Brattle study: 524 GW virtual power plants could avoid $614 billion grid costs

The Brattle Group estimates that the United States currently has 113 gigawatts of distributed energy resources available for virtual power plants as of 2025. The consultancy projects this capacity could expand to 524 gigawatts by midcentury. According to the study, achieving that level of virtual power plant capacity could avoid $614 billion in grid investments.

Cost avoidance and consumer impact

The Brattle Group estimates average household electricity bills could drop $122 per year by 2050 if virtual power plants reach their projected capacity. This reduction stems from avoiding grid investments. However, the study warns that if load growth falls 5% short of forecasts, U.S. customers face $84 billion in overinvestment costs between 2030 and 2040. Expanding these systems could cut that overbuilding expense by $33 billion, a 40% reduction. Despite these potential savings, it remains unclear how completely state policies can insulate consumers from the infrastructure costs associated with data centers.

Navigating forecast uncertainty

Brattle principal and lead author Ryan Hledik emphasizes that these smaller modular resources can be brought online once necessary systems are in place. He notes that load growth forecasting presents unprecedented uncertainty, a challenge not seen in his two decades of analysis. Hledik warns that if incentives become too volatile, the program loses some of its attractiveness for participants.

Policy and market adoption

• Maureen Quinlan, a senior manager at the Pew Charitable Trusts focused on energy modernization, remarked: "The next step is to build these potential VPP benefits into how utilities plan their grids."
• Legislation requiring VPPs has been enacted in Colorado, Illinois, Maryland, and Virginia.
• Google and Voltus are pursuing one gigawatt of distributed capacity within PJM Interconnection territory.

Background

On 22 October, Luminity disclosed that recent peak demand across PJM Interconnection hit 162.6 GW, with projections suggesting that data centers and similar heavy loads will contribute an additional 30 to 34 GW by the early 2030s. Within that same publication, the outlet highlighted how Google and Voltus expanded their PJM Interconnection VPP objective from 100 megawatts in June to 1 gigawatt. Nationwide, Voltus oversees more than 9 GW of demand response and VPP resources, aiming for 20 GW by 2030, whereas participants in the Google initiative agree to reduce consumption or deliver battery energy during peak periods through 2040. Luminity noted on 21 October that under its municipal VPP framework, Budderfly handles the financing, installation, ownership, operation, and upkeep of all gear in involved cities, while Schneider Electric supplies the necessary energy management and automation systems.

What to watch

The study does not specify a timeline for when utilities will fully integrate virtual power plant benefits into their grid planning processes. While state mandates in Colorado, Illinois, Maryland, and Virginia have passed, the pace of implementation is not specified.