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VPP research, rules and reports

The federal rules, state laws, grid operator pilots and major studies behind virtual power plants, summarized with links to the originals.

Rules and programs that shape VPPs

FERC Order No. 2222

  • FERC Order No. 2222, issued September 17, 2020, lets distributed energy resources such as rooftop solar, batteries, smart thermostats and EV chargers take part in regional wholesale electricity markets through aggregations. Source
  • FERC updated the order in 2021 with Orders 2222-A and 2222-B. Source
  • Grid operators must allow aggregations as small as 100 kW. Source
  • FERC's implementation timeline: CAISO complete as of November 2024; ISO-NE capacity market February 2026 and energy/ancillary services November 1, 2026; NYISO end of 2026; PJM capacity February 1, 2027 and energy February 1, 2028; MISO Phase 1 June 1, 2027 and Phase 2 June 1, 2029; SPP second quarter of 2030. Source
  • Order 2222 does not apply in Texas's ERCOT region, which is outside FERC's wholesale-market jurisdiction. Source

DOE Pathways to Commercial Liftoff: Virtual Power Plants (2023) and 2025 update

  • DOE released the VPP Liftoff report on September 13, 2023. Source
  • The 2023 report estimated 30 GW to 60 GW of US VPP capacity, mostly from demand-response programs. Source
  • DOE's target is 80 to 160 GW of VPPs by 2030, enough to serve 10 to 20% of peak load. Source
  • DOE projected about $10 billion a year in grid cost savings if the 2030 target is met. Source
  • DOE has since published a 2025 VPP Liftoff Update, which says VPP scale 'has grown to 33 GW across North America.' Source

Brattle Group 'Real Reliability: The Value of Virtual Power' (2023)

  • Brattle published the study, sponsored by Google, on May 2, 2023. Source
  • The study compared 400 MW of resource adequacy from a natural gas peaker, a utility-scale battery and a VPP of residential demand-flexibility technologies. Source
  • It found the net cost to a utility of getting resource adequacy from a VPP is roughly 40 to 60% of the cost of the alternatives. Source
  • It estimated that 60 GW of VPP deployment could save $15 to $35 billion over ten years compared with conventional approaches. Source

ERCOT Aggregate Distributed Energy Resource (ADER) pilot

  • The PUCT-backed ADER pilot let small resources sell into ERCOT through aggregations, starting with an 80 MW cap. Each aggregation must total at least 100 kW, and individual devices must be under 1 MW. Source
  • In August 2023, two Tesla Powerwall aggregations (CenterPoint/Houston and Oncor/Dallas areas) became the first VPPs in the pilot. Source
  • In late 2024 ERCOT proposed doubling the cap from 80 MW to 160 MW. At that time Tesla and Bandera Electric Cooperative accounted for about 15 MW. Source
  • Under Phase 3 (approved June 24, 2025), ERCOT raised the system-wide limit from 160 MW to 200 MW on October 24, 2025, and raised the per-QSE limit from 20% to 50%. Source
  • An ERCOT update in spring 2026 listed a 500 MW energy limit, 100 MW limits for each of two ancillary services and a 90% per-QSE limit. Source
  • As of ERCOT's August 2026 Phase 4 presentation, 249 MW of the 500 MW limit was enrolled. Phase 4 proposes Aggregate Distributed Energy Storage Resources (ADESRs) with nodal dispatch of aggregated batteries, and targets a Board vote in December 2026. Source

California Demand Side Grid Support (DSGS) program

  • The California Energy Commission launched DSGS in August 2022. It pays participants to cut use or send energy to the grid during grid stress, in a May-to-October season. Source
  • As of October 2024, DSGS had enrolled 515 MW and over 265,000 participants. Its battery VPP option exceeded 200 MW, which the CEC called one of the largest storage VPPs in the world. Source
  • In the 2024 season, the VPP component was activated 16 times during four summer heat waves. Source
  • The Fifth Edition guidelines (April 2026) say $109.5 million has been allocated to date with no new funding in the 2025-26 Budget. Option 1 is suspended for 2026 because of budget constraints. Source
  • For 2026, the storage VPP option (Option 3) is limited to aggregators that took part in October 2025, except aggregators of bidirectional EV chargers, and $19.5 million is available for its capacity payments. Source

Berkeley Lab (LBNL) and RMI VPP research

  • On January 16, 2025, Berkeley Lab released five reports on VPPs and DER aggregations, including '30 Proven Strategies to Increase VPP Enrollment' and a VPP Profiles and Inventory. Source
  • The LBNL inventory catalogs over 790 demand-response and NEM solar-plus-battery programs and 180 distinct VPP programs. Source
  • LBNL's maturity model groups demand flexibility into six capabilities: planning and design, customer engagement, program operations, evaluation and measurement, resource orchestration, and data infrastructure. Source
  • RMI's 2025 VP3 progress report found that in 2024, 10 state legislatures introduced VPP bills, regulators in 4 states plus DC advanced VPP policies, and utilities in 34 states and Puerto Rico started or expanded programs. Source

Texas SB 1699 (88th Legislature, 2023)

  • SB 1699 took effect September 1, 2023. Source
  • A person aggregating distributed energy resources 'is not required to register as a power generation company to aggregate the resources.' Source
  • It authorizes the PUC to 'establish rules and registration requirements for the aggregation of distributed energy resources,' and aggregators stay accountable for their subcontractors and agents. Source
  • It directs the PUC to set residential demand-reduction goals, including demand-response participation for residential customers and wide deployment of smart responsive appliances and devices by December 31, 2024. Source
  • Transmission and distribution utilities may put up to 10% of their energy-efficiency budgets toward demand-response programs. Source

Key reports

  1. Electricity 2026 - Flexibility chapter
    International Energy Agency, 2026

    Only around 100 GW of demand response is used worldwide, and much of the flexibility in buildings has yet to be mobilised.

  2. Lessons Learned from Puerto Rico's First Virtual Power Plant
    Clean Energy States Alliance, 2026

    LUMA's Customer Battery Energy Sharing program helped cover a nearly 50 MW generation shortfall in summer 2025, preventing outages.

  3. Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update
    U.S. Department of Energy, 2025

    VPP adoption has grown since 2023, but it still needs to speed up to reach 80-160 GW, or 10-20% of peak load.

  4. Virtual Power Plants: Insights, Profiles and Inventory
    Lawrence Berkeley National Laboratory, 2025

    The inventory catalogs more than 790 demand response and solar-plus-battery net metering programs and 180 VPP programs.

  5. Distributed Energy, Utility Scale: 30 Proven Strategies to Increase VPP Enrollment
    Lawrence Berkeley National Laboratory, 2025

    Sets out 30 strategies for growing VPP enrollment, with specific actions for regulators, utilities and VPP providers.

  6. State Regulatory Opportunities to Advance Distributed Energy Resource Aggregations in Wholesale Markets
    Lawrence Berkeley National Laboratory, 2025

    Lists actions state regulators can take to help implement FERC Order 2222.

  7. Assessing VPP Performance: Impacts of a Test Event in California
    The Brattle Group (for Sunrun and Tesla), 2025

    The July 29, 2025 test produced 535 MW of average output over two hours during CAISO's net peak, with steady output and no performance drop-off.

  8. 2025 North America Virtual Power Plant Market Report (press summary)
    Wood Mackenzie, 2025

    North American VPP capacity reached 37.5 GW, up 13.7% year over year. Program caps, accreditation reforms and market barriers kept capacity growing more slowly than market activity.

  9. The Value of Demand Flexibility
    International Energy Agency, 2025

    Demand flexibility improves use of existing generation and network assets, reduces peak stress, lowers losses and curtailment, and helps integrate clean energy.

  10. Power Shift: How Virtual Power Plants Unlock Cleaner, More Affordable Electricity Systems
    RMI, 2024

    In RMI's case study, VPPs cut net generation costs by 20%, or $140 per household per year, and reduced the need for new gas capacity by 75%.

  11. Pathways to Commercial Liftoff: Virtual Power Plants
    U.S. Department of Energy, 2023

    U.S. VPP capacity is estimated at 30-60 GW, and deploying 80-160 GW by 2030 could save on the order of $10 billion a year in grid costs.

  12. Real Reliability: The Value of Virtual Power
    The Brattle Group (sponsored by Google), 2023

    A 400 MW residential VPP could be as reliable as a gas peaker or utility battery, at roughly 40-60% of their net cost; 60 GW of VPPs could save $15-35 billion over 10 years.

  13. September 2022 Heat Wave Analysis
    Public Advocates Office (California PUC), 2022

    During the September 2022 heat wave, demand response, an emergency text alert and battery storage (peaking at 2,839 MW on Sept 6) helped avoid rolling blackouts.

  14. AEMO Virtual Power Plant Demonstrations - Knowledge Sharing Report 4
    Australian Energy Market Operator, 2021

    Household batteries proved highly effective at providing contingency frequency control services, and VPPs reached 3% of that market by April 2021.

  15. Preliminary Root Cause Analysis: Mid-August 2020 Heat Storm
    CAISO, CPUC and California Energy Commission, 2020

    Resource planning targets had not kept pace with early-evening demand, which, together with the extreme heat and some day-ahead market practices, led to the August 2020 rotating outages.

  16. Expanding PV Value: Lessons Learned from Utility-led Distributed Energy Resource Aggregation in the United States
    National Renewable Energy Laboratory, 2018

    Across 23 utility-led aggregation efforts, DER aggregation provided frequency response, load shifting and voltage regulation. Utilities faced common hurdles with software, customer recruitment and communications.

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