peaker capacity.
“By deploying grid assets more efficiently, an aggregation of distributed resources lowers the cost of power for everybody, especially VPP participants,” says Jigar Shah, the director of the US Department of Energy (DoE) Loans Programs Office.
Brattle Group’s 400 MW resource adequacy study considered a utility with 1.7 million residential customers. The power company had 5.7 GW of gross peak demand and 3.6 GW of net peak demand from solar and wind resources. Its aim was to generate half its electricity from renewables by 2030. The study found VPP peaker usage would be 40% to 60% cheaper than alternatives, including gas peakers and grid-scale batteries.
