The United States could cut power system costs by $10 billion per year and cover 10 to 20% of its peak electricity demand by replacing “peaker” generating stations with virtual power plants, the U.S. Department of Energy concludes in a report issued last week.
The U.S. could achieve that by “roughly tripling” virtual power plant (VPP) capacity to between 80 and 160 gigawatts by 2030, Utility Dive reports.
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Today’s VPPs in the U.S. mostly consist of demand response programs, Utility Dive explains. That’s where grid customers agree to cut back their electricity consumption when demand is highest, usually in exchange for a share of the dollars the utility saves by not switching on their most important peak power sources. But VPPs can also include a mix of other local, distributed energy resources (DER) like energy storage, rooftop solar, and electric vehicle batteries.
Last week’s report shows how reliance on those sources could grow in the years ahead.
“DOE expects a surge in annual DER additions from 2025 to 2030, including 20 GW to 90 GW of demand capacity from EV charging infrastructure and 300 GWh to 540 GWh of storage capacity from EV batteries,” Utility Dive writes. It foresees annual gains of 20 to 35 gigawatts from distributed solar and fuel-based generators, five to six gigawatts of flexible demand from smart thermostats, smart water heaters, and non-residential DER, and up to 24 GWh of capacity a year from stationary batteries.
“Rather than viewing the massive adoption of EV and other DERs just as load to serve, utilities and regional grid operators can view this as an opportunity to increase the flexibility of the grid and more efficiently use existing resources and infrastructure,” DOE wrote. Citing a May report by The Brattle Group, the agency says reliance on VPPs could cost utilities 40% less than utility-scale battery storage—and an astounding 60% less than a gas peaker plant.
“Besides their financial benefits, VPPs can increase grid resilience, cut greenhouse gas emissions and air pollution, reduce grid congestion, and empower communities,” Utility Dive writes, citing the report.