The Invisible Weapon Being Used to Prevent Blackouts

Source: Josh Saul | · BLOOMBERG · | August 19, 2024

The US electric grid increasingly relies on the “virtual power plant” to limit consumption — and ward off outages — during peak periods.

Welcome to our guide to the energy and commodities markets driving the global economy. Today, reporter Josh Saul looks at the potential for “virtual power plants” to prevent blackouts on increasingly strained grids. To get this newsletter sent to your inbox, sign up here.

As summer heat strikes, the US grid increasingly relies on a kind of invisible weapon — the “virtual power plant” — to prevent blackouts.

Each VPP brings together large numbers of homes and businesses whose owners have agreed to use less electricity when needed — or even send some of their own back to the grid — in exchange for a financial incentive.

Participants just have to let the operators take control of their usage to balance supply and demand when the system’s under stress, usually by setting the thermostat a few degrees higher or tapping electric vehicles and on-site batteries.

Pool enough customers, and it makes a big difference. Energy consultancy Wood Mackenzie says the VPPs already deployed or under development in the US will be able to save as much juice as 33 nuclear reactors can produce.

And they can swing into action at a moment’s notice.

“You’re essentially allowing the temperature in a building to rise slightly, which translates to load reduction and, therefore, grid relief,” said Ben Hertz-Shargel, who leads research on electrification and grid digitalization for Wood Mackenzie.