Duke Energy is starting to experiment with virtual power plants. What is that?
Imagine if your home and thousands around it conserved or stored enough energy to effectively offset a power plant fired by fossil fuels like coal or natural gas.
This idea, called a virtual power plant, isn’t science fiction. Powered by solar panels, battery storage and electric vehicles, it’s on its way to becoming reality, including in North Carolina.
“What if we could do this in a way that was seamless and easy for citizens? What if we could reduce our energy usage and possibly pull power from citizens who agreed to be part of the program to be able to add to the electric grid, increasing the efficiency of the grid enormously?” U.S. Department of Energy Secretary Jennifer Granholm said during a recent Charlotte visit.
Duke Energy is poised to start experimenting with virtual power plants, said Lon Huber, the power giant’s senior vice president of pricing and customer solutions. In an N.C. Utilities Commission filing, Duke proposed a solar plus storage pilot program that would allow it to take control of customers’ battery storage up to 36 times per year in return for an incentive payment.
The key benefit of virtual power plants for Duke, Huber said, would be the ability to move electricity demand around in order to limit what it needs to generate at high-usage times and dispatch energy at lower usage times.
A given home, for example, might have appliances, a water heater and a pool pump all connected to Wi-Fi. And increasingly, electric vehicles are charging in the garages of North Carolinians.
A Duke Energy employee might not know what each device is, but the company can tell that their total energy usage amounts to that of a power plant fired by nuclear or natural gas or solar and needs to be curbed when usage is high.
“What you’re doing is you’re aggregating all these controlled appliances and bringing that up to a scale that you typically see at a power plant in megawatts,” Huber said.
With the proposed Duke Energy incentive program, the utility is asking to call upon customers’ batteries up to 18 times a year between December and March, nine times between May and September and nine other occasions throughout the year. Customers would be able to opt out of the program four times each year before losing the incentive.
Duke would not pay customers for the energy it draws, but, rather, would give customers a monthly incentive of up to $6.50 per kilowatt hour. The utility offers a similar program already for customers’ heating and air systems.
Within five years, Duke plans to enroll about 3,500 homes in the program
“By controlling participants’ battery storage systems, the Company will be able to reduce the energy and capacity needs on the grid. That reduction in capacity will be especially beneficial for winter capability, shifting of solar in the winter, and to meet ongoing actions the Company is taking to meet carbon-free goals,” Kathleen Richard, a Duke attorney, wrote in the Utilities Commission filing.
Other virtual power plant efforts could, Huber said, look like delaying charging of electric vehicles for a few hours, until peak demand has passed.
North Carolina was Granholm’s first stop on a swing through four Southern states to discuss how investments under the Biden administration could have the United States poised for a clean energy future. The administration is in the midst of a three-week effort touting its investments, including an estimated $2.7 billion invested in carbon free power by 2030 as part of the Inflation Reduction Act.
“This is an amazing moment. We are in this decision-making process and this investment process at a time when we actually have resources to make a difference,” Granholm said.
The Department of Energy is working on a series of reports that describe how existing carbon-free energy technology can be made commercially viable. Virtual power plants are the topic of one such report that the Department expects to release later this year.
“It’s early stage, but it is really seriously being deployed and thought about in a number of areas of the country,” Granholm said,
The company Sunrun, for instance, is building a virtual power plant that can power more than 7,000 homes in Puerto Rico, an effort to add resiliency to the island’s storm-battered grid. And in April, the Department of Energy gave Sunnova a conditional $3 billion grant to bring between 75,000 and 115,000 homes online as part of a 568 megawatt virtual power plant project designed around rooftop solar and batteries.
Arshad Mansoor, the president and chief executive officer of the Electric Power Research Institute, told Granholm that virtual power plants can play a key role in the transition, reducing the expected huge demand for new power generation and infrastructure while helping consumers.
Developing software to help utilities better control resources would be key, Mansoor said. To show the opportunity, he pointed to expected demand in Texas where a heat dome was straining the grid. Being able to take command of a million water heaters there or anywhere else would, Mansoor said, lower the demand by two gigawatts.
“If you have a million EVs and a million water heaters and a million thermostats that are in a managed program, you have a significant amount of resources that you can reduce the stress on the grid during the most stressful moment like what we are seeing in Texas right now,” Mansoor said.
This story was produced with financial support from the Hartfield Foundation and 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
This story was originally published July 1, 2023 at 7:00 AM.