NEWS: Can VPPs offer hyperscalers speedy capacity? Google is betting on it.

Yesterday, Google broke the news of a VPP deal with operator Voltus. The network is set to launch next year, targeting up to 100 MW of resources annually. How it works: The tech giant will pay Voltus to aggregate DERs from PJM homes and businesses and send that power to its data centers. Voltus then compensates participating PJM customers…who are certainly in need of relief. 

Zooming out: This is the first hyperscaler-funded VPP, the companies claim—but more are likely to follow. Google is the first (announced) customer for Voltus’s “bring your own capacity” program, which aims to help data centers quickly secure watts over the next few years (as projects sit in interconnection queues and developers put power equipment on back order).

The signal: This deal “creates a new pathway for bringing capacity online quickly,” Ryan Hledik, principal at the Brattle Group, told Energy Central over email. “When Google and Voltus prove this works, it will be a model for others to follow.” 

What about utilities’ VPPs? If the trend catches on, the parallel operations of utility-led and hyperscaler-funded programs could “create some complexity,” Hledik said. “But that complexity has existed for decades and has not prevented the demand-response industry from moving forward.” Beginning in the early aughts, he noted, US aggregators scaled up DR in wholesale markets—without edging out utility programs.