The Future of Electricity Consumption and Grid Modernization: A Closer Look at Virtual Power Plants

Electricity consumption in the United States is on the rise, with a 2% jump in 2024 and expectations for continued growth. The Department of Energy estimates that an additional 200 gigawatts of resources will be needed by 2030 to meet the increasing demand. However, the current transmission infrastructure is insufficient, with the National Electrical Manufactures Association stating that the grid needs to be doubled by 2030 and possibly tripled by 2050.

To address this issue, a technological solution has emerged in the form of Virtual Power Plants (VPPs) powered by distributed energy resources (DERs) located behind-the-meter. VPPs combine small-scale DERs like rooftop solar and battery systems to operate as a single large-scale generation asset. The DOE predicts that between 80 and 160 gigawatts of additional VPPs will be operating by 2030, providing a more efficient and cleaner alternative to traditional generation methods.

State regulators and utilities are increasingly embracing VPP technology, with over 500 VPPs operating in the U.S. by the end of 2024. Companies like Sunrun and Rocky Mountain Power are expanding their VPP programs to include thousands of customers and provide backup energy to the grid during peak demand periods. The market for VPPs is expected to grow significantly, with Grand View Research projecting a compound annual growth rate of 22.3% from 2025 to 2030.

Overall, VPP technology is seen as a crucial tool in modernizing the power grid and transitioning to cleaner energy sources. With the ability to deploy new VPPs in less than six months and the integration of AI technology, VPPs are becoming a key component in ensuring grid reliability and resilience in the face of increasing electricity demand.