Reimagining the Electricity Sector in Island Nations with Virtual Power Plants

This report examines how distributed virtual power plants (VPPs) can address energy challenges in island nations, specifically focusing on the Caribbean. Using a case study from the US Virgin Islands, it analyzes how aggregating decentralized energy resources can improve grid stability, resilience, and affordability while reducing dependence on imported fossil fuels.

• Virtual power plants (VPPs) function as networks of decentralized and distributed energy resources (DERs) that are aggregated and controlled by a VPP aggregator. This allows numerous devices to act as a unified system, providing energy, capacity, or ancillary services to the grid. Examples of aggregated resources include battery energy storage systems, rooftop solar panels, and flexible loads such as smart thermostats and electric vehicle chargers.
• Island nations, particularly in the Caribbean, face energy vulnerabilities including heavy reliance on polluting and expensive imported fossil fuels, aging grid infrastructure leading to power outages, and threats to economic stability and power systems from hurricanes caused by climate change.
• The implementation of VPPs can enhance energy resilience, lower electricity system costs, and increase flexibility for ancillary services and generation. A case study of the US Virgin Islands (USVI) is used to demonstrate how these systems can improve disaster preparedness and grid stabilization.

APA

RMI (2025). Reimagining the Electricity Sector in Island Nations with Virtual Power Plants. https://rmi.org/resources/reimagining-the-electricity-sector-in-island-nations-with-virtual-power-plants/

Chicago

RMI. Reimagining the Electricity Sector in Island Nations with Virtual Power Plants. 2025. https://rmi.org/resources/reimagining-the-electricity-sector-in-island-nations-with-virtual-power-plants/.

Wikipedia

{{cite report |author=RMI |title=Reimagining the Electricity Sector in Island Nations with Virtual Power Plants |date=2 April 2025 |url=https://rmi.org/resources/reimagining-the-electricity-sector-in-island-nations-with-virtual-power-plants/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025reimagining, author = {{RMI}}, title = {{Reimagining the Electricity Sector in Island Nations with Virtual Power Plants}}, institution = {RMI}, year = {2025}, month = apr, url = {https://rmi.org/resources/reimagining-the-electricity-sector-in-island-nations-with-virtual-power-plants/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }