After years of pilot projects, utilities and battery companies now have networks with thousands of participants in California, Utah and Vermont, among other places.
Virtual power plant batteries add megawatts of capacity to the grid when electricity demand is highest. And most of the battery electricity is generated by solar power on the roof.
This combination of renewables and battery banks is “a recipe for the grid of the future,” said Blake Richetta, CEO of battery maker Sonnen’s US operations.
Yes, sonnen has a lowercase “s”, the kind of frustrating mark – at least for copy editors – that seems appropriate for virtual power plants, a concept whose name explains little what it is.
So what is it? A virtual power plant is like a swarm of bees or the Power Rangers Megazord or any other group of pieces joining forces to do great things, which in this case means stabilizing the grid.
I’ve been sonnen for a while and in 2019 I visited their world headquarters in Wildpoldsried, a village in Germany. The resulting story had talked a lot about Wildpoldsried and made only a brief mention of sonnen. But the company impressed me because of its entrepreneurial nature and its vision of how batteries can reduce the need for conventional power plants.
Since its inception in 2010, the company has been a leader in focusing on how batteries can perform a broader function than just backup power, and it has developed software to manage battery banks . The company is among the market leaders in home energy storage in Europe, but is a smaller player in the United States. Its rivals include Tesla and LG Chem.
Last week, I spoke with Richetta to get his perspective on a time when sonnen is part of several major initiatives that are helping to popularize virtual power plants.
The point of a home battery shouldn’t be to just “sit there all year until the power goes out,” Richetta said. Instead, this battery can be a basic element to serve the entire network.
Here are some details on how this idea translates into action:
Rocky Mountain Power, the utility serving parts of Idaho, Utah and Wyoming, is working with sonnen on a virtual power plant in which the utility offers a discount to encourage customers to participate.
So far, about 3,500 customers have signed up. They purchased a Sonnen drum system, which starts at around $10,000, and received discounts that start at $1,920.
Then, when the demand for electricity is highest, the utility has the ability to draw electricity from the batteries to feed the grid. Customers receive credits on their bills for the electricity they contribute.
The Rocky Mountain Power program is one of many virtual power plants across the country. Some other projects, all dating from the last two years:
- In California, utility Pacific Gas & Electric is working with Sunrun, a solar storage and battery company, to recruit 7,500 customers to be part of a virtual power plant with a capacity of up to 30 megawatts.
- Additionally, in California, sonnen is working on a virtual power plant with Baker Electric Home Energy, aiming to enroll 5,000 households by the end of 2025.
- In Vermont, utility Green Mountain Power has a virtual power plant with more than 4,000 batteries in customers’ homes and businesses, and is expanding the program.
- Utility Hawaiian Electric is working with energy company Swell Electric on an 80 megawatt virtual power plant which will serve customers on three Hawaiian islands.
Richetta started at sonnen in 2016 after spending time at Tesla, where he was sales manager for the Powerwall battery storage system.
He was part of Sonnen’s management in 2019 when the company agreed to be taken over by London-based oil giant Shell.
Environmental advocates have warned the public to be skeptical when oil companies tout their clean energy investments. Ken Cook of the Environment Working Group summed up this view in 2022, when he said, in response to evidence in a congressional hearingthat “Big Oil has no intention of divesting from fossil fuels” and “is instead engaging in greenwashing tactics”.
I asked Richetta about this review. He said the sale to Shell had been good for sonnen, giving the company the resources to grow far more than it could have done on its own.
“By next year, we will have grown about five times since our acquisition,” Richetta said. “Shell is absolutely not greenwashing.”
Much of sonnen’s expansion has taken place in the United States, where the company has approximately 140 employees and a manufacturing facility and headquarters in Stone Mountain, Georgia, part of a global workforce of about 1,500 people.
We are in the early stages of realizing the potential of virtual power plants. Clean energy researchers speak of a future in which batteries are just one of many resources that can be turned into grids, with national capacity running into the tens of gigawatts.
RMI, the research and advocacy group, sketched out what that could look like in a report this year showing the potential for 61.9 gigawatts of capacity in the United States in 2030.
The batteries would have a small share, 9.9 gigawatts. Electric vehicles would have 17.3 gigawatts, most of which would come from reducing the use of electric vehicle charging during periods of high electricity demand. The bulk of the capacity would be in buildings, including 19.8 gigawatts in homes and 14.9 gigawatts in businesses, most of which would come from using grids to reduce electricity demand by adjusting thermostats, among other measures.
Mark Dyson, chief executive of RMI, told me that he and the other co-authors of the report were deliberately broad in defining what a virtual power plant can be, including resources that can send electricity to the network and those that can reduce demand. . The common element is that all resources are located in homes and businesses and have the ability to work in tandem to make the network more reliable.
“Virtual power plants can help us keep the lights on and keep electricity affordable, using appliances we’ve already bought and paid for, without building new power plants,” he said. .
Even if you don’t define it that broadly and focus only on batteries, 9.9 gigawatts, or 9,900 megawatts, is huge, like a dozen natural gas power plants. I don’t have a good number on how that compares to the current virtual power plant capacity, which is probably less than 1 gigawatt.
If virtual power plants come close to that kind of growth, sonnen is among the companies that will benefit the most.