How Virtual Power Plants Can Help the United States Win the AI Race

This policy brief by RMI argues that Virtual Power Plants (VPPs) can mitigate the grid constraints currently delaying the interconnection of data centers and other large loads in the United States. The document proposes three commercial models to accelerate VPP deployment and suggests policy reforms in interconnection, integrated planning, and customer protection to ensure the US remains competitive in the AI race.

• Grid infrastructure bottlenecks are causing significant delays for new data centers. In Northern Virginia, Dominion Energy has warned of wait times up to seven years for new connections, while in the Dallas-Fort Worth area, some delivery dates are delayed until 2027 or later.
• VPPs are presented as a scalable solution capable of meeting over 20% of US peak demand by 2030. They are characterized by their speed of deployment and flexibility, as evidenced by a residential VPP in Ontario that enrolled 100,000 homes in six months and California's Demand-Side Grid Support Program, which added 500 MW of customer-sited storage between January and October 2025.
• VPPs offer a significantly lower-cost alternative to traditional capacity upgrades. A Brattle report cited in the text found that 400 MW of VPP resource adequacy costs $2 million annually, whereas equivalent new gas plants and grid upgrades would cost $43 million.
• The document proposes three commercial models to facilitate VPP deployment: 'Pass-Through Funding for Utility-Managed VPP' (where large loads fund utility-operated programs), 'VPP Capacity Transfer' (where loads fund third-party VPPs and exchange capacity credits for expedited interconnection), and 'VPP as Reliability Reinforcement' (where VPPs serve as a first line of defense for flexible interconnection agreements).
• Several US states and regional organizations are implementing policies to expedite interconnection for bundled load and generation. Examples include Oregon's exploration of a large load tariff, Nevada's 'Clean Transition Tariff' for Google, and the Southwest Power Pool's (SPP) proposed High-Impact Large Load Generation Interconnection Assessment (HILLGA) for 90-day studies.

APA

RMI (2025). How Virtual Power Plants Can Help the United States Win the AI Race. https://rmi.org/resources/how-virtual-power-plants-can-help-the-united-states-win-the-ai-race/

Chicago

RMI. How Virtual Power Plants Can Help the United States Win the AI Race. 2025. https://rmi.org/resources/how-virtual-power-plants-can-help-the-united-states-win-the-ai-race/.

Wikipedia

{{cite report |author=RMI |title=How Virtual Power Plants Can Help the United States Win the AI Race |date=6 November 2025 |url=https://rmi.org/resources/how-virtual-power-plants-can-help-the-united-states-win-the-ai-race/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025how, author = {{RMI}}, title = {{How Virtual Power Plants Can Help the United States Win the AI Race}}, institution = {RMI}, year = {2025}, month = nov, url = {https://rmi.org/resources/how-virtual-power-plants-can-help-the-united-states-win-the-ai-race/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }