What if energy markets followed the physics of energy?

Issue 36

Hi Friend,

If you have anything to do with energy, you've heard about virtual power plants (VPPs). A lot. The DOE's Jigar Shah, the closest thing this industry has to a celebrity, often talks about them. The highly respected Rocky Mountain Institute (RMI) has launched a VPP advocacy group. And many well-known energy companies now develop VPPs.

This isn't surprising. Virtual power plants make sense. They offer a way to organize today's proliferation of distributed energy resources and derive value from them for consumers, VPP companies, and the grid.

But if our goal is energy democracy — a system that maximizes consumer benefits through distributed energy — are VPPs actually the best way?

I recently interviewed three people who think deeply about the grid, and they propose a different market approach, one that they say better follows the physics of energy and, therefore, allows DER owners to garner more value.

You can listen to the discussion with Kay Aikin, Lorenzo Kristov and Mark Paterson on Apple Podcast. Let me know what you think!

— Elisa Wood

​A Contrarian View on Virtual Power Plants​

Other stories from our magazine...

• ​​Community Solar Needs a Bigger Boat​
• ​Making Rural America into a Climate Migration Mecca with the Help of Distributed Energy​
• ​Community Solar is Having a Moment​​Households as Energy Investors and Other Good Economic Signals for Distributed Energy​
• ​Data Centers as Energy Makers, Not Takers?​​​No One Said You’re Not Green, California. What’s in Question is Your Stance on Distributed Energy​
• ​Technology Isn’t Causing the DER Industry’s Data Woes. It’s People.​

What we're reading...

• ​Could a DER tariff reduce interconnection costs in Virginia?​

The pressure is on to fix interconnection woes that delay distributed energy resources (DERs) in the data center-heavy state of Virginia. One possible solution is a DER tariff recently proposed to regulators by a working group. The approach has yet to be used in any US state, but proponents say it would reduce interconnection costs by spreading them across a larger pool. The tariff is meant to eliminate the ‘last man in’ problem that leaves the latest developer in the interconnection queue footing the bill for any required new upgrades.

• ​Startup says it has the solution for apartment dwellers that want solar (Nope, it’s not community solar)​

Allume Energy, an Australian startup company, is coming to the US with a technology that it says allows apartment dwellers to share in rooftop solar, using only one inverter and wiring. Called SolShare, the technology sends electricity directly from the building’s solar array to individual apartments, bypassing the grid. “We’re physically pushing the electrons to multiple meters,” says Aliya Bagewadi, US director of strategic partnerships for Allume Energy, in an Energy News Network article.

• ​Clean energy jobs grow at double the rate of US economy​

A detailed report released this week by the US Department of Energy shows clean energy taking a dominant position in job creation. There’s a lot in the report, but here are some highlights.

—Clean energy jobs grew by 4.2%, more than twice the 2% for the overall economy

—Energy added over 250,000 jobs in 2023; 56% from clean energy

—Energy efficiency offered the most jobs — 75,000 new jobs for a total of 2.3 million.

—The states with the most clean energy jobs are: California (545,207), Texas (261,934), New York (177,202), Florida (172,115), and Illinois (130,473).

—Solar and wind are the largest employers in electricity

—Clean vehicles accounted for 59% of all net new jobs in motor vehicles.

—Unionization rates reached 12.4% in clean energy, the highest yet, surpassing the 11% for energy overall.

—Women accounted for 84% of new jobs in the electric sector

• ​Tesla’s rivals still can’t use its superchargers​

Elon Musk’s plan to open Tesla’s charging network up isn't proceeding quickly. Nobody is sure why, or when that might change. Some fear Musk has changed his mind, reports the New York Times.

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