Check out the analysis Michael Levy and Baringa’s US Networks strategy team have done on VPPs. Tightening markets for dispatchable power capacity and a better awareness of the true costs of matching “cheap” renewables with customers ACTUAL demand needs are forcing a rethink of the role of customers (and their electrical equipment) in their own economic outcomes. In our view, investor owned utilities have been slower to explore the potential of VPPs. Why? Because it reduces both their potential to invest capital in new generation capacity, but also in their case for upgrading networks to serve peaks driven by greater electrification. Properly designed VPPs are an attractive alternative to address both needs. Public power, in contrast to investor owned utilities, has less of a “capital bias” and can assess the best resource to fill the need independent of capital structure. But they still need to make prudent investments that yield customer value. Against that backdrop, VPPs are starting to look like a no-brainer.
$13.5B by 2030 Baringa's research estimated the virtual power plant (VPP) addressable market for the top 150 public power utilities (>$85M in annual revenue) will grow from $3.4B to $13.5B by 2030! #virtualpowerplants are an integrated network of distributed energy resources that can be remotely controlled via an aggregator to act as a unified power source. The best part? In many cases customers are already buying VPP-capable assets such as heat pumps, smart thermostats, smart water heaters, solar+storage, and EVs. As a result, the cost to unlock this exceptionally cheap new capacity scales like software, making each additional MW of capacity substantially cheaper and preserving future optionally against forecasted demand. Investors such as the DOE Loan Programs Office recognize VPP potential, recently issuing a $3B loan to fund 100k customer's solar & storage VPP-enabled assets. So the big question is, if you act now how big will your slice of the pie be? #vpp #publicpower #energy #utilities