A✌️431-word✌️2-minute✌️read
Last week I posted on the irrational decision by California to defund the most successful virtual power plant program (VPP) in the country, if not the world. Given the latest data on the growth of VPPs, that move looks even more foolish.
According to Wood Mackenzie, overall VPP capacity in North America grew almost 14% last year to just shy of 40 gigawatts. Total VPP deployments now number 1,940, a 33% increase over last year. This year, the number of programs that pay resource owners for making their energy available (including the California program) rose 35% from 321 to 433.
It’s no surprise that the research firm believes that there is a correlation between the growth of VPPs and demand from data centers. They cite high levels of offtake in the PJM Mid-Atlantic region and in ERCOT in Texas.
According to the findings, deployments far outstripped increased capacity. Analysts cited reasons such as utility program VPP enrollment caps, reforms that reduce VPP’s capacity accreditation, and obstacles that hinder small customers from participating.
The Brattle Group sees similar trends. Ryan Hledik, principal and distributed energy resources expert at Brattle said, “My hunch is that the growth over the next 12 to 18 months will be more noticeable, and over the next three to five years the growth could be explosive.”
Somewhat ironically, Hledik noted the rapid deployment in states like California - and you guessed it – its Demand Side Grid Support (DSGS) program, as contributing factors in the growth of VPPs.
So why is California seemingly reversing direction?
A spokesperson for Governor Newsome offered the following explanation to the publication Utility Dive:
“The reality is that California has rapidly deployed thousands of new megawatts in recent years meaning our grid is more resilient than it’s ever been.”
OK, isn’t that a good thing?
The spokesperson also suggested that the program is less important now given all the new generation being deployed.
Hmm…
It’s interesting to note that the reduction in California’s energy-related per capita emissions from 2005 to 2023 fell below the national average of 30%. California registered a 24% decline, placing it 35th out of 51, including the District of Columbia.
The cynic in me might suspect another possibility for California’s reversal on the DSGS program and the reduced funding for a number of other environmental programs. Could it have more to do with Governor Newson’s desire to move to the center in preparation for the next presidential election?
No, that can’t be it. A politician would never put their own self interests ahead of their constituents.
#vpp #electricgrid #powergeneration #electricity