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

The policy brief examines how virtual power plants (VPPs) can mitigate grid interconnection delays for large loads, specifically data centers, in the United States. It highlights that VPPs can scale to meet over 20% of US peak demand by 2030 and are significantly cheaper than new gas plants. The document proposes three commercial models—pass-through funding, capacity transfer, and reliability reinforcement—to align incentives between large loads, utilities, and VPP aggregators. It also recommends reforms in interconnection policy, integrated planning, and customer protection to enable this transition.

• Virtual power plants (VPPs) are capable of scaling to meet more than 20% of the United States' peak electricity demand by 2030, potentially matching the projected growth of data centers.
• Traditional grid infrastructure and generation are facing severe delays, with gas turbine backlogs extending through 2028 and interconnection timelines for wind, solar, and storage averaging over five years.
• Grid constraints are causing significant delays for data center connections in key US markets, including wait times of up to seven years in Northern Virginia and paused service agreements in Ohio.
• VPPs offer a significantly lower-cost alternative for capacity compared to traditional infrastructure; for instance, 400 MW of VPP resource adequacy can cost $2 million annually, whereas equivalent new gas plants and grid upgrades cost $43 million.
• The document proposes three commercial models to accelerate VPP deployment: pass-through funding for utility-managed VPPs, VPP capacity transfer via transferable credits, and using VPPs as reliability reinforcement for flexible interconnection agreements.
• Several US states and regional organizations are implementing policies to expedite interconnection for bundled load and generation, such as Oregon's exploration of a large load tariff and Nevada's "Clean Transition Tariff" used by Google.

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} }