You are most likely familiar with the concept of a power plant, an industrial facility where energy is created, typically using fossil fuels such as oil or coal. But as the world has learned about the negative impact that burning these materials has on the environment, and as power needs across the U.S. have surged, a new type of power source is emerging: the virtual power plant (VPP). These networks of green energy have a big future in the U.S. and are already helping the country reduce emissions and improve grid reliability.
They are called “virtual” because these plants are not located in one giant facility like their fossil fuel counter parts. Instead of a literal “plant,” a VPP is a connected aggregation of various distributed energy resource (DER) technologies, which refers to things like residential solar panels that generate renewable energy, and battery storage near the site of generation. These relatively small technologies located at homes and businesses are then pooled together into a large group, a VPP, enabling them to provide significant contributions to the electricity grid and offset the amount of power needed from traditional power plants.
These systems are becoming increasingly popular. It’s not news that solar panel sales have soared in recent years, but now energy storage is gaining traction as well. In fact, a third of new behind-the-meter solar systems installed by 2025 are expected to incorporate energy storage, according to the Department of Energy. Overall, $110 billion is expected to be invested in DERs by 2025.
Solar energy and batteries are only part of the virtual power plant puzzle. Energy efficient appliances and buildings, electric vehicle charging, and thermal energy are also considered DERs and help contribute to the system of lessening grid reliance.
The primary purpose of a VPP is to lessen the amount of energy needed from the grid to avoid catastrophes like blackouts when energy demand is exceedingly high. In recent years, the U.S. has entered a grid reliability crisis. Energy usage is growing faster than the infrastructure, meaning demand is often too high. As a result, adverse grid events have become a lot more common, causing dangerous power loss in Texas and places across the country.
With VPPs, the frequency of these disasters can be significantly reduced. With consumer consent, a VPP can remotely control these off-grid energy technologies to shift consumption to different times of day when demand isn’t as high or redirect energy from batteries and redistribute to other locations, lowering overall grid demand. Texas, who has been hit by some of the worst blackouts in recent years, is planning to expand it’s VPP network to help improve its grid reliability. And by 2030, VPPs in the U.S. could lessen peak demand by 60 gigawatts, the average consumption of 50 million homes, according to the Rocky Mountain Institute.
As the popularity of virtual power plants grows, and as new incentives make solar panels and battery storage more affordable for home and business owners, there’s a massive opportunity. In addition to helping avoid grid disasters, these VPPs are becoming a bigger part of our energy ecosystem and can help reduce the need for traditional power plants and fossil fuels overall. They could be a powerful tool in the U.S. path to net zero.
To learn more about VPPs, watch this fun video from Verge Science which illustrates how they work using Sim City 2000!
Want to learn more about how your business can access technology that will help the journey to net zero emissions? Contact one of Budderfly’s energy experts today.