Texas Leads the Way in Virtual Power Plants, Promising Savings and Efficiency for Energy Consumers.

Texas is a proving ground for the development of virtual power plants (VPP) due to its unique electric grid, independent of other states and deregulated, making it a market-based approach to energy generation and transmission. VPPPs are defined by their distributed and connected nature, using smart software to control a variety of connected energy assets such as rooftop residential solar, battery energy storage, smart heating and cooling, and appliances. Homeowners with eligible VPP assets are compensated for exporting power or reducing use during electricity demand events throughout the year. Stuart Page, senior consultant, Department of Energy (DOE) Loans Program Office, suggested that VPP providers should adopt an opt-out model, where customers are automatically enrolled in the program when they buy a smart device like a thermostat or a home battery. The biggest barrier to adoption has been the creation and implementation of a standardized VPP program, which many states lack. The report suggests that doubling the current scale of VPPs could address 10-20% of peak demand, avoiding about $10 billion in annual grid costs, and much of the money would benefit participating consumers.