After nearly two decades of stagnation, US electricity demand is surging, driven by growing numbers of electric cars, data centers and air conditioners in a warming climate. But traditional power plants that generate electricity from coal, natural gas or nuclear energy are retiring faster than new ones are being built in this country. Most new supply is coming from wind and solar farms, whose output varies with the weather.
A growing resource Virtual power plants aren’t new. The US Department of Energy estimates that there are already 30 to 60 gigawatts of them in operation today. A gigawatt is 1 billion watts – roughly the output of 2.5 million solar photovoltaic panels or one large nuclear reactor. As smart thermostats and water heaters, rooftop solar panels and batteries enable more customers to participate in them, DOE estimates that virtual power plants could triple in scale by 2030. That could cover roughly half of the new capacity that the US will need to cover growing demand and replace retiring older power plants. This growth would help to limit the cost of building new wind and solar farms and gas plants.
Customer demand is typically assumed to be a given that fluctuates with the weather but follows a fairly predictable pattern over the course of a day. To satisfy it, grid operators dispatch a mix of baseload sources that operate continuously, such as coal and nuclear plants, and more flexible sources such as gas and hydropower that can modulate their output quickly as needed.
In Vermont, Green Mountain Power is offering its customers incentives to install batteries that will provide power back to the grid when it’s needed most. In Texas, where I live, deadly blackouts in 2021 highlighted the importance of bolstering our isolated power grid. Now, utilities here are using Tesla Powerwalls to help turn homes into virtual power sources. South Australia aims to connect 50,000 homes with solar and batteries to build that country’s largest virtual power plant.
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