Advancing Virtual Power Plants to Scale: Policy, Market Trends, and Deployment Pathways | Alliance to Save Energy

Advancing Virtual Power Plants to Scale: Policy, Market Trends, and Deployment Pathways

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09/23/25

Advancing Virtual Power Plants to Scale: Policy, Market Trends, and Deployment Pathways

Virtual Power Plants (VPPs) are emerging as a cornerstone of the United States’ clean energy transformation. By digitally aggregating and coordinating distributed energy resources (DERs), such as rooftop solar panels, battery storage systems, electric vehicles, smart appliances, and flexible demand response, VPPs enable real-time optimization of both energy supply and demand. This enhances grid reliability and resilience, lowers costs for consumers, and reduces emissions.

The 2025 Department of Energy (DOE) VPP Liftoff Report lays out a strategic roadmap to scale national VPP capacity to between 80 and 160 gigawatts (GW) by 2030, underscoring the pivotal role of DERS in achieving these decarbonization and grid modernization goals.

The VPP report is informed by extensive stakeholder engagement, including insights from the Active Efficiency Collaborative, and integrates key policy, market, and technology perspectives. It presents actionable strategies to expand VPP adoption, with an emphasis on customer participation, utility engagement, regulatory reform, & investment in digital infrastructure that ensures broader access across communities and regions.

About The Active Efficiency Collaborative
 
The Active Efficiency Collaborative (AEC), convened by the Alliance to Save Energy, is a coalition of energy leaders and experts working to advance the next generation of energy efficiency through
demand flexibility, digital solutions, & gridinteractive technologies. In 2023, the AEC entered its most impactful year to date, aligning its work with major federal initiatives such as the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), while also laying the groundwork for implementing the U.S. Department of Energy’s VPP Liftoff Report.
 
The Collaborative brings together stakeholders from utilities, technology companies, research institutions, and public agencies to form a national platform for innovation, collaboration, and policy advancement. Its mission is to accelerate the adoption of advanced energy efficiency solutions while ensuring these technologies are accessible to a broad range of customers, communities, and regions.
 
The AEC’s 2023 Roundtable Series played a central role in shaping the policy recommendations outlined in this report. These convenings identified key challenges to demand flexibility and highlighted actionable opportunities for VPP deployment. Grounded in real-world experience & input from diverse stakeholders, the roundtables provided a foundation for recommendations that reflect on-the-ground realities and support practical, scalable progress.
 

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