A group of heavy hitters, including Ford, General Motors, Google Nest, OhmConnect, Olivine, SPAN, SunPower, Sunrun, SwitchDin, and Virtual Peaker, has formed a coalition that aims to scale up the market for virtual power plants in a bid to increase the resiliency of the grid and help decarbonize the electric sector.
Virtual power plants, or VPPs, are a logical next step in tapping the full potential of the many electric vehicles, home energy storage systems, solar arrays, smart thermostats, etc., which will soon become the norm instead of outliers, in order to enhance the resiliency of the grid. However, as VPPs are a nascent technology, there is still a big need for the development of good standards and policies to truly scale it up and move the needle on grid decarbonization.
The new organization, which is led by the Rocky Mountain Institute, is named the Virtual Power Plant Partnership, or VP3, and is funded by its founding members as listed above. The intent of VP3 is to work to “catalyze industry and transform policy to support scaling VPPs,” and to that end, the coalition will be working closely with businesses that are leading in such sectors as EVs, residential energy systems, building controls, software providers with utility-facing solutions, and more.
“Virtual power plants are poised for explosive growth, and RMI is committed to being at the forefront of their success by launching VP3. Our analysis shows that VPPs can reduce peak power demand and improve grid resilience in a world of increasingly extreme climate events. A growing VPP market also means revenue opportunities for hardware, software, and energy-service companies in the buildings and automotive industries. For large energy users, VPPs can significantly reduce energy spend while providing new revenue streams.” — RMI CEO Jon Creyts
According to RMI, the goals of VP3 are:
With the guidance and support of its members, VP3 is working toward a future where businesses, households, and communities are empowered through VPPs which can help to support cost-effective energy, emissions reductions, and a more resilient electricity grid.
To achieve this, VP3 will work to:
- Catalog, research, and communicate VPP benefits
- Develop industry-wide best practices, standards, and roadmaps
- Inform and shape policy development
By pooling together large numbers of decentralized energy resources, such as electric cars, home energy storage systems, electric water heaters, solar arrays, “smart” electric heating systems and more into a single portfolio, these virtual power plants can put those energy assets to work stabilizing the grid, improving electricity affordability, and increasing energy independence. As Mark Mark Bole, GM VP and Head of V2X and Battery Solutions, said, “Virtual power plants present an exciting opportunity to unlock additional value for homes, businesses and communities, helping to drive greater energy independence and grid decarbonization.”
With the use of the right hardware and some advanced software, plus the permission of the customers (the owners of those distributed energy resources), a VPP can “adjust charging, discharging, output, and demand from DERs in response to signals from markets and grid operators. In this way, VPPs can play an important role in seamlessly and efficiently matching energy supply and demand.”
According to RMI, by the year 2030, virtual power plants “could reduce peak demand in the United States by 60 GW. That number could grow to more than 200 GW by 2050.”
Find out more about VP3 here.
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