1. Virtual power plants (VPPs) use distributed energy resources (DERs) to provide grid services and make energy more affordable.
2. The U.S. utility industry has not fully utilized the potential of VPPs due to disincentives and regulatory barriers.
3. Successful proof-of-concept programs in California and Massachusetts demonstrate the effectiveness of VPPs and DERs in improving grid reliability and affordability.
Virtual power plants (VPPs) are aggregations of dispatchable distributed energy resources that can provide grid services at scale while lowering energy costs. Despite their benefits, the U.S. utility industry has not fully utilized the potential of VPPs, due to various factors. A proof-of-concept is essential for utility-scale VPP deployment, and there are regulatory barriers preventing utilities from taking advantage of these resources.
In California, the Emergency Load Reduction Program (ELRP) successfully utilized demand response to address capacity supply shortfalls and extreme weather conditions. In Massachusetts, the ConnectedSolutions program effectively enrolled residential and commercial customers in DERs to meet energy efficiency goals.
To leverage the untapped potential of DERs and VPPs, regulators and utilities must integrate these resources into planning processes, ensure fair compensation for customers, and provide incentives for asset deployment. By adopting these policy principles, utilities can create a more flexible, reliable, and affordable electricity system for the 21st century.
The Virtual Power Plant Partnership (VP3) aims to promote active VPP deployments and supportive policies. Through collaborations with industry voices and regulatory bodies, VP3 seeks to influence policies, regulations, and market rules that benefit both the grid and communities. VP3 members, including RMI, EnergyHub, Olivine Inc., and other industry experts, work together to shape the future of distributed energy resource management and grid services.