Virtual power plants near prime time
Big-name energy players are putting real money into virtual power plants.
Driving the news: PG&E is testing two VPP models in California: one with Tesla that's grown to 33 MW, another with Sunrun that's aiming for 30 MW.
- Sunrun, meanwhile, tapped startup Lunar Energy to manage its growing VPP network.
- Voltus this week launched a VPP program in Illinois with Resideo, Google Nest and Ecobee. It says it expects capacity to reach about 20 MW by the end of the year.
- Texas residents in January began enrolling in a pilot VPP program. Tesla, Octopus Energy, and startup David Energy are among the companies participating. (Sunrun's fingerprints are also on the program.)
Of note: VPP startup Swell raised a $120 million Series B in November.
Catch up fast: VPPs enable grids to draw energy from resources like solar- and battery-equipped buildings to ease load during peak demand. VPPs serve as power networks minus the large and expensive infrastructure.
- The Federal Energy Regulatory Commission helped clear the way for VPPs in September 2020. Order 2222 enables them to be compensated for the services they provide to the grid.
- The Inflation Reduction Act, meanwhile, includes tax credits for assets like rooftop solar and EVs, which can be incorporated into VPPs.
Yes, but: It's early days yet. There are just 21 VPPs in the U.S. larger than 30 MW, per Wood Mackenzie. Only seven are bigger than 100 MW.
By the numbers: The largest is 1.1 GW, operated by Olivine for Commonwealth Edison.
- The next two are 500 MW and 300 MW. Details on those VPPs are confidential, Wood Mackenzie tells Axios.
What we're watching: Smart thermostats that can be controlled remotely, and EVs whose batteries can provide power to the grid when plugged in, are both key technologies for VPPs.
- Google Nest and GM are among the companies backing "VP3," a program from nonprofit RMI aimed at expanding VPPs.
- VPPs offer another potential revenue stream for companies. Or at least a way to trim energy costs. We'll be interested to see how this program and others potentially accelerate corporate uptake.