New Report Unveils How States and Utilities Are Advancing Virtual Power Plants in 2024
Raleigh, NC and Washington, D.C. – (February 10, 2025) The NC Clean Energy Technology Center (NCCETC) and the Smart Electric Power Alliance (SEPA) released a new first-of-its-kind report, The 50 States of Virtual Power Plants and Supporting Distributed Energy Resources: 2024 State Policy Snapshot. The new report provides insights on state regulatory and legislative actions related to virtual power plants (VPPs) and distributed energy resource (DER) aggregations.
In 2024, 38 states and the District of Columbia advanced policies and regulatory actions related to VPPs and DER aggregations. States and utilities took a total of 105 actions pertaining to VPPs, with the majority focused on individual state or utility VPP, demand response, or active managed charging programs.
2024 State and Utility Action on Virtual Power Plants
The report highlights four VPP trends in 2024: (1) Utilities are expanding VPP programs, (2) States are establishing frameworks for VPP adoption, (3) Policymakers are launching investigations into VPP opportunities and regulations, and (4) States are evaluating the role of VPPs in net metering policies.
“We’ve seen explosive growth in state and utility activity around VPPs and DER aggregation in the past couple of years,” said Autumn Proudlove, Managing Director – Policy & Markets at NCCETC. “In particular, there is a growing focus on utility programs that leverage battery storage or multiple types of DERs, as well as overarching state frameworks for VPP programs.”
The report also identifies five notable VPP developments in 2024:
- Colorado’s Modernize Energy Distribution Systems Act, a state law that directs Xcel Energy to propose a new VPP program and tariff for performance-based compensation;
- Maryland’s Distributed Renewable Integration and Vehicle Electrification Act, a state law that requires the state’s investor-owned utilities to file VPP pilot proposals;
- Xcel Energy’s Distributed Capacity Procurement Plans, filed by the utility with the Minnesota Public Utilities Commission seeking regulatory approval, would integrate DERs into the utility’s resource plan and procure 400 megawatts (MW) to over 1 gigawatt (GW) of DER capacity;
- Duke Energy’s PowerPair VPP program, approved by the North Carolina Utilities Commission, which includes solar and storage incentives and allows the utility to test different control and tariff models; and
- Washington’s new demand response and flexibility target, a state law that requires Puget Sound Energy to achieve annual demand response and flexibility equal to at least 10% of winter and summer peak demand by January 2027.
“The number of legislative and regulatory policy actions, the diversity of those actions, and the states involved indicate that it was a pivotal year for VPPs and supporting DERs,” said Lakin Garth, Director – Emerging Technology at SEPA. “We anticipate that momentum to continue in 2025 as we expect to see additional policy and utility programs, including at some of the largest investor-owned utilities in the country and in many states with substantial load growth projections.”
As states and utilities continue to explore and implement VPP programs, collaboration between regulators, policymakers, and industry leaders will be key to scaling these solutions. The findings from this report provide a roadmap for stakeholders looking to understand the evolving VPP landscape and harness the potential of DERs to create a more flexible, resilient, and efficient grid.
ABOUT THE NC CLEAN ENERGY TECHNOLOGY CENTER
The NC Clean Energy Technology Center, as part of the College of Engineering at North Carolina State University, advances a sustainable energy economy by educating, demonstrating and providing support for clean energy technologies, practices and policies. It serves as a resource for innovative, sustainable energy technologies through technology demonstration, technical assistance, outreach and training. For more information about the Center, visit: http://www.nccleantech.ncsu.edu.
ABOUT THE SMART ELECTRIC POWER ALLIANCE
The Smart Electric Power Alliance (SEPA), a 501(c)(3) organization with over 1,000 members, accelerates the transition to a clean, affordable, and resilient electricity system for all. SEPA engages with its diverse membership — which includes utilities, technology companies, policymakers, and regulators — through education, collaboration and convening, and the search for innovative policy, regulatory, and technology solutions. For more information, please visit www.sepapower.org.
Media Contact: Shannon Helm, NCCETC, shannon_helm@ncsu.edu