Report Highlights Role of Virtual Power Plants in Strengthening Grid Security

A new technical report, “Virtual Power Plants: A Critical Assessment of Their Role in Energy Security” (PES-TR139), finds that virtual power plants (VPPs) could play a growing role in supporting grid reliability and meeting rising energy demand. The report, prepared by the IEEE PES Industry Technical Support Leadership Committee Task Force on Grid Flexibility, points to increasing demand, the retirement of traditional fossil fuel assets and rising grid security risks as key drivers behind the need for new solutions.

VPPs can supply power to the grid during emergencies and periods of high demand. According to the findings of the report, these systems can deliver gigawatts of clean energy capacity while improving reliability and reducing the need for traditional infrastructure that can take years to deploy.

The report highlights several advantages of VPPs, including faster deployment timelines, the ability to dispatch resources in targeted geographic areas, and the use of controllable assets located behind the meter. It also notes that the U.S. Department of Energy recognizes VPPs as a proven energy security solution, citing pilot programs in the United States, Australia and New Zealand that have demonstrated reliable dispatch during high-risk periods.

While the report states that VPPs are not a comprehensive solution to all grid challenges, it emphasizes that broader adoption over the next decade could be valuable. To support that growth, the task force outlines a series of goals for grid operators and regulators aimed at improving grid connections and reforming market incentives.

Among those goals is the need to ensure VPPs can scale to meet short-term grid security and capacity needs during emergencies or when demand exceeds supply. Recommended actions include tailoring incentive programs, lowering barriers to participation in ancillary service markets and requiring utilities to consider VPPs in procurement processes as potential alternatives to infrastructure upgrades.

The report also calls for measures to support long-term reliability, including the use of long-term contracts to secure VPP capacity for critical grid needs and aligning compensation with net power flow at interconnection points. In addition, it highlights the importance of building more VPP-connected grids through infrastructure upgrades, regulatory incentives and interoperability standards.

The report concludes that taking concrete steps to expand VPP deployment could help create a more resilient, affordable and secure electric grid.