‘Virtual power plants’ poised to grab California market share — study

By Brian Dabbs | 04/11/2024 06:45 AM EDT

New research explores how smart thermostats and electric vehicle charging could give the state’s grid a boost.

A Tesla Powerwall attached to a home.

A Tesla Powerwall attached to a home. Tesla

Virtual power plants could serve more than 15 percent of peak electricity demand in California by 2035, saving roughly $750 million annually in power system costs, according to a new report from the Brattle Group.

The study, prepared for the GridLab consultancy and shared with POLITICO’s E&E News, focuses on commercially available technologies such as smart thermostats, electric vehicle charging and “grid-interactive” water heating. Only voluntary participation in VPP programs is needed to reach the market potential identified by Brattle, researchers said in the study.

Virtual power plants, a decarbonization priority for the Biden administration, use software to link together electrical equipment and appliances at different locations to manage electricity demand and potentially distribute unused energy throughout the network. VPPs could provide nearly 7,700 megawatts of power in California by 2035, the Brattle report found. That’s enough electricity to power millions of homes.


Still, new policies in California are necessary to deliver a 15 percent market share by 2035, according to Ryan Hledik, a principal at Brattle. The study’s findings could be useful across the United States.