Virtual power plants are gaining momentum in the USA

Decisions made in Massachusetts and Minnesota show that virtual power plants are taking a larger role in electricity grid management.

Scraper SystemJune 04, 2026, 09:17 PM

Virtual power plants are gaining momentum in the USA

As electricity demand increases, some US states are placing virtual power plants more at the center of grid management. These systems, based on managing distributed resources from a single center, are used to strengthen energy supply and meet short-term peak demand more cleanly and at lower cost.

The decree issued by Governor Maura Healey in Massachusetts on March 13 aims to increase energy supply and affordable electricity. The plan foresees the creation of 3.5 gigawatts of demand management resources by 2035; virtual power plants can also be included under this heading.

The decree also includes management of electric vehicle charging, energy efficiency, and demand response programs. With the report expected to be published by the state administration in September, an inventory of existing demand management and related energy programs will be compiled.

The scale of this goal is remarkable. While the highest demand of the New England grid in 2025 is measured at 26.1 gigawatts, one of the largest virtual power plant networks in California reached a peak production of about half a gigawatt in July last year.

The step in Massachusetts has the potential to alleviate some of the costly investments to be made in energy infrastructure. Battery storage is seen as one of the tools that can reduce the need for expensive equipment such as natural gas plants that come online during peak periods.

In Minnesota, regulators approved Xcel Energy's neighborhood-based 200-megawatt battery installation plan on May 13. It was stated that batteries ranging from 1 to 3 megawatts each will be used to increase grid reliability and reduce the need for major infrastructure investments.

The controversial point in this plan is that the batteries will be owned and fully controlled by the company. Consumer advocates argue that distributed virtual power plant models based on batteries located in or leased to homes and workplaces would be more efficient.

Xcel Energy says the Capacity*Connect program is designed to place batteries exactly where they are needed on the grid. The company argues that ownership is important to operate the batteries safely and reliably.

The difference between corporate ownership and consumer-based distributed models has become central to the virtual power plant debate. Some experts believe that the company's full authority over the batteries could weaken cost control and make the system less flexible.

The scale of virtual power plants is no longer a small side solution. A report published by Lawrence Berkeley National Laboratory in January 2025 revealed that there are about 180 projects in the country with a total potential capacity reaching 19 gigawatts.

This capacity corresponds to almost three-quarters of the highest demand of the New England grid. Concentrated in states like California, Colorado, and Massachusetts, these projects show that virtual power plants have become a tool that must now be taken seriously in the process of moving away from fossil fuels.

Virtual power plants are gaining momentum in the USA

Decisions made in Massachusetts and Minnesota show that virtual power plants are taking a larger role in electricity grid management.