According to a new report from RMI (formerly Rocky Mountain Institute), VPPs (Virtual Power Plants) may prevent up to 28 million tons of carbon emissions by 2035.
As an efficient solution to energy grid sustainability and decarbonization, VPPs use advanced software and communication technologies to manage, optimize, and coordinate the output of distributed energy resources (DERs), like electric vehicles (EVs), rooftop solar panels, smart thermostats, and other smart home devices, such as appliances, televisions, and smart lights.
VPPs enroll device owners in a way that offers them financial rewards for helping smooth the peaks in electricity demand and contributing to efficient grid operations. As an example, demand response aggregators (like Meltek) perform as VPPs to help consumers receive money for saving energy during peak times, while helping balance the supply and needs of the grid overall.
Apart from consumers and utilities, VPPs also help shift electric demand to cleaner and more affordable electricity systems.
In the new report, the authors created a detailed model of a Mountain West grid and a nationwide network of VPPs for the year 2035. They compared the results of that model to a portfolio without VPPs (their baseline portfolio) and concluded that VPPs can reduce costs and carbon emissions while maintaining reliable grid operations.
VPP demand flexibility could reduce 2035 US emissions by 12–28 million metric tons, 2%–4% of project power sector emissions, the researchers found.
In addition, compared to the baseline, the VPP-enabled portfolio further reduces carbon emissions while saving 20% in generation costs — an average of $140 per household per year.
Many utilities say VPPs can lower energy bills for consumers in addition to reducing emissions. Research suggests that leveraging distributed sources during peak demand is up to 60% more cost-effective than relying on gas plants.
On the path to a cleaner energy system, everyone plays an essential role. A key advantage of VPPs is that they transform consumers from passive users into active participants in the energy ecosystem. Traditionally, customers only receive and consume electricity. Within a VPP system, they both consume power and contribute it back to the grid. This dual role can improve their understanding of the grid and get them more invested in the transition to clean energy. By making energy a two-way interaction, VPPs create a more engaged and energy-conscious community.
VPPs offer a powerful solution to the dual challenges of grid resilience and decarbonization. By harnessing distributed energy resources, VPPs not only lower carbon emissions and reduce reliance on traditional gas peaker plants, but also create financial incentives for consumers and lower costs for utilities.
With the Department of Energy aiming to expand VPP capacity from 80 to 160 GW by 2030, their role in the clean energy transition is set to grow, driving both environmental and economic benefits while empowering consumers to take an active part in shaping a cleaner and more efficient energy future.
