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A virtual power plant (VPP) is a software-coordinated group of distributed energy resources—such as batteries, rooftop solar, electric vehicles, and controllable building equipment—that works together to support the electric grid. It is not one physical power station: its combined devices can shift electricity use, store or supply power, and provide grid services.
What is a virtual power plant?
The U.S. Department of Energy’s Loan Programs Office defines VPPs as “aggregations of distributed energy resources (DERs) such as rooftop solar with behind-the-meter batteries, electric vehicles (EVs) and chargers, electric water heaters, smart buildings and their controls, and flexible commercial and industrial loads that can balance electricity demand and supply and provide utility-scale and utility-grade grid services like a traditional power plant.”
The key is coordination: many separate devices are managed as a portfolio. A VPP may include equipment in homes, businesses, and other locations rather than a single generating facility. It can combine resources that produce or discharge electricity with resources that adjust when or how much electricity they consume.
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How does a VPP work?
An operator, often called an aggregator, uses software and control systems to coordinate enrolled devices. When the grid needs support, it can call on available resources to respond together. For example, batteries may discharge, EV charging may be shifted to a less constrained period, or controllable building equipment may reduce electricity use temporarily.
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- INSTALLS IN CIRCUIT PANEL of most homes with clamp-on sensors. Supports Single phase, Single-split phase, and 2-wire systems. 3-wire systems; 3-phase, 4-wire Wye systems with earthed (TN or TT) neutral (no-Delta) are supported with an additional 200A sensor (sold separately).
- 24/7 ENERGY MANAGEMENT AND MONITORING: Automate, manage and control your home's real power anywhere, anytime to prevent costly repairs, conserve energy, and save costs. Monitor solar / net metering. PROTECTED BY A 1-YEAR WARRANTY.
- LOWER YOUR ELECTRIC BILL: Configure settings in the Emporia Energy App to automate energy management for time of use, peak demand, excess solar, and rewards programs. You can even see live reporting and invaluable savings opportunities instantly. Gauge real-time spending and get actionable notifications and automated energy management to help you reduce costs.
- REAL-TIME ENERGY DATA: REQUIRES 2.4 GHz WIFI WITH AN INTERNET CONNECTION to monitor energy use with iPhone / Android / Web app. Vue sensors collect energy data and are accurate from ±2%. The Vue is UL and CE Listed for your safety. 1 second data is only available in the app (when actively open) and retained 3 hours. Minute and hour data are retained in the cloud. 1 minute data is retained 7 days, 1 hour data is retained indefinitely. Export cloud data whenever you want in the app.
Those actions can help balance supply and demand, reduce peak demand, or provide other grid services. The response is not necessarily electricity generation: using less power at a critical time can also contribute. FERC describes an aggregator as bundling smaller distributed resources so the combined resource can meet applicable market participation rules.
Resources a VPP may coordinate
- Energy supply and storage: rooftop solar, behind-the-meter batteries, and other battery storage.
- Flexible electricity use: EV charging, electric water heaters, smart thermostats, and building controls.
- Other distributed resources: thermal storage, efficiency measures, and flexible commercial or industrial loads.
Whether a particular device can participate depends on the VPP and local rules. Owning a battery, smart thermostat, or EV charger does not by itself mean it is enrolled in a VPP.
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- ⚡ ENERGY MONITORING ANYTIME, ANYWHERE: Monitor your home's real power anywhere, anytime to prevent costly repairs, conserve energy, and save costs. Monitor solar / net metering. Light commercial 3 phase option available as a separate bundle. Protected by a 1-year warranty.
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How is a VPP different from a traditional power plant?
A traditional power plant is a physical facility that generates electricity. A VPP is a coordinated aggregation of separate resources, which may generate or discharge power, shift consumption, or reduce demand. The VPP’s combined response can provide services at utility scale, but its composition and capabilities depend on the devices enrolled and the conditions under which they can be operated.
Can VPPs participate in electricity markets?
In the United States, FERC Order 2222, issued in 2020 and updated by Orders 2222-A and 2222-B in 2021, aims to enable aggregations of distributed energy resources to participate in wholesale markets operated by regional transmission organizations and independent system operators. Under applicable rules, the aggregator is generally the direct market participant; it may share compensation with resource owners according to their contracts.
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Order 2222 does not apply in ERCOT, which is outside FERC jurisdiction and has its own distributed-energy-resource integration pilot. Participation also depends on market and local implementation rules. Requirements can address aggregation size and location, metering and telemetry, and coordination among the market operator, aggregator, distribution utility, and local regulators. Existing retail programs may affect wholesale participation or compensation to avoid paying twice for the same service. Check current local rules and program terms rather than assuming a VPP is available in a particular area.
What could VPPs mean for the grid?
The U.S. Department of Energy’s 2023 estimates put current U.S. VPP capacity at 30–60 GW. DOE projected that tripling capacity could bring it to 80–160 GW by 2030, potentially addressing 10–20% of peak demand and saving about $10 billion in annual grid costs through avoided generation, deferred infrastructure, and less use of peaker plants. These are national estimates and projections, not measured guarantees or promises of household savings.
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A separate regional projection summarized by FERC in its 2024 demand-response assessment estimated that California could have more than 7,500 MW of VPP potential—over 15% of peak demand—by 2035. The Brattle Group projection also estimated approximately $750 million in annual avoided power-plant investment, with around $550 million retained by consumers. These are modeled future estimates, not observed VPP capacity or a forecast of what an individual participant will receive.
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VPP offers can differ by provider, location, and program. FERC advises consumers to compare offerings and consider contract arrangements carefully. Review these details before enrolling:
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- SAFETY YOU CAN TRUST WITH UL CERTIFICATION: With Emporia Energy, your home energy monitoring is safe, reliable, and certified. The Emporia Vue is UL Listed, meaning it has met rigorous safety standards for electrical products in the U.S. and Canada. This certification ensures that every component has been thoroughly tested to prevent hazards, such as overheating, short-circuiting, or fire, offering you peace of mind as you manage your home’s energy consumption.
- INSTALLS IN CIRCUIT PANEL of most homes with clamp-on sensors. Supports Single phase, Single-split phase, and 2-wire systems. 3-wire systems; 3-phase, 4-wire Wye systems with earthed (TN or TT) neutral (no-Delta) are supported with an additional 200A sensor (sold separately).
- 24/7 ENERGY MANAGEMENT AND MONITORING: Automate, manage and control your home's real power anywhere, anytime to prevent costly repairs, conserve energy, and save costs. Monitor solar / net metering. PROTECTED BY A 1-YEAR WARRANTY.
- LOWER YOUR ELECTRIC BILL: Configure settings in the Emporia Energy App to automate energy management for time of use, peak demand, excess solar, and rewards programs. You can even see live reporting and invaluable savings opportunities instantly. Gauge real-time spending and get actionable notifications and automated energy management to help you reduce costs.
- REAL-TIME ENERGY DATA: REQUIRES 2.4 GHz WIFI WITH AN INTERNET CONNECTION to monitor energy use with iPhone / Android / Web app. Vue sensors collect energy data and are accurate from ±2%. The Vue is UL and CE Listed for your safety. 1 second data is only available in the app (when actively open) and retained 3 hours. Minute and hour data are retained in the cloud. 1 minute data is retained 7 days, 1 hour data is retained indefinitely. Export cloud data whenever you want in the app.
- Eligibility: Confirm your location, utility, and specific devices qualify.
- Control and dispatch: Understand when the aggregator can operate equipment, adjust charging, or request reduced consumption, and what control rights you grant.
- Compensation: Check how payments or credits are calculated, when they are issued, and whether they depend on performance or availability. National grid-cost estimates do not establish what a household will be paid.
- Existing programs: Ask whether enrollment affects net metering, a utility demand-response offer, or another retail program.
- Technical requirements: Check for required meters, telemetry, communications, compatible controls, and reliable connectivity.
- Contract terms: Review duration, exit conditions, and how the aggregator may use your equipment.
Rules and offers vary across jurisdictions, and device compatibility is program-specific. A product category may be relevant to VPPs without being approved for a particular local program.
Why aren’t VPPs available everywhere?
VPPs must coordinate resources across technical and institutional boundaries. DOE points to fragmented implementation and inconsistent approaches to evaluating, integrating, and compensating VPPs. FERC’s market rules also require coordination among multiple parties, while local eligibility, metering, telemetry, and retail-program overlap can affect whether a resource can participate. As a result, the definition is broad, but the practical offer—and its terms—are local.
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