Virtual power plant deals surge in PJM

What happened: Google has initiated two 100-MW virtual power plant (VPP) projects in the PJM Interconnection market. The first, announced in May 2023, is a 'first-of-its-kind' deal with an unnamed partner, aiming to create an 'industry-leading scalable VPP'. The second, announced in June 2023, is a three-year 'Bring Your Own Capacity' (BYOC) agreement with Voltus, aggregating up to 100 MW of distributed energy resources annually.

Market impact: These deals drive growth in the VPP sector, a key component of the renewable energy transition. PJM, the largest wholesale electricity market in the U.S., sees increased demand for flexible, distributed resources. Google's involvement signals big tech's growing interest in energy markets, potentially pushing utilities to innovate and adapt. Voltus, a specialist in VPP aggregation, benefits from Google's commitment, boosting its revenue and market presence.

What to watch next: In Q3 2023, monitor PJM's capacity auction results, which could reflect increased VPP participation. In Q4 2023, track Google's and Voltus's progress in aggregating and managing VPP resources, and watch for any announcements of similar deals by other tech companies or utilities.