Energy-saving networks called 鈥渧irtual power plants鈥� are linking batteries, solar panels and smart devices in a growing number of homes across the US 鈥� but they face obstacles to reliably reducing electricity demand.
鈥淵ou can create this massive resource that is really valuable to the grid,鈥� says at Renew Home, a new company that plans to switch on what it says will be the largest such residential network in North America later this year. The firm is a merger between Google鈥檚 smart home device Nest and OhmConnect, an energy software company.
If customers using Nest and OhmConnect smart home devices opt in, Brown says Renew Home could control 3 gigawatts of electricity demand across 鈥渕ultiple millions鈥� of homes later this year. For comparison, an average nuclear reactor supplies about 1 gigawatt of power.
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In homes that choose to connect, the virtual power plant can shift power usage from HVAC systems, electric water heaters or EV batteries by a few minutes, without impacting their overall function. These small shifts across many devices can flatten the peak. 鈥淭hey can individually change their temperature in their house anytime they want鈥� without affecting the network鈥檚 reliability, Brown says. 鈥淭hat鈥檚 the benefit you have when you bring millions of households together.鈥�
Virtual power plants don鈥檛 generate energy in the same way regular power plants do, but they serve a similar function by orchestrating thousands or even millions of energy resources. Some work by shifting energy usage to lower demand, while others connect networks of batteries or rooftop solar panels to add power to the grid.
They are expanding in the US at a crucial moment, as energy-intensive data centres proliferate and the adoption of electric vehicles and heat pumps is accelerating. Tripling the capacity of virtual power plants by 2030 could address up to 20 per cent of the projected rise in peak electricity demand from these sources, according to a 2023 by the US Department of Energy. This could save billions of dollars and avoid ramping up production at gas power plants, reducing emissions.
Virtual power plants have been around for decades, says 聽at RMI, an energy think tank in Colorado that is connect to the grid. But in recent years, more have come online to help evenly distribute intermittent supplies of electricity from wind and solar power. One of the world鈥檚 largest, located in South Australia, 聽outfitted with rooftop solar panels and batteries.
The US currently has between 30 and 60 gigawatts of virtual power plant capacity, according to the Department of Energy report. Most link commercial electricity users, such as data centres or factories. Residential networks are also growing as more people install backup power batteries, solar panels or smart devices.
By 2030, Brown says Renew Home aims to control 50 gigawatts by partnering with the makers of power-hungry devices that customers are already buying, such as electric water heaters. Leap, another operator, recently exceeded 1.5 gigawatts of management in the US, according to a representative.
But it is unclear whether electric utilities and governments will embrace virtual power plants, says at the Union of Concerned 杏吧原创s, an advocacy group. Connecting these networks to ageing grids set up for electricity to flow in one direction is complicated. And despite some , not everyone is convinced these networks will consistently reduce energy use. 鈥淭he pause people may have is that these are customer-sided devices,鈥� says聽McEvoy. 鈥淲hat if everyone opts out all at once?鈥�
These networks鈥� growing importance to the grid may also add to risks around customer privacy or security of the power system. Brown says this is an important concern, but adds Renew Home only uses customer data to optimise energy use, and customers always maintain control of the system.
