Quadrupling Virtual Power Plants Could Save US Grid $614 Billion

The United States could avoid $614 billion in grid investments if it more than quadruples its virtual power plant capacity to 524 gigawatts by midcentury, according to a report published Thursday by consultancy The Brattle Group on behalf of The Pew Charitable Trusts.

As of 2025, the country has 113 GW of distributed energy resources — rooftop solar, home batteries and other remotely controlled equipment — that could participate in virtual power plants. Utilities dispatch these aggregated assets at moments of peak demand to free up capacity on infrastructure that already exists. Scaling them to 524 GW by 2050 would also cut the average household electricity bill by $122 per year, the report estimates.

The study arrives as utilities face an unenviable forecasting problem. Nobody knows how much power the data center boom will actually require. Underinvest, and reliability and economic growth suffer. Overinvest, and customers pay decades for plants and wires nobody needs.

What does the VPP hedge look like?

The report's contribution beyond prior analyses is its treatment of VPPs as insurance against a data center bust. Brattle modeled a nationwide scenario in which actual load growth falls 5% short of forecasts between now and 2030. In that case, overbuilt power plants and grid infrastructure add roughly $84 billion in costs borne by US utility customers from 2030 to 2040. Expanding VPPs cuts those overbuilding costs by $33 billion — about 40%.

The advantage is flexibility, said Ryan Hledik, a principal at Brattle and lead author of the report. "These are smaller modular resources we can bring online, once the necessary systems are in place," he said. "You can wait longer to figure out if that demand is actually going to appear, and then build the VPP at that point."

The stakes for forecasters are unusual. "I'm not envious of anyone whose job is load growth forecasting. I think they're facing a level of uncertainty no one has faced before — certainly not in my 20 years of analysis," Hledik said.

The findings track with earlier work showing that paying homes and businesses to curtail use or share solar and battery power at peak times can cost less than building new plants. The catch: utility planners must trust that VPP capacity will dependably show up before they forgo conventional investment.

Who pays when forecasts miss?

States are already pushing utilities to adopt special rules and rates to protect customers from stranded infrastructure built for data centers that never materialize, Hledik noted. How completely those policies insulate ordinary ratepayers, particularly in worst-case scenarios, remains unclear.

VPPs are not free. Participants must be compensated, and programs carry implementation costs. Brattle's analysis finds the grid benefits exceed participant payments. If the capacity proves unnecessary, payments can be adjusted downward — though Hledik conceded that approach has limits. "If your incentives are really volatile, the program is going to lose some of its attractiveness," he said. Still, volatile incentives beat paying for an unneeded power plant or substation for decades.

What happens next?

The next step is embedding VPP benefits in utility grid planning, said Maureen Quinlan, senior manager of energy modernization at The Pew Charitable Trusts. Pew has published a policy playbook and a state policy explorer tool outlining approaches including VPP mandates, which Colorado, Illinois, Maryland and Virginia have already passed.

Hyperscalers themselves may accelerate the trend. Hledik cited Google's work with VPP aggregator Voltus to secure a gigawatt of distributed capacity across PJM Interconnection, the country's largest energy market. "I really hope that a focus of the industry and regulators will be removing barriers to the hyperscaler bring-your-own distributed capacity model," he said. "Certain hyperscalers have the resources to dramatically transform things on the demand side."

The milestone to watch is whether state mandates and PJM-style hyperscaler procurement translate the 524 GW projection into signed planning assumptions.