Virtual Power Plants Are A Hidden Revolution In The Making

For several years, "virtual power plant" has been just one more poorly defined and poorly understood concept at the bleeding edge of the energy industry. But while most of us have considered VPPs only in vague musings about the distant future, Sunrun and others have been putting ideas to work.

When Sunrun turned on their residential VPP in 2022 we were interested, but our focus remained on "regular" power plants. Now, with this milestone, Sunrun has reminded us that VPPs are more than just a thought experiment. But Sunrun has only just scratched the surface.

It is easy to underestimate the potential impact of virtual power plants. Solar and energy storage scales very easily down, and the vast majority of solar/storage facilities are tiny and distributed. The vast majority of these tiny, distributed facilities are essentially unmanaged and therefore contribute only a small portion of their potential value to the grid.

Sunrun has pioneered a path to unlocking this value. This will only become more important over the next several years. As solar and battery prices continue to drop, and small (and distributed) solar/storage installations become more ubiquitous, the amount of trapped value will skyrocket.

And that's without even addressing the batteries in electric vehicles.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Morten A. Lund
Foley & Lardner
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UNITED STATES
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