Virtual power plants could really help California meet peak demand

Ensync Smart home

New research reveals virtual power plants (VPPs) could meet 15% of peak demand – 5x the existing capability – by using commercially available technologies to provide affordable and reliable power. That analysis comes via GridLab, a non-profit that provides comprehensive technical expertise to policy makers, advocates and other energy decision makers.

The group’s latest report, California’s Virtual Power Potential: How Five Consumer Technologies Could Improve the State’s Energy Affordability, conducted by The Brattle Group, is a deep dive into market potential for VPP deployment in California, identifying all cost-effective VPP capacity that could be realized through achievable, voluntary participation by 2035.

The report examines five commercially available technologies …

  • smart thermostat-based air-conditioning control,
  • behind-the-meter batteries,
  • residential electric vehicle charging,
  • grid-interactive water heating, and
  • automated demand response systems for large commercial buildings and industrial facilities)

… and the potential to reduce customer utility bills and mitigate current energy challenges by harnessing these via VPPs.

Amid California’s challenges in securing affordable new generation capacity, the study affirms VPPs as a viable solution to enhance grid reliability, reduce energy costs, and support the state’s transition towards a more sustainable and resilient energy system.

“In the face of rapidly rising utility bills across the state, this report shows the tremendous potential of VPPs to provide affordable, clean generating capacity as well as critical support for grid reliability,” said Ric O’Connell, Executive Director of GridLab. “VPPs can play an important role in helping California achieve its goal of 100% clean electricity by 2045.”

Cost savings: By 2035, VPPs could create consumer savings of $550 million per year in California.

Real reliability: California’s 2035 VPP market potential is over 7,500 MW, representing over 15% of peak demand. To put that in perspective: That is roughly five times larger than the demand response (DR) capacity currently used for resource adequacy. It is significantly larger than the capacity of the largest power plant in California, and higher than the total system peak demand of Los Angeles.

Reduced risk: VPPs will reduce risks associated with interconnection delays because they can come online as quickly as customers enroll.  VPPs can scale flexibly as demand grows, mitigating risks due to unprecedented uncertainty in electricity demand forecasts.

“Barriers to achieving VPP potential still remain, but our study shows that initiatives to overcome those barriers will be well worth the effort,” noted the study’s lead author, Brattle Principal Ryan Hledik. “At achievable levels of participation and with technologies that are commercially available today, the potential impact of VPPs in California’s energy transition over the coming decade is simply too big to ignore.” 

Head here for more insights from the report.

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