Latest news with #virtualpowerplants
Bloomberg
5 days ago
- Business
- Bloomberg
Origin Sees EV, Battery Boom Driving Virtual Power Plant Growth
Australia's biggest power retailer expects more households to link home batteries into ' virtual power plants,' a shift it sees curbing the cost of the energy transition and easing pressure on the nation's slow-moving grid build-out. The number of customer devices connected to Origin Energy Ltd. 's 'Origin Loop' VPP rose about 5% in the past year to 1.5 gigawatts of capacity, the company said as it released full-year earnings on Thursday. Almost 400,000 assets — including hot-water systems, batteries, solar panels and electric vehicles — are now connected to the platform.
Yahoo
28-07-2025
- Business
- Yahoo
As rooftop solar gets hammered, virtual power plants offer a way forward
The rooftop solar industry is facing an unprecedented crisis. Utilities are cutting incentives. Major residential solar installers and financiers have gone bankrupt. And sweeping legislation just passed by Republicans in Congress will soon cut off federal tax credits that have supported the sector for 20 years. But the fact remains that solar panels — and the lithium-ion batteries that increasingly accompany them — remain the cheapest and most easily deployable technologies available to serve the ever-hungry U.S. power grid. Sachu Constantine, executive director of nonprofit advocacy group Vote Solar, thinks that the rooftop solar and battery industries can survive and even thrive if they focus their efforts on becoming 'virtual power plants.' Hundreds of thousands of battery-equipped, solar-clad homes across the country are already storing their renewable energy when it's cheap and abundant and then returning it to the grid when electricity demand peaks and utilities face grid strains and high costs — in essence, acting as 'peaker' power plants. In places like Puerto Rico and New England, these VPPs have demonstrated their worth in recent months, preventing blackouts and lowering costs for consumers, and the approach could be scaled up dramatically. 'If we do that, despite the One Big Beautiful Bill, despite the headwinds to the market, there is space for these technologies,' Constantine said. Right now, there aren't many other options for meeting soaring energy demand, he added. The megabill signed by President Donald Trump this month undermines the economics of the utility-scale solar and battery installations that make up the vast majority of new energy being added to the grid. And despite the Trump administration's push for fossil fuels, gas-fired power plants can't be built fast enough to make up the difference. Meanwhile, the U.S. power grid has not expanded quickly enough, increasing the risk of outages and subjecting Americans to the burden of rising utility rates, Constantine said. State lawmakers and utility regulators are under growing pressure to find solutions. Solar and batteries, clustered in small-scale community energy projects or scattered across neighborhoods, may be 'the only viable way to meet load growth' from data centers, factories, and broader economic activity, Constantine said. And by relieving pressure on utility grids, they can help bring down costs not just for those who install them, but for customers at large. Where VPPs are already saving the day This summer has brought new proof of how customers can turn their rooftop solar systems and batteries to the task of rescuing their neighbors from energy emergencies. Over the past two months, Puerto Rico grid operator LUMA Energy has relied on participants in its Customer Battery Energy Sharing program to prevent the grid from collapsing. 'Last night we successfully dispatched approximately 70,000 batteries, contributing around 48 megawatts of energy to the grid,' LUMA wrote in a July 9 social media post in Spanish. Amid a generation shortfall of nearly 50 MW, that dispatch helped avert 'multiple load shedding events' — the industry term for rolling blackouts. Puerto Ricans have been installing solar and batteries at a rapid clip since 2017, when Hurricane Maria devastated the island territory's grid and left millions of people without power, some for nearly a year. 'There were tens of thousands of batteries already there that just needed to get connected in a more meaningful way,' said Shannon Anderson, a policy director focused on virtual power plants at Solar United Neighbors, a nonprofit that helps households organize to secure cheaper rooftop solar. 'The numbers have been really proven out this summer in terms of what it's been able to do.' Puerto Rico's VPPs are managed by aggregators — companies that install solar and battery systems and control them to support the grid. Tesla Energy, one such aggregator, provides live updates on how much the company's Powerwall batteries are contributing to the system at large. The impacts of distributed solar and batteries aren't always so easy to track — but clean-energy advocates are busy calculating where they're making a difference. During last month's heat wave across New England, as power prices spiked and grid operators sought to import energy from neighboring regions, distributed solar and batteries reduced stress on the grid. Nonprofit group Acadia Center estimated that rooftop solar helped avoid about $20 million in costs by driving down energy consumption and suppressing power prices. A good portion of that distributed solar operates as part of the region's VPPs. The ConnectedSolutions programs run by utilities National Grid and Eversource cut demand by hundreds of megawatts during summer heat waves. And Vermont utility Green Mountain Power has been a vanguard in using solar-charged batteries as grid resources at a large scale, in concert with smart thermostats, EV chargers, and remote-controllable water heaters. All told, that scattered infrastructure gives the company 72 extra megawatts of capacity to play with during grid emergencies. Mary Powell, who led Green Mountain Power's push into VPPs before that term had caught on, left to become CEO of Sunrun, the country's largest residential solar installer, in 2021. Choosing to hire Powell indicated the company's growing interest in becoming something of a solar-powered utility. This summer, Sunrun dispatched hundreds of megawatts from more than 130,000 batteries across California, New York, Massachusetts, Rhode Island, and Puerto Rico. It recently expanded into Texas' competitive energy, in partnership with Tesla. 'We are living in the future of virtual power plants in places like Puerto Rico, and California, and New England, and increasingly Texas,' said Chris Rauscher, Sunrun's head of grid services and electrification. 'It's just about other states putting that in place in their territories and letting it run.' Getting states to embrace VPPs Sunrun, Vote Solar, and Solar United Neighbors have been working for the last year to advance state policies that support VPPs. So far this year, the groups have promoted model VPP legislation in states including Illinois, Minnesota, New Mexico, Oregon, and Virginia. In May, Virginia passed a law requiring that utility Dominion Energy launch a pilot program to enlist up to 450 megawatts of VPP capacity, including at least 15 MW of home batteries, Anderson said. The legislative effort has had less luck in New Mexico and Minnesota, where bills failed to advance, Anderson said. In Illinois, a proposed bill did not pass during the regular legislative session, but advocates hope to bring it back for consideration during the state's 'veto session' this fall, she said. A lot more batteries are being added to rooftop solar systems in Illinois, Anderson noted — a byproduct of the state clawing back net-metering compensation for solar-equipped customers starting this year. Similar dynamics have played out in Hawaii and California after regulators reduced the value of solar power that customers send back to the grid, making batteries that can store extra power and further limit customers' grid consumption much more popular. Rooftop solar advocates have fought hard to retain net-metering programs across the country. But Jenny Chase, solar analyst with BloombergNEF, noted that most mature rooftop solar markets have shifted away from rewarding customers for sending energy back to the grid at times when it's not needed. 'In some ways that's justified, because net metering pushes all responsibility and cost of intermittency onto the utility,' she said. VPPs flip this dynamic, turning rooftop solar and batteries from a potentially disruptive imposition on how utilities manage and finance their operations to an active aid in meeting their mission of providing reliable power at a reasonable cost. Utilities have traditionally been leery of trusting customer-owned resources to meet their needs. But under pressure from lawmakers and regulators, they're starting to embrace the possibilities. In Minnesota, utility Xcel Energy has proposed a 'distributed capacity procurement' program that would allow it to own and operate solar and batteries installed at key locations, letting the company defer costly grid upgrades. Rooftop solar advocates have mixed feelings about the proposal, given their longstanding complaints about Xcel's track record of making it more difficult for customers and independent developers to build their own solar and battery systems. Similar tensions are at play in Colorado, where Xcel is under state order to build distributed energy resources like rooftop solar and batteries into how it plans and manages its grid. This spring, Xcel launched a project with Tesla and smart-meter company Itron aimed at 'taking these thousands of batteries we have connected to this system over time and [being] able to use them to respond to local issues,' Emmett Romine, the utility's vice president of customer energy and transportation solutions, told Canary Media in an April interview. But waiting for utilities to deploy the grid sensors, software, and other technology needed to perfectly control customers' devices runs the risk of delaying the growth of VPPs, Anderson said. Simpler approaches like those being taken in Puerto Rico — where aggregators manage VPPs — can do a lot of good quickly. 'Once you get that to scale, there will be a lot of learnings for the next stage,' she said Blunting the impact of tax credit cuts State- and utility-level incentives that encourage individuals to participate in VPPs are also a vital countermeasure against the damage incurred by the 'big, beautiful bill' passed by Republicans this month, Anderson said. Under that law, households will lose a 30% tax credit that offsets the cost of solar, batteries, and other home energy systems by the end of this year. However, companies such as Sunrun and Tesla will retain access to tax credits for solar systems that they own and provide to customers through leases or power purchase agreement structures, as long as they begin construction by mid-2026 or are placed in service by the end of 2027. And tax credits for batteries remain in place until 2033 for these companies. VPP programs can't make up for the loss of the tax credit for customers who haven't yet installed solar or batteries, Anderson said. But by financially rewarding participants, they can help consumers recoup initial costs, she said, as long as they aren't hampered by ineffective state policies. 'Folks can earn over $1,000 a summer through [some VPPs],' she said. 'You couple in the leasing model for solar and storage, which is going to get a little more popular in the aftermath of the bill,' due to its ability to continue to earn tax credits, 'and I think it's a pretty good way to get batteries for low or no cost up front.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
