How virtual power plants could provide energy for data centers

Imagine being paid to use less electricity. It sounds like a win-win, but would you do it to help power a nearby data center? Google has just signed a deal with Voltus, a leading virtual power plant (VPP) and distributed energy resources platform, to find out.

The agreement will see Voltus set up a virtual power plant, aggregating devices like electric vehicles and smart thermostats to reduce energy demand during peak periods. Google will cover the costs, and the extra capacity generated will help power its data centers in the region. This is one of the most concrete examples of a tech giant using a VPP to meet energy demands for data centers.

The idea of data center flexibility gained traction last year, particularly after a study from Duke University found that if data centers reduced their energy demand for around 40 hours per year, 100 gigawatts of new capacity could be added without the need for new power plants or transmission equipment. The grid is designed for peak demand, not average usage, so flexibility can help. However, incentives remain a challenge.

Data centers might not have flexible loads, especially with AI use on the rise. Regulation could be one solution, with proposals like allowing new data centers to come online sooner if they agree to reduce demand during peak periods. Another approach is for data center operators to pay for flexibility elsewhere, which is where Voltus comes in.

Voltus' 'Bring your own capacity' program allows data centers to finance flexibility on their local grid. Google is the first named customer to take advantage of this program, which will see Voltus pay participants to reduce energy usage. The virtual power plant will be part of PJM, the grid covering much of the US East Coast, and will aggregate up to 100 megawatts of distributed energy resources annually.

'There is no one solution for expanding grid capacity and we're continuing to explore all options, including the many avenues for load flexibility,' said Michael Terrell, Google's global head of advanced energy. The success of this project will depend on participation, but it's an interesting step towards a more flexible energy future. The question remains: will people agree to be flexible with their energy usage?

A study in California found that only 1% of EV owners enrolled in managed charging without an economic incentive, while 4.6% signed up for a $40 monthly payment. As we move from idea to implementation, it'll be crucial to see whether trial runs like this one work as intended.