How ‘virtual power plants’ help reduce peak power demand in New England

On the hottest afternoons this summer, when residents across New England cranked their air conditioners, something noteworthy happened. Thousands of internet-connected thermostats, home solar panels and battery systems were called into action to help reduce the strain on the electric grid.

Welcome to the age of “virtual power plants,” or VPPs.

Virtual power plants are essentially a network of devices in homes and businesses that can be harnessed by utilities to add power, cut energy demand or both. Here’s how they work: Customers sign up to participate. Then, when electricity use spikes, the utilities may tell those customers’ Wi-Fi-connected thermostats to raise the temperature by a few degrees, reducing the demand for electricity. Or, the utilities may remotely instruct a home’s back-up battery to start powering lights and appliances, so they aren’t drawing electricity from the grid. In some cases, utilities may even slow operations at industrial facilities.

The idea is that by mobilizing a sea of individual devices across a wide area, virtual power plants can help balance supply and demand on the grid.

If that all sounds like something out of science fiction, energy experts say virtual power plants are already providing real benefits. They can decrease the likelihood of power outages when the grid gets overwhelmed. They can help slash greenhouse gas emissions by avoiding the use of older, more polluting power plants. And in the future, they may even save ratepayers billions of dollars by reducing the need to construct new power lines and other infrastructure to meet growing energy demands.

“I’m very excited about virtual power plants,” said Joe LaRusso, who manages the Clean Grid Initiative at the Acadia Center, a non-profit clean energy research and advocacy group. “There’s enormous potential for every house to behave as a grid asset.”

The concept of virtual power plants isn’t new, but their advantages are becoming more visible. Consider what happened on the afternoon of Thursday June 20. It was the third day of a heat wave. The combination of high temperatures and oppressive humidity meant a lot of people were blasting air conditioners to stay cool.

ISO-New England, the regional power grid operator, forecasted electricity demand would peak that evening at around 23,900 megawatts, the highest peak yet of the summer (and slightly higher than the average summer daily peak of 17,500-22,000 megawatts).

As temperatures rose, New England utilities alerted customers in their virtual power plant programs, known as ConnectedSolutions, that energy use was surging. Unless customers opted out, their devices would be called upon to help reduce demand in the late afternoon and evening.

Then, between 5-8 p.m., virtual power plants in New England deployed. Smart thermostats raised indoor temperatures by a few degrees, some EV chargers worked at a slower rate and batteries began powering homes.

Together, these assets shaved peak energy demand by 375 megawatts, which is roughly equivalent to adding a medium-sized natural gas power plant to the grid.

In Massachusetts, Connecticut and New Hampshire, Eversource customers accounted for about half of the reduction in demand, according to Tilak Subrahmanian, who oversees energy efficiency, demand management and electric vehicle operations at the utility.

“If you look at total New England demand, it doesn’t look like a lot, [but] that 200 megawatts is actually a big deal,” he said, because managing demand at peak hours is all about making a difference at the margins. In a situation where the grid is very stressed, he added, even a modest reduction in demand could prevent power outages.

So far this summer, utilities in New England have called on thermostats 12 times to help manage the load on the grid and tapped home batteries 40 times. In four instances, they also asked commercial and industrial facilities to cut energy use.

Commercial and industrial customers are paid based on how much they reduced demand during peak hours. According to Eversource, the average small business earns about $2,000 annually for participating.

“We’re only just at the beginning of this,” said Mike Judge, undersecretary for energy and environmental affairs in Massachusetts. “There’s a lot more of these resources that can be deployed, [and] there’s a lot of potential here for even deeper reductions in peak demand as more customers adopt these technologies.”

In Massachusetts, the next frontier for virtual power plants is likely to be EV chargers. Many people who drive electric cars tend to plug them in when they get home, often in the late afternoon or early evening. On hot summer days, that’s also when air conditioning use spikes. If those EV chargers were enrolled in a virtual power plant, the utilities could pause them, or slow their charging rates, until the overall demand for electricity dropped.

Subrahmanian said Eversource recently rolled out an EV charger feature like this for Connecticut customers and is working on adding a similar option in Massachusetts.

Looking further ahead, energy industry experts say some electric vehicles — not just chargers — will likely be part of virtual power plants. They could be tapped to act like batteries that send electricity back to the grid at times of high demand. Electric school buses, in particular, present an opportunity, experts say, because they have big batteries that sit idle for much of the summer.

The electric power system, with all of its transmission lines and substations, is built to accommodate periods when demand for power reaches a peak. By mid-century, when Massachusetts and several other New England states aim to heat homes and power transportation with electricity — instead of fuels like natural gas and oil that contribute to climate change — peak electricity is expected to double, according to the regional grid operator. Meeting that demand will be a big challenge, but virtual power plants could be part of the solution.

“On days when the grid is stressed, if each of our homes is serving as a grid asset — that is, we are turning stuff off in our homes or discharging batteries — we can, each of us, contribute to shaving the peak,” the Acadia Center’s LaRusso said. “And if the peak can be shaved across the region by thousands of megawatts, then we’re really talking about having a system that is much more nimble, and much more resilient and much more reliable.”

How ‘virtual power plants’ help reduce peak power demand in New England | WBUR News