Unlocking Virtual Power Plants: Affordable, Reliable, and Sustainable Energy for All

Unlocking Virtual Power Plants: Affordable, Reliable, and Sustainable Energy for All

Spencer Harrison Spencer Harrison
4 minute read

Virtual power plants may be one of our most important energy resources.

Virtual power plants (VPPs) are the future of energy. A virtual power plant is a collection of small-scale energy resources like thermostats, electric vehicles (EVs), appliances, batteries, and solar arrays. When these devices are aggregated and coordinated, they can provide many of the same energy services (capacity, energy, ancillary services) as a traditional power plant.

The benefits of VPPs are numerous and far-reaching. They can help regulators, utility planners or operators, and other grid stakeholders address key challenges facing the grid, including reliability, affordability, decarbonization, electrification, and health and equity. With VPPs, we can create a more resilient, efficient, and sustainable energy system that benefits everyone.

One of the most exciting things about VPPs is their potential to provide reliable energy during extreme weather events. From California to Texas to Puerto Rico, we’re seeing the risks of extreme weather and other reliability and resilience threats in every part of the country. VPPs are already helping provide resilience when the grid is down, and offer numerous other unique reliability benefits that traditional power plants do not. They can be built and deployed rapidly and can turn electric devices into resilient power supplies for homes and critical facilities/homes during grid outages.

More affordable energy for everyone

In addition to their reliability benefits, VPPs can also help make energy more affordable for everyone. With increasing inflation and volatile natural gas prices, customers need affordable energy solutions more than ever. Homes and businesses that participate in VPPs receive direct compensation, and those that do not still experience lower bills resulting from deferred transmission, distribution, and generation capacity investments that typically get passed on to customers. VPPs can further reduce wholesale energy and fuel costs by shifting demand away from high-cost peaking resources and toward low- or no-marginal-cost resources.

VPPs can also play a critical role in decarbonizing our energy system. The power of VPPs to create more efficient grid use can go a long way in reducing CO2 emissions. And the climate benefits of VPPs will only increase over time as the United States deploys more electric devices, brings more variable renewable energy online, and retires coal generation. By 2050, VPPs could avoid 44–59 million metric tons of CO2 per year.

VPP's are becoming increasingly important

As we move towards a more electrified future, VPPs will become increasingly important. They enable cost-effective electrification by avoiding transmission, distribution, and generation capacity bottlenecks and providing customers with additional revenue streams to incentivize the adoption of electric technologies. Enrolling in a VPP enables the devices already in peoples’ homes and businesses to actively participate in powering their communities and contribute to demand flexibility during times of increased load.

Finally, VPPs can also help improve health and equity outcomes. We increasingly rely on aging fossil fuel power plants to meet demand during peak hours — plants that have been tied to significant adverse health outcomes that have an outsize impact on Black and low-income populations. VPPs present an opportunity to avoid adverse health impacts by decreasing reliance on fossil fuel-powered generators.

NeoCharge's is on a mission to optimize home energy usage via software and hardware solutions.

At NeoCharge, we believe that VPPs are one of the keys to unlocking a more sustainable and equitable energy future. We are working on ways to help optimize home energy usage with software to interconnect EVs, homes, and the electrical grid to benefit everyone. We are here to help you go fully electric while reducing your energy costs and contributing to a cleaner, more reliable grid. You deserve to go fully electric and we are here to do that with our new software platform coming soon and our 240V Smart Splitters for home EV charging installation.

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