DOE Pushes Accelerated Deployment of VPPs with New Liftoff Report
As the country grapples with rapidly increasing electricity demand, extreme weather events, rising electricity costs and grid reliability issues, the Department of Energy (DOE) remains bullish on the potential of virtual power plants (VPP).
“The business as usual approach that worked in a world without demand growth and extreme weather won't work going forward,” Jigar Shah, director of the DOE’s Loan Programs Office, said during a recent webinar.
“Utilities, regulators, policy makers and industry partners all have a role to play to adopt an innovation mindset to accelerate the deployment of virtual power plants and serve the near-term needs of American citizens,” he said.
Shah spoke during a Jan. 15 webinar on the DOE’s Pathways to Commercial Liftoff: Virtual Power Plant Update, the second installment of its VPP Liftoff Report, published earlier this month.
Part of the DOE’s series of reports on the Pathways to Commercial Liftoff for emerging clean energy technologies, the first edition of the VPP Liftoff Report was released in September 2023.
The 2025 edition supplements the initial report, providing over 75 real-world examples of VPP deployments and VPP enabling actions. Additionally, it contains more than 60 new VPP resources from the DOE and the industry.
Low cost and quick to deploy
VPPs use advanced software and communication technologies to manage, optimize and coordinate the output of tens, hundreds or even thousands of distributed energy resources (DERs) into a single, aggregated dispatchable resource that can be used to bolster the grid during times of peak demand.
The DOE says VPPs are particularly helpful in solving the challenges facing the grid because they are a low cost solution that can be deployed quickly.
“They can be launched in less than 6 months to meet rapid low growth,” said Sonali Razdan, senior advisor at the DOE Office of Technology transitions and the lead author of the 2025 VPP Liftoff Update.
“They are low cost both on the bulk power grid and on the distribution grid because they help defer necessary upgrades and maximize utilization of the assets we've already paid for, all while they provide backup power options to communities during emergencies such as extreme weather events,” she added.
Utilities are embracing VPPs
Utilities are embracing VPP technologies, Marcos Gonzales Harsha, principal deputy director for the DOE’s Office of Technology Transitions, said during the webinar. “VPPs are becoming integral to how we run our distribution systems in some parts of the country,” he added.
During the webinar, Harsha and Shah highlighted several VPP programs, including NRG Energy and Renew Home’s plan to launch a 1 GW VPP in Texas and Green Mountain Power’s Zero Outages Initiative in Vermont.
Five imperatives to accelerate liftoff
Shah has been a proponent of VPPs since he took over the LPO in 2021 and the DOE and LPO have invested millions in VPP projects and technologies in recent years. He is expected to leave the LPO and be replaced by someone from the incoming Trump Administration, which takes office Monday.
In its 2025 VPP Liftoff update, DOE outlines five imperatives it believes will further accelerate the expansion and adoption of VPPs:
- Expand DER adoption with equitable benefits.
- Simplify VPP enrollment.
- Increase standardization in VPP operations.
- Integrate into utility planning and incentives.
- Integrate into wholesale markets.
A replay of the webinar is available here and you can read the full Pathways to Commercial Liftoff: Virtual Power Plants 2025 update here.
