Demand response programs shrank in 2022, according to new data from the EIA.gov 861 survey of electric utilities and power marketers. Demand response incentives and enrollees fell slightly year over year. Total energy savings were up, but still below their pre-covid level:

The 861 survey does not prompt for Virtual Power Plants specifically, presumably most are rolled into these demand response estimates. If you’d like to discuss these trends, please reach out or reply to this email (EIA.gov 861 Tables 10.3 and 10.4, thanks to Jumana Al Hashal)

New FTC rule requiring easy “click to cancel” for subscription services may require utilities to streamline disenrollment and switching across demand response programs (Utility Dive)

ERCOT looks to redouble its demand response efforts as bid to reboot shuttered power plants fails (Utility Dive)

Profiles of several residential VPPs in Texas from Sunnova, Tesla and Octopus (Houston Chronicle)

Profile of Soleil Lofts, a Colorado-based VPP (Utility Dive)

Profile of Puget Sound Energy’s VPP with AutoGrid that plans to expand to 100 MW by 2025 (Latitude Media)

Union Square Ventures, the investor behind Leap, David Energy and Ostrom, published a thesis on “power electronics,” using software and specialized transistors to control voltage at the device level (USV.com)

VPP Platform Announcements

OhmConnect announced its partnership with SunPower in the California DSGS has provided 1.2 MWh and 400 MW of average capacity with 94% device participation since August (press release)

Leap announced it has surpassed 175K customer meters and 1 GW of load from 75 partner companies. The VPP platform also announced $4mm in new funding, now $60mm in total (Latitude Media, funding announcement, capacity announcement)

Schneider Electric is spinning off AutoGrid and combining it with its portfolio company Uplight, which provides software to utilities (Latitude Media, press release)

Google is spinning off its energy savings service, Nest Renew, and combining it with OhmConnect, a portfolio company of Google’s Sidewalk Investment Partners (The Verge)

New Startup

Hum Energy, an app that helps homeowners earn money by enrolling their energy devices into VPP programs, built on top of VPPdata.com (Hum Energy, X thread)

New VPP Programs

Public comments from a Davis, CA community organization recommend installing a VPP in the Village Farms Project, an upcoming housing development (DavisVanguard.org)

Chatham, MA is considering a VPP in partnership with solar developer Nexamp, according to public comments (Cape Cod Chronicle)

Chicago’s utility, ComEd, is planning a virtual power plant according to a public filing from the Illinois Commerce Commission (Illinois.gov PDF)

The Colorado PUC is pushing Xcel Energy to launch a new VPP by this summer (Utility Dive)

Polestar, an electric vehicle brand by Volvo, announced it would be testing V2G VPPs in California and Sweden (World-Energy.org)

See all 94 active and 27 planned VPPs in the public database.

Thank you to the readers who have submitted VPPs. If you would like more detail on any programs or to submit new programs, message me via LinkedIn or X or reply to this email.

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VPP News

Three VPP operators published their summaries of summer dispatch events, all metrics and case studies focus on demand response (AutoGrid, EnergyHub, OhmConnect)

How your child’s school bus might prevent blackouts (New York Times, thanks Prem Patel)

Interesting post on X by Jigar Shah (X)

Tesla’s new VPP in Puerto Rico could become the world’s largest (Electrek)

Volvo launches new business unit to promote bi-directional charging (Electrek.com)

Volvo is also launching a vehicle-to-grid pilot program to test technology on the local energy grid in real-case scenarios in Gothenburg, Sweden, where the company has its headquarters.

A VPP Reading List by Clint Chan (Miro.com)

VPP Insiders interview with Doug Middleton from Leap (Youtube)

Webinar featuring Jen Downing (DoE LPO) and Susan Gladwin (DoE LPO) (Auto-Grid.com)

New VPP Programs

12 new VPP programs added to the database. Now tracking 127 programs in 23 states

Open/Upcoming Programs

The Colorado PUC is currently exploring VPP pilots, taking comments from aggregators and OEMs (Commission Filings, thanks Nicholas Garza Foss)

An article from Sept 2022 suggests PacifiCorp will expand its Wattsmart home battery program from Utah to Idaho, California, Oregon and Washington State (CleanTechnica)

Discussion on X of sonnen and FEW Nexus developing an upcoming Michigan VPP program at Veridian, an upcoming 160-unit housing development (X)

Closed Programs

Holy Cross Energy developed a pilot for Basalt Vista, an affordable housing project in CO, with batteries, solar, heat pumps and EV chargers back in 2020 (HolyCross.com)

SDG&E developed a pilot for Shelter Valley near San Diego for single-family homes with existing solar, providing them batteries, thermostats and water heaters. The program was contracted in 2021 and is approved to run through 2023 (press release)

See all 93 active and 23 planned VPPs in the public database.

Thank you to the readers who have submitted VPPs. If you would like more detail on any programs or to submit new programs, message me via LinkedIn or X or reply to this email.

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VPP News

Details on Tesla’s VPP performance in CA from a former PG&E VPP Analyst (Tegus)

• Tesla believes their VPP payments will eventually increase 5X: “right now [powerwall owners] are on a fixed price of $2 for a kilowatt-hour and eventually, they want to move ahead and they think that this price can reach in some cases like $5 and $10. And I think that is where we want to make the most impact for the customer and also get a percentage of it. 10% of $10 or $5 would be $0.5 or $1, and that is where they think if they dispatch like 31 megawatts or 50 megawatts or 100 megawatts, that's when they can think they can earn a lot of chunk”

• Long-term Tesla targeting a 10% take rate for customer VPP earnings

• Tesla’s VPP scale: Expert cites 70-80K powerwalls in CA, of which 10-15% are enrolled in the VPP, of which half participate in the VPP at any given time

• Tesla’s CA battery market share: Tesla started with 70% battery share a few years ago, now closer to 60% share, with LG Chem the next largest OEM

• Read full interview

New IEEE paper: Machine learning infused distributed optimization for coordinating virtual power plant assets (arXiv.org)

VPP Insiders - Utility Perspective with Adam Light, DERMS Practice Lead at TRC (Youtube)

New VPP Programs

5 new VPP programs added to the database. Now tracking 115 programs in 24 states

Open/Upcoming Programs

Colorado utility, Platte River Power, approved an upcoming VPP consisting of EVs, batteries and demand response with an estimated 74 mW enrolled / 33 mW achievable by 2030 (public filing, Coloradoan)

Los Angeles Cleantech Incubator’s Clean Energy Partnership announced 165 mW VPP in advance of the 2028 Olympic Games (LAIncubator.org)

Schenectady Community Virtual Power Plant announced an upcoming program last year in partnership with ecoLong (The Daily Gazette)

Generac won $50mm DoE grant for new VPP in serving lower-income homes in MA (press release)

Closed Programs

Sustainable Westchester, an NY based CCA, announced the sonnenCommunity New York Virtual Power Plant in 2021. According to the CCA website, the pilot appears to be closed (Westchester Magazine)

See all 86 active and 17 more planned VPPs in the public database

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VPP News

Netherlands based startup Skoon raises $5.6mm for a VPP-connected DER rental marketplace (Axios)

VC-backed startup Haven Energy announces VPP program in California (Solar Power World)

Solar stocks tumble to 3-year low following SolarEdge demand warning (CNBC)

Funding and Grant Announcements

DoE - $50 million for the Distributed Energy Systems Demonstrations Program (Energy.gov)

Database Additions

9 new VPP programs added to the database, now 108 programs in 23 states

Upcoming

Luma Energy Battery Emergency Demand Response Program (Puerto Rico) - Residential and commercial pilot (enroll page, program details)

MCE Virtual Power Plant Program (CA) - Incentives for solar, battery and heatpumps for low-income residents in Richmond, CA (press release)

Launched in 2023

CEC Demand Side Grid Support - DSGS (CA) - Wholesale program providing incentives for demand response and BTM storage to CAISO dispatch events. Market interface provided by Olivine (enroll page)

Flip Energy (CA) - VPP aggregator enrolled into DSGS (enroll page)

Ford+Duke Energy EV Complete Home Charging Plan (NC) - V2G pilot (enroll page, press release)

Nimiipuu Virtual Power Plant (ID) - Nez Perce Tribe pilot program installing Tesla powerwalls (newsletter, press release)

Launched before 2023

APS Cool Rewards (AZ) - Thermostat demand response program (enroll page, press release)

Liberty Utilities Battery Storage Program (NH) - Pilot program from 2018 offering $25 per battery per month financing for a Tesla Powerwall, in exchange for occasional discharge services. Does not appear to be extended (enroll page, article)

PearlX Project Flexifornia (CA) - Multifamily solar & battery VPP partnering with PG&E and SCE (press release)

Thank you to the readers who have submitted VPPs. Submit new VPPs to me on LinkedIn or X or reply to this email.

VPP Jobs

GE - Research Engineer – Electric Power Systems - Vernova Research (Niskayuna, NY)

PearlX - Data Scientist (Charlottesville, VA)

Puget Sound Energy - Supv Grid Management Technology (Redmond, WA)

Tesla - Program Operations Manager, Virtual Power Plant (Palo Alto, CA)

Submit new VPP roles to me on LinkedIn or X or reply to this email.

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The public database of U.S. VPPs is available here

Background

The goal of this database is to track all Virtual Power Plant (VPP) activity in the United States - all planned, active and ended pilots and programs and their VPP software platforms, trade allies, and incentives offered.

The key question I want to answer is: what are the earnings available to battery buyers who enroll into VPP programs? I believe this is the most important issue because the faster the payback period on a new battery, the better the investment case, and the more batteries that will be purchased and enrolled into VPP programs. 

The public database is available in Google Sheets here. 

I compiled this data from utility websites, press releases and regulatory filings in October 2023.

Note: this is an early draft and an incomplete list of programs. I’m releasing it now to gather feedback and refine the process for identifying and classifying VPPs. With a good playbook in place for documenting VPPs, I can scale the effort with additional researchers and grow this database significantly. 

Please send any comments, feedback, additions or subtractions me on LinkedIn or X or leave a comment in the database.

Key Takeaways

Notwithstanding the above limitations, the following insights stuck out to me:

1. Earnings available to households enrolling their home batteries into a VPP program vary significantly, Rhode Island at the high end is paying 10x per kW of capacity than New York at the low end.

   

2. Several states offer battery owners significant compensation for enrolling into VPPs, making the investment case for new batteries highly attractive. Households in Rhode Island, Massachusetts and Connecticut can earn more than $200 per year per kW of capacity. This likely represents a sub-10 year payback period, even before tax and other incentives outside of the VPP program. This also excludes the energy cost savings of a home battery as a component of a solar energy system, and the benefit of having a backup power supply during power outages.

3. States with higher electricity prices pay more to VPP participants. Households in RI, MA and CT can earn more than $200 per kW of capacity for batteries enrolled in VPPs, where electricity prices are about twice the national average.

4. VPP Operator partnerships with trade allies are a strategic advantage in winning VPP contracts with Utilities and Community Choice Aggregations (CCAs). For example, in 2021, the Clean Power Alliance (CPA), a California based CCA, replaced Olivine with AutoGrid as it brought a stronger network of trade ally partnerships. From the CPA public hearing regarding their pilot with Olivine:

   Lesson Learned
   Customer acquisition challenges were significant during the pilot, especially for commercial customer segments. Access to information regarding existing installed customer DER technology is limited, making targeted outreach challenging. Customers with previously installed technologies were less likely to participate in Demand Response which would require modifying existing operating procedures. While trade ally partnerships can help address acquisition challenges, negotiating trade ally partnerships on an ad hoc basis through the pilot was complicated and inefficient.

5. Opposition from utilities remains a significant blocker. In 2018, the City of New Orleans approved then canceled a VPP program with Voltus after pushback from its utility Entergy

6. Still other programs continue to expand. Green Mountain Power in Vermont recently lifted its cap on its Bring Your Own Device program.

Definitions and Limitations

I define a virtual power plant as a system of Distributed Energy Resources (DERs) like batteries, solar panels, HVAC systems and appliances that can be remotely controlled and provide energy or reduced demand to the grid during periods of peak load.

VPPs in this database typically consist of a Utility or CCA (e.g., PG&E) partnered with a VPP Operator (e.g., AutoGrid), partnered with a Trade Ally (e.g., Generac). When possible, I counted each Utility-VPP Operator-Trade Ally combination as a separate VPP as incentive schemes can vary depending on the specific Trade Ally. Focusing on incentive scheme levels enables analysis of the ROI / payback period for batteries and thus allows us to understand what VPP programs are the most financially attractive and viable to new members.

So far this database is based on publicly available information from VPP program and trade ally websites, press releases, and regulatory filings. The hope is this list will initiate conversations with more parties in the VPP community and expand and improve upon this list.

The columns in the database are defined as follows:

• Program Name: The public or consumer facing name of the VPP program for consumers, trade partners and C&I partners to enroll

• Program URL: the consumer facing website hosting information and enrollment instructions for VPP participants. The domain is usually the Utility/CSA or the Trade Ally.

• Utility/CSA: the electricity retailer partnered who hosts the VPP program

• VPP Platform: the software platform administering the demand response actions of the DERs enrolled into the program. For example, AutoGrid, EnergyHub, Olivine, Stem

• Trade Allies: any DER retailers/brands who partner with VPP programs to recruit participants. For example, Tesla, Generac, SolarEdge, sonnen

• DERs: the types of DERs available to be enrolled into the VPP program. For example, home batteries, solar, thermostats, heat pumps

• Sector: whether the VPP program is focused on Residential households or Commercial and Industrial (C&I) particpants.

• Date Announced: the earliest date announced of the VPP program

• State/Region: the geographic area of the VPP. Note many VPPs are only available in certain areas of their state

• Status: whether the VPP program is Active, Planned or has Ended

• Enrolling: whether the VPP program is still enrolling new customers

• Auto-enroll: whether DER owners have been enrolled into the program by default

• VPP Capacity: the amount of capacity reported

• Battery Incentive: the following columns are used the calculate the earnings available to Residential home battery owners, where applicable. In cases where different incentives are offered for new vs existing batteries, the incentive for newly installed batteries was selected. This is to better analyze the question of where is the highest ROI for the marginal battery.

  • Upfront: payment per kW for enrolling into a VPP program that is not contingent on a certain number of years enrolled

  • Annual: annual payment per kW for enrolling into a VPP program. Incentives from programs offering an “upfront payment” but requiring muli-year commitment are included in this column on an average annual basis

  • Discharge: payments from VPP programs that offer compensation per unit discharged to the grid

  • Estimated Annual $: estimated annual earnings per kW to households enrolled in VPP programs assuming a 5 year term length and 25 hours per year of discharge into the grid

• Press release: press release or coverage of the announcement of a VPP program

• Notes: any VPP program specific comments

• Regulatory Filings: where available, public record discussion of the VPP program

With appreciation

I’m new to virtual power plants and owe a great deal to those who created valuable public resources and others who spent time teaching me about the space.

Public resources:

• The Brattle Group - Real Reliability, The Value of Virtual Power

• DER Task Force

• DER/VPP Reading List

• DoE - Liftoff Report

• The Meow Energy

• RMI - Virtual Power Plants, Real Benefits

Individuals:

• Ruben Arredondo, Regime Energy Partners 

• Severin Borenstein, UC Berkeley

• Matthew Chester, Chester Energy and Policy

• Jen Downing, DoE Loan Programs Office

• Rick Enos, Solite Energy Solutions

• Scott Moura, UC Berkeley

• Michael Murray, Mission:data Coalition

• Carson Paiva, SunPower

• Shannon Rivers, East Bay Community Energy

• Ryan Reber, Voltus

Feedback

I plan to continually add to and improve this database. Once I can confirm I have a good playbook for identifying and classifying VPPs, I can bring on additional researchers and scale this effort significantly. 

Please send any additions or feedback to me on LinkedIn or X or leave a comment in the database.

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