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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.

Virtual power plants near prime time

Electric grid

<p>Big-name energy players are putting real money into virtual power plants.</p>

Virtual power plants near prime time

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