Virtual Power Plants Are Springing Up Across the Country

by Swell Energy
Energy

Solar powered battery storage enables renewable energy to be available on demand and, when aggregated and managed en masse, can serve as dispatchable virtual power plants (VPPs) that have societal benefits including reducing dependence on traditional fossil power plants and improving grid resiliency. By orchestrating thousands of distributed energy resources like residential solar and energy storage systems, VPPs reduce grid stress and the need for building new costly and carbon-intensive energy infrastructure. As grids and consumer needs change, VPPs can be a savvy development tool by local grid operators to invest in the evolving grid. As a result, VPPs are springing up across the country because utilities are finding value in their broad capabilities and services.

  • In Vermont, electric utility Green Mountain Power has a VPP that has deployed 17 MW of battery storage in customer homes since the program launched in 2019. By discharging batteries during monthly and annual peak times, GMP reduces the payments it owes to the grid operator, which amounted to $3 million for the first three quarters of 2020, and approximately $2 million in 2021.
  • Utilities benefit from distributed energy because they can place it where it is needed most on the grid. In 2020, 37% of California's battery storage power capacity was procured in response to a utility need created by the Aliso Canyon Natural Gas Storage Facility leak in October 2015. The storage capacity is helping utilities address the resulting reliability risks from constraints on the natural gas supply.
  • In Utah, electric utility Rocky Mountain Power is leveraging a virtual power plant at an apartment complex for demand response. When complete, the planned community's 22 buildings will have 600 apartment units with 12.6 MWh of battery storage, 5.2 MW of solar panels, 150 stalls of EV chargers and an overriding focus on energy efficiency.

Areas with new home development and growing electricity demand can deploy a VPP to service new homes in the territory, lowering demand on the central grid—especially during times of high demand like heat waves. This load management service reduces the frequency of peak stress incidents and supports surrounding transmission and distribution grid infrastructure by preventing equipment overload.

VPPs offer a compelling way for homeowners and utilities to collectively meet today’s shifting energy needs by unlocking the potential of solar energy stored within a home battery or another resource that can be used to address grid needs. While utilities deploy more VPPs, these resources are catching the attention of Wall Street as a new investment opportunity. At the height of the pandemic’s economic recession, the financial resilience of renewables was celebrated as “largely uncorrelated to oil and natural-gas markets, which further strengthen[s] their overall appeal,” and they continue to be a haven for investments.

Today, Swell Energy’s VPPs with leading utilities take on a battery-centric approach though future VPPs may utilize electric vehicles, water heaters, thermostats and other smart energy technologies that can guarantee access to a certain amount of power. This could even include televisions and refrigerators as smart devices and smart homes become more common. By triggering these devices to turn their energy use down, VPP technologies can also leverage energy-consuming devices and tap the potential of the over 29 million devices in American homes. By first understanding the power of VPPs today, we can begin to imagine the opportunities they present in the future.

Find out more about Swell’s VPPs on our Home Page and in our Press Room.