We still can’t agree on how to scale VPPs

Maeve Allsup | Source: Latitude Media | Posted 09/27/2024

When it comes to foundational questions about how VPPs should operate — such as who should administer and manage programs, what services VPPs should provide, and how customers should be compensated — the market is riddled with approaches that seem to pull in opposite directions.

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The power industry sees virtual power plants (VPPs) as holding significant potential for enhancing grid distribution and resilience. However, key operational questions like program administration, service provision, and customer compensation lack consensus, hindering market progress. While there's a shared long-term vision of versatile device control and demand flexibility, the current absence of a clear pathway hampers VPP development. Stakeholders highlight the crucial need for answers to fundamental VPP elements to enable large-scale deployment in the future.

Various industry perspectives diverge on the implementation and scalability of VPPs. For instance, while some advocate for utilities' integrated use to enhance grid efficiency, others, like Sunrun, emphasize the success of simplified, non-integrated VPP models. Moreover, innovative approaches focusing on leveraging existing homeowner assets, such as smart thermostats, seek to activate resources efficiently. Addressing regulatory, incentive, and business model challenges is crucial to advancing VPPs from niche value propositions to dependable, scalable grid resources, ensuring alignment with diverse market demands.

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We still can’t agree on how to scale VPPs

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