The need for low-cost generation capacity in California is growing. At the same time, California consumers are adopting clean, flexible technologies such as smart thermostats, electric vehicles, and batteries at a rapid rate. Virtual power plants (VPPs) combine these technologies across participating customers to create a resource that can reduce, shift, or generate electricity when needed. By providing these services to the power system, VPPs can make significant contributions to grid reliability while directly compensating those consumers who participate.

In a new report prepared for GridLab, Brattle analysts estimate the market potential for VPP deployment in California. The authors find that VPPs could create consumer savings of $550 million per year in California, and California’s VPP potential will exceed 15% of peak demand (5x the existing capability) by 2035. New policies and other activities could facilitate the achievement of California’s VPP potential by driving innovation in areas that currently are limited by a variety of technical, regulatory, economic, and market barriers.

The full report, “California’s Virtual Power Potential: How Five Consumer Technologies Could Improve the State’s Energy Affordability,” was authored by Principal Ryan Hledik, Energy Research Associate Kate Peters, and Energy Analyst Sophie Edelman.

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