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

Virtual power plants (VPPs) are reaching scales that rival traditional power plants, with some programs exceeding 1 GW. Despite this, the document finds that utilities often fail to properly model VPPs in integrated resource plans (IRPs) and distribution system plans (DSPs), frequently treating them as fixed load adjustments rather than selectable resources. This planning gap leads to an underestimation of VPP value and a risk of redundant infrastructure investment. The author recommends that regulators and utilities develop detailed resource attributes for VPPs, allow for their growth in models, and evaluate their benefits across both bulk power and distribution systems.

• VPPs have reached capacities that meet or exceed those of traditional power plants; for example, the average US combustion gas turbine in 2024 was 180 MW, while California's DSGS program reached 1,145 MW as of October 2025.
• VPPs provide tangible grid reliability and cost-saving benefits, such as National Grid identifying that two feeder expansion projects could be deferred for five years each through VPP programs, and Sunrun leveraging 340 MW of batteries to support the evening net peak on June 24th during a 2025 heat dome.
• Utility planning processes often fail to account for VPPs as selectable resources for expansion, instead applying fixed rates of expansion that ignore economic potential and using restrictive parameters that do not reflect actual grid performance.
• The exclusion of diverse VPP value streams from cost-benefit analyses may lead utilities to build redundant generating assets or substations 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} }