The Loan Programs Office of the Department of Energy this week said it has signed a memorandum of understanding with the Electric Power Research Institute aimed at improving the understanding and integration of virtual power plants.
The DOE said the collaboration seeks to identify solutions in areas such as systemwide planning, integrated system operations, and the broader adoption of distributed energy resources to better understand how VPPs can increase reliability, resilience, and cost-savings for energy customers of all income levels.
“With fossil fuel power plants retiring at the same time as electricity demand is growing for the first time in a decade, deploying 80-160 [gigawatts] of VPPs by 2030—tripling the current scale—is the fastest and most cost-effective way to support electrification,” Jigar Shah, LPO Director, said in a statement. “VPPs can redirect spending from peaker plants to participants from all walks of life while delivering a smarter and more efficient grid.”
The DOE said the MOU builds on EPRI’s recent contribution to DOE’s Pathways to Commercial Liftoff VPP report that highlighted the benefits and challenges to widespread VPP deployment.
According to the liftoff report, between 2023 and 2030, the United States will need to add enough new capacity to serve over 200 GW of peak demand. To meet the Biden-Harris Administration’s goal of achieving a net-zero power grid by 2035, new capacity needs could nearly double.
In addition, the DOE said, the shift to more renewable and distributed energy resources will lead to more variable electricity supply and higher demand for transmission capacity.
“Getting the grid ready for increased electrification, variable renewables, heat pumps, growing demand from data centers and more—all while improving energy resilience—takes tremendous investment and expansion,” Arshad Mansoor, EPRI’s president and CEO, said in a statement.
“By increasing the use of existing assets, VPPs are one tool that can help bridge the gap towards an affordable, equitable, and reliable clean energy transformation. This MOU with DOE LPO will harness the collective strength of our expertise, working together to address VPP challenges and opportunities as part of the clean energy transition,” Mansoor said.
The DOE said that through meetings, information exchange, and workshops, EPRI and LPO aim to coordinate efforts to achieve effective utilization of VPP technologies and identify technical, regulatory, and commercial solutions to deployment of robust VPP programs across the United States, including identifying how modern architectures, technical standards, and integrated operations complement other considerations of VPP program development such as customer engagement, market impact, and cost-benefit analyses that capture the local and systemwide value of VPPs.
The MOU partners said their efforts would entail refining observations into actionable resources, specifying that for LPO that could include leveraging the depth of technical, financial, analytical, and policy expertise across the DOE. For EPRI, the initiative could include designing and hosting data-gathering demonstrations, sharing resulting data for analysis, and layering on customer and technology-specific insights, they said.
