California could save big if virtual power plants target ​‘sweet spots’

New report finds that California could save $13.7 billion by using rooftop solar, batteries, and EVs to relieve pressure on the right parts of stressed-out local grids. The savings result from intelligently using these distributed resources to defer increasingly costly grid upgrades.

Counterintuitively, the analysis found the biggest bang for the buck came from prioritizing “areas with circuits, transformers, and substations that are least strained — and rapidly scale up virtual power plant programs to serve them.”

“For the research, Kevala compiled data on every feeder line, substation transformer, and substation of California’s three biggest utilities from today through 2030. It then ran three scenarios for using that 3.5 GW of load flexibility to relieve strain on that infrastructure: spreading the VPP effort equally across the grid, targeting the most overloaded parts of the grid first, and prioritizing the least overloaded parts.

That last technique was by far the most cost-effective, the analysis showed. Putting it into practice could reduce grid costs passed on to utility customers by a total of $13.7 billion through 2030 — about $10 billion more than the alternative approaches.

The reason? Taking on the least overloaded circuits first allows the same amount of load flexibility to defer new investments across a wider swath of the low-voltage grid, O’Connell said. The strategy also happens to target more urban areas, where much of the grid is buried underground, making it more expensive and difficult to upgrade.”