Energy Policy Now

Virtual power plants can help electric grid operators address supply shortages and reliability concerns, but policy support is needed.

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The U.S. electrical grid is under growing stress, raising concern that recent widescale power outages may signal more grid challenges to come. In recent years, electricity demand has grown at an accelerating pace while, at the same time, power supply has tightened as existing power plants have retired and grid operators have struggled to bring new sources of power online.

Yet one promising solution to the grid’s challenges may already be in place, if grid operators and regulators can figure out how to use it to full advantage. ‘Virtual power plants’ can combine small, distributed energy resources such as rooftop solar and demand response into a single, virtual whole that grid operators can deploy like a traditional powerplant. VPPs hold the promise of delivering large amounts of readily available and reliable energy services, if a number of regulatory and technological challenges can be overcome.

On the podcast Ryan Hledik, a principal with electricity market consultancy The Brattle Group, explores the potential of virtual power plants. He explains how VPPs work, discusses hurdles to their development, and considers policy solutions to speed their growth.

Ryan Hledik is a principal with electricity market consultancy The Brattle Group.

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Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu

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