Grid-Scale Virtual Power Plants are Here. Have Utilities Noticed?

This policy brief by RMI argues that virtual power plants (VPPs)—aggregations of distributed energy resources like batteries and smart thermostats—have reached a scale capable of replacing traditional power plants but are not being adequately integrated into utility long-term planning. The document highlights that while VPPs are increasingly mentioned in regulatory filings, they are often not modeled as selectable resources on an equal footing with conventional generation, leading to a risk of inefficient grid overbuilding.

• Virtual power plants (VPPs) have reached capacities that meet or exceed those of traditional power plants, such as the average 180 MW combustion gas turbine in the United States. Examples include California's Demand Side Grid Support (DSGS) program, which reached 1,145 MW as of October 2025, and National Grid's ConnectedSolutions in Massachusetts, which grew to 227 MW and shaved 375 MW from the New England grid during a June 2024 heat wave.
• VPPs provide tangible reliability and cost-saving benefits to both bulk power and distribution systems. During the 2025 summer heat dome in the eastern United States, EnergyHub shed 900 MW of peak load and shifted 3.5 GWh of energy. On the distribution level, National Grid's 2024 Grid Modernization plan indicated that VPP programs could feasibly defer at least two feeder expansion projects for five years each.
• Despite their growth, VPPs are not fully accounted for in utility integrated resource plans (IRPs) and distribution system plans (DSPs). A primary shortfall is that VPPs are often not evaluated as a 'selectable resource for expansion' with detailed capital and operating costs, but are instead assigned fixed rates of expansion that ignore their economic potential.
• Utility planning often excludes various VPP value streams, such as their ability to mitigate distribution system upgrades or support grid stability. This lack of comprehensive cost-benefit analysis may lead utilities to build redundant substations or generating assets at the expense of customers.

APA

RMI (2026). Grid-Scale Virtual Power Plants are Here. Have Utilities Noticed? https://rmi.org/resources/grid-scale-virtual-power-plants-are-here-have-utilities-noticed/

Chicago

RMI. Grid-Scale Virtual Power Plants are Here. Have Utilities Noticed? 2026. https://rmi.org/resources/grid-scale-virtual-power-plants-are-here-have-utilities-noticed/.

Wikipedia

{{cite report |author=RMI |title=Grid-Scale Virtual Power Plants are Here. Have Utilities Noticed? |date=14 May 2026 |url=https://rmi.org/resources/grid-scale-virtual-power-plants-are-here-have-utilities-noticed/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026gridscale, author = {{RMI}}, title = {{Grid-Scale Virtual Power Plants are Here. Have Utilities Noticed?}}, institution = {RMI}, year = {2026}, month = may, url = {https://rmi.org/resources/grid-scale-virtual-power-plants-are-here-have-utilities-noticed/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }