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Last week, we hosted a roundtable at Piper Maddox as part of the Clean Energy Exchange event series, focused on grid flexibility. With Michael Lee moderating, we had folks from Tesla, Leap, Olivine, Enersponse, Shadowpower, and others who know this space inside out.
The feeling in the (virtual) room? We’re at a real tipping point. Virtual Power Plants aren’t just “emergency response” tools anymore, they’re critical infrastructure, and the market conditions are lining up perfectly for them to step up. Capacity prices are through the roof, wholesale markets are volatile, and demand is growing in ways the old models can’t handle. This is exactly when VPPs should be at the forefront of conversations: fast to deploy, low-cost, and able to deliver flexibility exactly where it’s needed.
The problem is the market design hasn’t caught up. We’re still stuck with siloed programs that box in assets instead of letting them work where they have the most impact. We need models that open up multiple revenue streams and recognise that not all VPP resources are the same – an HVAC system doesn’t behave like an EV fleet or a battery, and they shouldn’t be valued like they do.
One point that landed hard in the discussion was around local value. The way we price flexibility right now is far too broad. A single neighbourhood with a cluster of flexible assets can fix a local constraint far more cheaply than building more infrastructure – but you’d never know that from today’s pricing zones. We need distribution-level nodal pricing that actually reflects the hyper-local impact these assets can have.
Then there’s the customer side. Batteries are the classic example – the grid wants certainty, customers want backup. If programs can’t balance those needs, participation will always be limited.
With over 3,500 utilities in the US, capability is all over the place. Some are ready to play, others are decades behind. Meeting them where they are, or going around them when we have to – will be key. That means understanding the realities of each market, working with what’s already in place, and finding ways to connect customers and utilities without overcomplicating the participation process.
The final piece is advocacy. Right now, there’s no unified industry voice pushing for fair valuation or smarter market rules. Imagine what we could do with a coalition of VPP providers, utilities, generators, and even data centres speaking with one voice. The narrative on grid reliability needs a rewrite – and the proof these assets deliver is already there from recent heatwaves and grid events.
If we want VPPs to fulfil their potential, we need to align as an industry, decide what we’re pushing for, and make sure the message is loud enough to cut through.
Bottom line: VPPs aren’t the future – they’re here. But without changes to market design, pricing, and the way we advocate for them, they’ll stay underused. Get it right, and they can become the backbone of a more flexible, reliable, and cost-effective grid.
Want to learn more about this event or future grid flexibility discussions? Reach out to Dom Jolly.
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