Virtual Power Plants Do More Than Aggregate: They Empower

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The Intertubes lit up like a Christmas earlier this month, when Elon Musk introduced the world to virtual power plants. Virtual power plants are actually not a new thing, though it may have seemed that way considering all the fuss. Still, it was nice to see the high-profile purveyor of rolling energy storage units focus attention on VPPs. That’s because VPPs can benefit low-income households, including those who cannot afford an electric car, rooftop solar panels or home battery systems.

Virtual Power Plants 101

For those of you new to the topic, a virtual power plant is just what it says. Instead of a large, centralized power plant, you ask individual rate payers in a given area to contribute whatever energy they can generate or store to the grid, when needed.

For small scale rate payers, the generating is typically done by rooftop solar panels. The energy storage part can be filled by EV batteries and building-mounted batteries.

Another key element of virtual power plants is their ability to shift electricity demand. Even without the power-generating angle, VPPs perform a valuable service by asking rate payers — through a carrot, stick, or both — to shift their energy consumption away from the highest-use periods of the day, onto other hours.

If all goes according to plan, VPPS can shave down electricity consumption during peak periods. Otherwise, a new gas-powered peaker plant would be needed to fill peak demand, which would be expensive. And it would contribute to global warming. And you would have to find a place to put it.

In past years, coordinating the activity of individual rate payers was difficult. Nowadays software can get the job done.

Virtual Power Plants Are Old Hat

Virtual power plants have not gone mainstream yet, but they are on the way. The leading solar and energy storage firm SunPower, for example, launched a massive VPP project in New York City back in 2016, and Sunrun joined the VPP club in 2020.

Utilities have also begun eyeballing workplace EV charging and other programs to shift the EV charging load around. That includes the ERCOT grid management agency in Texas. ERCOT already has at least one vehicle-based VPP under its wing through the firm (currently for load-shifting only, not vehicle-to-grid operations).

The missing piece is to integrate EV charging into VPP systems with vehicle-to-grid or vehicle-to-home charging. That, too, is already beginning to happen. Earlier this spring, for example, the global clean tech firm Nuvve Holding Corp. hooked up with Swell Energy Inc. to pull electric vehicles into the VPP mix for residential and commercial rate payers.

“This collaboration will expand opportunities for residential customers to combine battery storage, solar, and smart EV charging into a comprehensive home energy system. These advanced optimization capabilities cater to both residential consumer energy use and EV transportation needs,” Swell explained.

EV Charging & VPPs, Perfect Together

The new hookup involves Nuvve’s grid-connected building energy management services and it proprietary GIVe™ (Grid Integrated Vehicle) cloud-based software platform. GIVe provides for two-way, vehicle-to-grid operation, meaning that EV owners can use their EV battery to contribute electricity to the grid when needed.

Swell’s contribution is the GridAmp™ energy resource management system for distributed energy resources, including small-scale assets like rooftop solar panels and building-mounted batteries.

The system “maximizes DER value for utilities by simultaneously delivering multiple grid services to the utilities in its VPP networks and offering utility customers GridRevenue™ payments for participating in the virtual power plants,” Swell explains, adding that the addition of smart EV charging supports an “electrified future where customers have greater control of their assets, opportunities to transact with the power grid, and have dependable energy resources available around the clock.”

What Is Missing From This Picture?

If you spotted the pieces that are still missing, run right out and buy yourself a cigar. While some VPP participants stand to make at a little bank (“opportunities to transact with the power grid”) off their solar and EV assets, most low- and middle-income households are mainly left in the dark.

The income issue has been a persistent obstacle for rooftop solar adoption, mainly due to bottlenecks involving rented properties and multi-family housing, in addition to financial hurdles. Environmental justice issues factor in as well. Those same elements also impact the ability to purchase an electric vehicle, and they limit opportunities to charge up at home.

The EV part of the VPP equity puzzle will take some time to solve, but meanwhile the US Department of Energy has been seeking ways to bring more rooftop solar power and other forms of solar to low- and middle-income households. Virtual power plants could be part of the solution, and that’s where a new VPP from a non-profit energy agency called MCE comes in.

The MCE Angle On Equity & Renewable Energy

As described by MCE, the new virtual power plant is part of the city of Richmond, California’s “Advanced Energy Community project,” funded with a $3 million assist from the California Energy Commission. In addition to the new VPP, the program includes energy-efficient rehabs for abandoned homes.

The new VPP “will provide bill savings and increase local grid reliability, safety, and efficiency for low-income residents,” MCE explains.

If all goes according to plan, there will be a significant load shift out of the 4 p.m. – 9 p.m. peak hours, resulting in significant cuts to utility bills for as those participating in the VPP are rewarded for their contribution of valuable grid services.

The overall project is a soup-to-nuts energy equity and affordability program:

“MCE’s Virtual Power Plant will include smart, clean energy technologies including energy storage, smart thermostats, rooftop solar, heat pump space and water heating, and EV charging. The VPP will initially be connected to up to 100 Zero Net Carbon Homes (ZNC Homes) and larger commercial and industrial sites. The ZNC Homes program will finance the acquisition, complete rehabilitation, and re-sale of homes as affordable properties.”

“These ZNC homes will be built to be energy efficient and resilient, and each home will have a full complement of smart appliances and cost-saving equipment, including rooftop solar, battery energy storage, and heat pumps,” MCE adds. “Local businesses will also have an opportunity to install batteries that provide resilience to grid outages, bill savings, and revenue generation potential.”

We’ll know more after 2025, when the project is supposed to launch.

For those of you keeping score at home, the project developer is ZNE Alliance, with other partners including MCE and ALCO Building Solutions, Ecoshift Consulting, Energy Solutions, mPrest, Richmond Community Foundation, THG Energy Solutions, TRC, and ZGlobal.

Why Richmond?

One-fifth of Richmond households “live in poverty,” according to MCE, which is double the average for the city’s home county of Contra Costa. It also outruns the California state average for households under the CARE discount assistance program, at 37% compared to 25%.

If the Richmond plan succeeds, it could be a model for other communities with high rates of public assistance to transition their housing stock to energy efficiency technology and renewable energy.

ZNE Alliance is a nonprofit organization that has a portfolio of energy equity programs operating around the state, including a similar Advanced Energy Community initiative in Lancaster, climate initiatives in the San Francisco region, and a statewide fleet electrification and planning initiative.

Follow me on Twitter @TinaMCasey.

Image: Solar panel array courtesy of MCE.

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Tina Casey

Tina specializes in advanced energy technology, military sustainability, emerging materials, biofuels, ESG and related policy and political matters. Views expressed are her own. Follow her on LinkedIn, Threads, or Bluesky.

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