Virtual power plants (VPPs) are flexible and quickly deployable resources that are poised to address some of the most pressing, interconnected challenges of our electricity grid: growing loads, a retiring conventional generation fleet, and the need for rapid deployment of new, utility-scale renewable generation. Power Shift: How Virtual Power Plants Unlock Cleaner, More Affordable Electricity Systems shows how distributed technologies, aggregated into virtual power plants, can reduce emissions and costs for ratepayers by managing peak demand, reducing the need for expensive, emissions-intensive gas generation, and unlocking renewable portfolios.

In Power Shift, we find that:

• VPPs reduce costs by 20% and emissions by 7%, when they are fully included in planning and operations in a case study of a representative power system. In this system, portfolios that use VPPs avoid 75 percent of new gas units and enable 200 MW of additional renewables in 2035.
• In 2024, VPPs across the country could shift demand to avoid 1.5 to 7.3 million tons of carbon dioxide emissions. By 2035, VPPs can avoid 12 to 28 million tons, or two to four percent of projected US power sector carbon emissions.

We also identify four key conditions that electricity systems need to meet for realizing VPPs’ potential impacts:

• Distributed energy resources continue to deploy and VPP enrollment accelerates across the country;
• VPP capabilities, program design, and customer experience support regular, responsive VPP dispatch;
• VPPs have accurate, timely signals about grid conditions and carbon emissions; and
• Grid decision makers evaluate, plan for, and realize the full value of VPPs, including avoided transmission and distribution costs.

Power Shift provides a vision for what’s possible for VPPs in grid planning and operations, and points toward key conditions and initial actions policymakers, utilities, and VPP platforms can make to support VPPs in realizing their potential impacts. Regulators, utility decision makers, and grid policymakers can use Power Shift’s insights to ensure their grid is unlocking cleaner, more affordable electricity systems with VPPs.

Download our methodology document here.