Coalition of Big Tech and Auto Brands Aims to Set Virtual Power Plant Standards

Major brands in the tech and auto industries, including Google, Ford and General Motors, along with solar energy companies, like SunPower and Sunrun, have joined a coalition led by global energy transformation nonprofit Rocky Mountain Institute (RMI). The mission of this Virtual Power Plant Partnership (VP3)? To standardize and create policies for virtual power plants.

Virtual power plants are designed to aggregate energy and distribute it to consumers that rely on a grid. Decentralized distributed energy resources (DERs) are placed into a portfolio, and consumers can adjust the energy demand and supply of things like EVs and EV chargers, smart thermostats and other home devices and appliances, solar panels and battery storage to alleviate pressure on a grid or act as additional power sources.

Essentially, with consumers’ permissions, all of these DERs communicate with each other and the grid. During peak demand, EVs might schedule charging for another time, or smart devices could supply more energy to the grid when supply isn’t meeting demand. Everything works together as one large, dispersed power plant.

As The Verge reported, this setup can help minimize risk of power outages during times of high energy demand. Additionally, virtual power plants can help make the grid more resilient to extreme weather, incorporate more clean energy sources and save consumers money on energy costs.

Virtual power plants are a growing market with a lot of potential. They could reduce peak demand in the U.S. by 60 GW by the end of this decade and by over 200 GW by 2050, RMI estimated. 

“The next 12 to 24 months are critical for policy and program development to seize the potential offered by virtual power plants, and VP3 is here to ensure that the energy transition doesn’t miss a beat,” Mark Dyson, RMI managing director for carbon-free electricity, said in a statement.

While the technology to build virtual power plants already exists, the coalition noted that policy, regulations and markets are the current challenges to scaling up. Reuters reported that many places have already experienced the benefits of virtual power plants, including Australia and Germany. California customers have avoided blackouts through virtual power plants as well. 

Expanding these systems could provide benefits to more communities. As such, the coalition’s goals are to catalog, research and share the benefits of virtual power plants; develop standards and roadmaps for the industry; and ultimately help policies around virtual power plants to accelerate their growth.

“Three core barriers stand in the way of VPP long-term growth: wholesale market rules, retail utility offerings, and consumer and policymaker awareness,” RMI stated in its report, Virtual Power Plants, Real Benefits. “Once these core barriers are addressed, more VPP businesses will have access to reliable revenue streams from utilities or wholesale markets, and customer-acquisition and grid-integration costs will fall. VPP businesses, in turn, will be able to provide highly compelling offerings to households and businesses.”