Google Investing in Virtual Power Plants Through 100-MW Deal with Voltus in PJM
Virtual power plant (VPP) aggregator Voltus is teaming up with tech giant Google to aggregate up to 100 MW of distributed energy resources under a three-year Bring Your Own Capacity (BYOC) agreement to help offset data center load growth.
These distributed energy resources (DERs) can include solar, battery storage, smart thermostats and generators, among flexible, distributed energy assets. During this BYOC agreement period, Voltus will aggregate this energy from local businesses and homes into a Google-funded VPP in PJM, the largest grid operator in the U.S.
Google is committed to spending roughly $25 billion in the PJM grid for AI and data center infrastructure over the next two years.
Traditionally, individual small businesses or shops don’t produce enough energy on their own to trade with big energy companies. An aggregator, such as Google, can help thousands of these smaller entities bundle their additional energy resources together through a collective conventional VPP to negotiate with large utility providers.
Voltus will then pay customers who participate in the VPP, turning Google’s capacity demand into economic benefits for PJM customers, according to a release.
VPPs can aggregate tens, hundreds, or even thousands of DERs into a single, dispatchable resource by using remote cloud-based software. That software manages the output of distributed resources more efficiently on the broader grid, reducing electricity demand at peak times. Industry members compare it to discharging local batteries or slightly adjusting smart thermostats automatically, orchestrating for thousands of devices at the same time to reduce grid stress.
“We are proud to work with Google to bring clean capacity online while helping our customers save money,” said CEO Dana Guernsey of Voltus in a statement. “This initial phase of our Google partnership is pioneering a model that large load customers can follow, and we expect it to accelerate the role of distributed energy resources as a capacity solution at scale.”
Voltus points out that meeting the growing energy demand in the U.S. has required an asset-heavy approach, consisting of years and billions of dollars to support short periods of peak demand. This is reportedly a primary factor driving up costs for electricity customers.
Optimizing existing U.S. power systems through smarter grid utilization alternatives such as VPPs could save consumers more than $100 billion over the next decade, according to new analysis from consulting firm The Brattle Group. Google and Voltus aim to create a scalable blueprint for hyperscalers on how these options can help data center capacity bring direct benefits to local communities.
“Google is committed to ensuring that our energy growth translates into a more reliable, affordable electricity future for local communities,” stated Michael Terrell, global head of advanced energy at Google. “We are excited to add this new solution to a growing toolkit that can accelerate a robust, flexible energy system.”
According to PEW research, fully leveraging existing and future DERs through VPPs, including providing DER owners appropriate compensation, could deliver power during peak demand at 40%-60% of the traditional cost.
