GM, Ford, Google partner to promote ‘virtual’ power plants

WASHINGTON — Companies including General Motors, Ford Motor Co., Google and solar energy producers said on Tuesday they would work together to establish standards for scaling up the use of virtual power plants (VPPs), systems for easing loads on electricity grids when supply is short.

Energy transition nonprofit RMI will host the initiative, the Virtual Power Plant Partnership (VP3), which will also aim to shape policy for promoting the use of the systems, the companies said.

Virtual power plants pool together thousands of decentralized energy resources like electric vehicles or electric heaters controlled by smart thermostats.

With permission from customers, they use advanced software to react to electricity shortages with such techniques as switching thousands of households’ batteries, like those in EVs, from charge to discharge mode or prompting electricity-using devices, such as water heaters, to back off their consumption.

VPPs are positioned for explosive growth in the U.S., where the 2021 Inflation Reduction Act has created or enlarged tax incentives for electric vehicles, electric water heaters, solar panels and other devices whose output and consumption can be coordinated to smooth grid load.

RMI estimates that by 2030, VPPs could reduce U.S. peak demand by 60 gigawatts, the average consumption of 50 million households, and by more than 200 GW by 2050.