As record-breaking temperatures continue to strain the power grid in the West, San Diego Gas & Electric (SDG&E) is leading the way with an innovative solution: a virtual power plant (VPP). This pilot project harnesses the power of customer-owned smart thermostats, rooftop solar, energy storage, and other connected resources to reduce energy demand and provide electricity during peak hours.

The Rise of Virtual Power Plants:
Unlike traditional power plants, a virtual power plant does not rely on a physical facility to generate electricity for distribution. Instead, it employs advanced software to aggregate and coordinate small-scale, decentralized resources present in customers’ homes and businesses. By integrating devices like electric vehicles, chargers, HVAC systems, and solar-plus-battery energy storage, a VPP can meet grid demands effectively.

How SDG&E’s VPP Works:
SDG&E’s VPP network involves a diverse range of devices, prominently featuring smart thermostats, well water controllers, and battery energy storage systems. This unconventional approach sets it apart from most other VPPs that usually focus on a single type or brand of device. The pilot takes place in Shelter Valley, a remote community in eastern San Diego County, and has successfully demonstrated its capabilities during peak demand periods.

Optimization and Participation:
Through the VPP, participants receive notifications about potential power adjustments or discharging electricity to support the grid during high-demand periods. While some devices offer an opt-out option, battery storage participation is mandatory. The pilot has seen an impressive low opt-out rate, indicating the willingness of participants to contribute to a more reliable and sustainable energy grid.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The energy market is highly volatile, and readers should conduct thorough research before making any investment decisions.