Supplemental Report on Utility VPPs

Driven by consumer demand, distributed energy resources (DERs) are set to grow by over 170 GW in the next five years. Virtual power plants (VPPs) are low-cost, nimble, and rapidly deployable mechanisms to integrate DERs into the grid in an affordable and reliable manner to address rapid load growth.

However, a major barrier to scaling VPPs is metering and telemetry. The scaling of VPPs across the United States is stifled by onerous or inconsistent metering and telemetry requirements that vary across regions, stringent rules around the usage of pre-approved hardware, and limited data availability that constrains the scope of VPP participation.

This report is intended to educate and provide decision-making support for regulators, utilities, and other policymakers responsible for advancing VPP rules and policies by:

• Explaining the importance of the VPP metering and telemetry issue
• Exploring five metering and telemetry approaches, and how they compare based on deployment history, affordability, reliability, fairness, and future proofing
• Suggesting actionable recommendations and considerations for grid operators and regulators as they update metering and telemetry requirements for DERs and VPPs

Through detailed research into business practice manuals of grid operators, and interview insights from members of RMI’s Virtual Power Plant Partnership based on their experiences engaging in various US ISO markets, this report also provides a high-level synopsis of the current requirements for metering and telemetry, and the associated challenges to be addressed.

In addition to examining metering and telemetry barriers in wholesale market-participating VPPs, a companion report on utility VPPs focuses on those VPP programs in which the utility is the offtaker or purchaser of services provided by the VPP. This companion report:

• Provides an overview of how utility VPPs operate, including the key entities involved and their roles

• Describes the metering and telemetry approaches commonly used in utility VPPs

• Outlines the key technical, operational, and policy issues that affect maturity of utility VPPs

• Identifies practical actions to advance metering and telemetry practices in utility VPPs

While metering and telemetry requirements have not been as frequently cited as a barrier to VPP deployment in utility VPPs, continued evolution and standardization can allow utility VPPs to provide additional grid services, further advancing reliability and affordability.