RTO Insider reports on United's webinar "Expanding Virtual Power Plants Across the U.S.," which explored how virtual power plants (VPPs) can help regulators, utilities, and other grid stakeholders manage key challenges facing the grid, and the importance of scaling VPPs to meet the country's energy, affordability, and reliability needs. The article quotes United's Chloe Holden, who moderated the discussion, and expert panelists featured on the webinar, who shared their insights on the future of VPPs.

As energy demand — and demand peaks — scale up, virtual power plants are turning the energy industry’s traditional models of supply and demand on their heads, said Chloe Holden, an industry analyst at Advanced Energy United, in her opening remarks at a Sept. 16 webinar on the vital role VPPs could play in the U.S. clean energy transition. 

“Virtual power plants … are large groups of distributed energy resources in homes and businesses that can be controlled remotely, so that we don’t have to rely on coordinating supply to meet demand,” Holden said. “Instead, we can schedule demand to match supply.”

The technology and business models are well proven, she said. For example, EnergyHub, a provider of demand side services, now manages more than 1.3 million “connected devices” ― including smart thermostats, batteries, electric vehicles and water heaters ― for more than 60 utilities across the country, according to Nick Papanastassiou, the company’s director of market development and regulatory affairs.

“We work with a network of about 50-plus [original equipment manufacturers] across all sorts of devices,” he said.  

The U.S. has between 30 GW and 60 GW of VPPs online, Holden said. But the U.S. Department of Energy estimates that 80 to 160 GW more VPP capacity will be needed by 2030, and those millions of connected devices could provide 10% to 20% of the additional demand on the grid. 

Holden, Papanastassiou and other speakers at the webinar explored the opportunities and obstacles facing VPP expansion, looking at residential and commercial and industrial programs as well as new electric vehicle-managed charging and vehicle-to-grid (V2G) programs. 

An enthusiastic proselytizer for residential VPPs, Papanastassiou reeled off a list of benefits. Like traditional central power plants, they are dispatchable and reliable and can provide not only fast-response for peak demand, but also grid support services, he said.  

“There are a lot of flavors of what a VPP could be,” Papanastassiou said. “But at its heart, it’s this notion that customers and devices are providing flexibility to the grid in a really valuable and harmonized way.” 

He pointed to a demand management and energy conservation project EnergyHub worked on with Ontario’s grid operator, IESO. With upfront incentives and “a really robust, multichannel marketing effort,” EnergyHub helped enroll more than 100,000 smart thermostats in a VPP that delivered 134 MW of power during a peak demand event.  

Carter Wood, who works on electric vehicle policy at Ford Motors, said the automaker continues to partner with utilities, such as DTE in Detroit, on managed charging and bidirectional, V2G programs. But he cautioned that VPPs based on EV batteries are a different value proposition from VPPs aggregating smart thermostats or other home appliances that cost considerably less. Scale will be linked to EV adoption rates.  

Ford, like other automakers, has slowed its plans for rolling out new EV models. Carter said its F-150 Lightning electric pickup truck is its only model offering bidirectional charging that can be tapped for backup power or potential grid support. But as EV adoption scales, EV-based VPPs could supplant natural gas peaker plants, he said.