Virtual Power Plants Could Save California Utilities and Consumers $550M per Year

Research reveals VPPs could meet 15% of peak demand – 5x the existing capability – by using commercially available technologies to provide affordable and reliable power

BERKELEY, Calif., April 11, 2024 /PRNewswire/ -- GridLab, a non-profit that provides comprehensive technical expertise to policy makers, advocates and other energy decision makers, released its latest report, California's Virtual Power Potential: How Five Consumer Technologies Could Improve the State's Energy Affordability, conducted by The Brattle Group.

The report explores the market potential for Virtual Power Plant (VPP) deployment in California, identifying all cost-effective VPP capacity that could be realized through achievable, voluntary participation by 2035.

Examining 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), the report highlights VPPs' potential to reduce customer utility bills and mitigate current energy challenges by harnessing current technological advancements.

Key findings include:

• 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.
    • That is roughly five times larger than the 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 – they can be "built" essentially as quickly as customers enroll.
  • VPPs can scale flexibly as demand grows, mitigating risks due to unprecedented uncertainty in electricity demand forecasts.

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."

"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." 

For more insights, please download the full summary report here.

About GridLab
GridLab is an innovative non-profit that provides technical grid expertise to enhance policy decision-making and to ensure a rapid transition to a reliable, cost effective, and low carbon future. For more information, please visit www.gridlab.org.

About The Brattle Group
The Brattle Group answers complex economic, finance, and regulatory questions for corporations, law firms, and governments around the world. We are distinguished by the clarity of our insights and the credibility of our experts, which include leading international academics and industry specialists. Brattle has 500 talented professionals across four continents. For more information, please visit www.brattle.com.

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SOURCE GridLab and The Brattle Group