Above, former Energy Secretary Jennifer Granholm describes how aggregating small batteries at homes and businesses, (as well as rooftop solar, smart thermostats, and other “Distributed Energy Resources” – DERs) is a quick, cheap and effective way to not only power new demand, like Data Centers, but gain the social license and community support to do so.
Such an arrangement is called a “Virtual Power Plant”, and energy experts have been clamoring for decades for utilities to start using them. Now with the desperation to meet new demand from Data Centers, and deep pocketed hyperscalers willing to meet some, or all, of the costs, it’s finally happening.
Voltus will aggregate new capacity from local businesses and homes into a Google-funded Virtual Power Plant. When the grid is under strain, Voltus signals those sites, which then can use batteries, smart thermostats, industrial process adjustments and other flexible assets to reduce energy use.
Voltus then delivers financial benefits, such as bill savings and direct payments, to participating customers, turning Google’s capacity demand into real economic benefits for PJM customers. A recent report from The Brattle Group predicts U.S. consumers could save more than $100 billion over the next decade through better grid utilization.
The New York Times reports that “Each of these tweaks frees up only a small amount of power on its own. But by aggregating them across thousands of businesses and homes,” and that the new capacity can be brought on line much more quickly than conventional power plants.
Deploying batteries on the distribution grid helps improve resiliency and lowers costs for everyone, not just participating customers. Batteries can support grid reliability year-round and help utilities defer distribution system upgrades, pushing off the need for infrastructure upgrades funded by ratepayers. Recent reports from The Brattle Group have projected that virtual power plants could reduce electricity bill increases for households by more than 50% over the next five years, and better grid utilization could save U.S. consumers more than $100 billion over the next decade.
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The Industry news letter Utility Dive reported that “Such contracts signal a turning point for distributed resources in energy markets,” and compared them to the importance of power purchase agreements which have accelerated the uptake of wind and solar energy. The report said that VPPs can put a downward pressure on electric rates as well.