GM, Ford, Google, and Solar Energy Producers Partner to Promote ‘Virtual’ Power Plants

A group of leading companies, including GM, Ford, Google, and solar energy producers, have announced that they would work together to establish standards for scaling up the use of virtual power plants (VPPs) to ease loads on electricity grids during shortages. The initiative, called the Virtual Power Plant Partnership (VP3), will be hosted by the energy transition nonprofit RMI and will also aim to shape policy for promoting the use of the systems.

VPPs pool thousands of decentralised energy resources like electric vehicles or electric heaters controlled by smart thermostats. With permission from customers, they use advanced software to react to electricity shortages, using techniques such as switching thousands of households’ batteries, like those in EVs, from charge to discharge mode or prompting electricity-using devices, such as water heaters, to reduce their consumption.

The 2021 Inflation Reduction Act in the United States has created or enlarged tax incentives for electric cars, electric water heaters, solar panels and other devices whose output and consumption can be coordinated to smooth the load on the grid, thereby positioning VPPs for explosive growth in the United States.

Potential environmental impact:

VPPs can reduce peak demand on the electricity grid by pooling thousands of decentralised energy resources, such as electric vehicles and electric heaters, and using advanced software to react to electricity shortages. By reducing peak demand, VPPs can help to improve grid reliability and avoid blackouts. Additionally, by coordinating the output and consumption of devices like electric cars, electric water heaters, and solar panels, VPPs can help to make the grid cleaner and greener. According to RMI estimates, by 2030 VPPs could reduce U.S. peak demand by 60 GW, the average consumption of 50 million households, and by more than 200 GW by 2050. This will help to mitigate the stress on grid infrastructure, enable the integration of more renewable energy sources and enable more sustainable energy consumption patterns.