What is a virtual power plant? An energy expert explains
- January 1, 2024: Vol. 17, Number 1

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What is a virtual power plant? An energy expert explains

by Daniel Cohan

After nearly two decades of stagnation, U.S. electricity demand is surging, driven by growing numbers of electric cars, data centers and air conditioners in a warming climate. But traditional power plants that generate electricity from coal, natural gas or nuclear energy are retiring faster than new ones are being built in this country. Most new supply is coming from wind and solar farms, whose output varies with the weather.

That has left power companies seeking new ways to balance supply and demand. One option they’re turning to is virtual power plants.

These aren’t massive facilities generating electricity at a single site. Rather, they are aggregations of electricity producers, consumers and storers — collectively known as distributed energy resources — that grid managers can call on as needed.

Some of these sources, such as batteries, may deliver stored electric power. Others may be big electricity consumers, such as factories, whose owners have agr

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