Wood Mackenzie lists Autogrid and CPower top VPP operators as they join VP3
California-based Autogrid and Maryland-based CPower Energy Management have both joined the VP3 initiative, a Virtual Power Plant (VPP) partnership formed by Rocky Mountain Institute (RMI). This comes at the same time as Wood Mackenzie hails both as part of the top four VPP operators in North America.
Announced earlier this year in January, based at RMI and formed with founding members such as General Motors (GM), Ford and Google Nest, among others, the VP3 initiative aims to transform policy, up-scale VPPs and overcome barriers to VPP market growth.
With the guidance and support of its members, the partnership aims to:
- Catalogue, research and communicate VPP benefits
- Develop industry-wide best practices, standards and roadmaps
- Inform and shape policy development
Software company AutoGrid’s CEO Ruben Llanes commented on their joining the initiative, claiming the partnership’s objectives as closely aligned with their own, “to leverage AI and technological innovation to combat the climate crisis.
“As a company that has been at the forefront of VPP development, we are excited to collaborate with RMI and other industry leaders to establish a common set of standards and performance metrics for VPPs that will support customers around the world in adopting VPPs and in reaching their decarbonisation goals.”
AutoGrid was acquired in 2022 by Schneider Electric, and has stated the parent company’s prosumer-to-grid strategy as a strategic complement to VP3.
Electric utility company CPower on the other hand touted their experience in managing flexible capacity: “We are proud to join our industry colleagues as a member of RMI’s VP3 initiative and lend CPower’s experience in managing the most flexible capacity of any VPP provider in the US,” said John Horton, president and CEO, CPower.
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Market leading operators
Announcements of the VP3’s latest partners coincided with Wood Mackenzie’s report, North America VPP market: H1 2023 report, which lists the top four VPP operators in the US as CPower, Enel, AutoGrid and Voltus, each of whom have portfolios greater than 4,000MW in North America, which would place each within the top ten largest independent power producers in the US.
The report also found the top four states by VPP deployment as California, New York, Texas and Massachusetts.
The report finds that the landscape of VPP operators is highly concentrated, with seven operators having over 1GW of disclosed capacity under management.
“VPPs continue to receive growing attention from the energy industry. Our new market study unveiled California as the clear leader, containing more VPPs than the three follow-up US states combined,” said Ben Hertz-Shargel, global head of grid edge at Wood Mackenzie.
VPPs: trends and EV as priority
According to Hertz-Shagel, results from Wood Mackenzie’s study indicate a trend of the demand side gaining prominence; the reverse has traditionally been true as supply usually takes priority.
And when it comes to how VPPs operate, their study emphasises a gap: EVs have not reached the level of penetration in VPPs that behind-the-meter batteries have.
Nearly all participation today, states Wood Mackenzie, involves charging curtailment, with vehicle-to-grid functionality remaining at the pilot phase.
The analysis found that among the 50% of VPPs that incorporate EVs outside of California, very few are market integrated, with 68% participating in utility residential demand response or managed charging programs.
“Considerable first-mover advantage, therefore, remains to bring EV flexible capacity to utilities and wholesale markets. This is particularly true for public EV charging stations and commercial and municipal fleet depots, many of which will be deployed with collocated storage and will be capable of providing advanced grid services,” Hertz-Shargel concluded.
