The pathway to:
Virtual Power Plants Commercial Liftoff
With electricity demand growing for the first time in a decade and fossil assets retiring, deploying 80-160 GW of virtual power plants (VPPs)—tripling current scale—by 2030 could support rapid electrification while redirecting grid spending from peaker plants to participants and reducing overall grid costs.
Between 2023 and 2030, the U.S. will need to add enough new power generation capacity to supply over 200 GW of peak demand;1 were the U.S. to follow a path towards 100% clean electricity by 2035, new capacity needs could nearly double.i In all scenarios, the mix of weather-dependent renewable generation will be unprecedented, leading to more variable electricity supply and higher demand for transmission capacity. Transmission interconnection backlogs, which have stretched to an average of five years, pose potential resource adequacy challengesii. Large-scale deployment of VPPs could help address demand increases and rising peaks at lower cost than conventional resources, reducing the energy costs for Americans – one in six of whom are already behind on electricity bills.
The U.S. Department of Energy, in partnership with other federal, state, and local agencies, has tools to address challenges to commercial liftoff and is committed to working with communities and the private sector to build the nation’s clean energy infrastructure in a way that meets the country’s climate, economic, and environmental justice imperatives.