TODAY’S DISRUPTIVE BLOG

Virtual power plants are turning household devices into capacity for the AI economy

Dennis G. Perry, PhD, MBA  |  Chief Technology Officer, Secure Energy

July 21, 2026

The Disruption

The electricity industry has spent a century solving growth by building more. More generators, more substations, more transmission. The AI boom is exposing the weakness of that reflex. New plants and wires take years. Data centers want power now.

Virtual power plants offer a different answer. Software aggregates thousands or millions of distributed assets, including batteries, electric vehicles, smart thermostats, and flexible commercial loads, and dispatches them as a single grid resource. North American VPP capacity reached 37.5 GW in 2025, up 13.7 percent in one year [1]. The Department of Energy identified this pathway as a commercial liftoff opportunity three years ago [2]. The physical assets already exist. What has been missing is the commercial and control layer that makes them behave like a power plant.

The Business Model Just Changed

Google and Voltus have built something more consequential than a conventional demand response contract. Under a three-year Bring Your Own Capacity agreement, Google will fund the aggregation of up to 100 MW annually across PJM. Voltus will recruit local homes and businesses, operate their flexible devices as a virtual power plant, and pay participating customers [3], [4].

That is the structural shift. The new large load pays to unlock the capacity it needs. Capacity procurement moves from a utility rate base decision to a bilateral transaction between the load and the aggregator. Every ratepayer no longer finances a new plant by default.

Read the Gigawatt Numbers Carefully

Sunrun, Renew Home, and Tesla announced a framework to aggregate more than 16 GW of flexible residential capacity for hyperscalers and utilities, drawing on hundreds of thousands of home battery systems and more than 8 million smart thermostats and connected devices [5].

Treat that headline with discipline. Sixteen gigawatts is a theoretical aggregate of rated battery capacity plus short-duration load shift potential. It is not firm, around-the-clock generation, and it is not accredited capacity. The deployable figure is the one that matters. The companies report more than 300 MW available for immediate deployment in Virginia, rising to at least 500 MW by 2030 [5]. Three hundred megawatts is a fraction of a single hyperscale campus.

The direction is right. The accounting has to stay honest, because capacity that cannot be verified cannot be dispatched, accredited, or paid for.

Why This Matters

The immediate prize is speed. Virtual power plants add usable capacity without waiting on a greenfield plant, a fuel supply, or a major transmission project. They also direct some of the AI economy’s spending back to the households and businesses that provide the flexibility.

The deeper disruption is architectural. The grid is becoming a distributed computing system, and its most valuable asset may turn out to be orchestration rather than generation.

The Blind Spot: Cyber-Physical Trust

That architecture also creates a dangerous concentration of control. A single platform may issue commands across batteries, HVAC systems, vehicles, and industrial loads owned by thousands of separate parties. Compromised identity, manipulated telemetry, insecure device firmware, or a malicious dispatch command could turn a reliability resource into a coordinated grid disturbance. Scale multiplies the value and the blast radius at the same rate.

The industry cannot treat cybersecurity as something applied after aggregation. Trust has to be designed into the control plane from the beginning. Operators also need transparent rules governing consent, availability, compensation, and control authority. Without that foundation, “virtual power plant” becomes a euphemism for a large, remotely accessible attack surface.

This is not a vendor talking point. It is why NIST SP 800-82 Rev. 3 exists, and it is why NERC CIP applicability for aggregated distributed energy resources remains an unsettled regulatory question.

What to Watch

Watch whether the Google and Voltus structure becomes standard in PJM and other constrained markets. Watch whether promised gigawatts convert into dependable, measurable, accredited capacity. Watch whether regulators let virtual power plants compete on equal terms with conventional generation.

Most of all, watch who owns the orchestration layer and how it is secured. The companies that win will not merely connect devices. They will prove, continuously, that every participant, every measurement, and every dispatch instruction can be trusted.

Bottom Line

AI’s power shortage will not be solved only by building new power plants. Part of the answer is turning the appliances, batteries, and vehicles already scattered across the grid into a secure, dispatchable fleet.

The strategic mistake is to treat virtual power plants as an energy optimization product. They are becoming critical infrastructure. The control plane will matter as much as the megawatts.

References

[1] Wood Mackenzie, “North America Virtual Power Plant Market Report 2025,” September 2025, as reported in B. Martucci, “In 2026, virtual power plants must scale or risk being left behind,” Utility Dive, January 27, 2026. https://www.utilitydive.com/news/in-2026-virtual-power-plants-must-scale-or-risk-being-left-behind/810321/

[2] U.S. Department of Energy, “Pathways to Commercial Liftoff: Virtual Power Plants,” September 2023. https://liftoff.energy.gov/wp-content/uploads/2023/09/20230911-Pathways-to-Commercial-Liftoff-Virtual-Power-Plants_update.pdf

[3] Google, “We’ve signed a first-of-its-kind agreement with Voltus to create a smart capacity solution for the grid,” June 2, 2026. https://blog.google/company-news/outreach-and-initiatives/sustainability/voltus-agreement/

[4] Voltus, Inc., “Voltus and Google to Deliver Grid Capacity and Local Economic Benefits Through Bring Your Own Capacity Agreement,” June 2, 2026. https://www.voltus.co/press/voltus-google-bring-your-own-capacity-pjm

[5] Sunrun Inc., “Sunrun, Renew Home, and Tesla Team Up to Deliver More Than 16 Gigawatts of Fast, Flexible Power for Data Centers and Large Loads,” June 24, 2026. https://investors.sunrun.com/news-events/press-releases/detail/372/sunrun-renew-home-and-tesla-team-up-to-deliver-more-than

“He who is faithful in a very little thing is faithful also in much.”

Luke 16:10, NASB