California is testing a new approach to managing electricity: virtual power plants, which are networks of residential batteries and smart devices that work together as a single, dispatchable generator. Early results indicate that these distributed systems could transform how utilities balance supply and demand on a grid increasingly powered by solar and wind energy.
VPPs coordinate thousands of behind-the-meter batteries, smart thermostats, and other connected devices to act collectively as a single grid resource. The idea is straightforward: if each home battery or smart device contributes a small portion of its stored energy at the right time, the combined output can be enormous.
In a test in July, California’s three major utilities coordinated hundreds of home batteries through Sunrun, forming a 500-megawatt virtual power plant—enough to rival half of a Diablo Canyon nuclear reactor. The experiment demonstrates that consumer-owned systems, when combined, can provide real-time grid flexibility and help prevent blackouts during peak demand.