San Diego Gas & Electric launches virtual power plant pilot in effort to reduce demand on grid

Published on September 06, 2023 by Chris Galford


Reckoning with ongoing extreme heat in the West, San Diego Gas & Electric (SDG&E) announced development last month of a new pilot for a virtual power plant, meant to leverage connected resources to reduce energy demand during peak hours.

Grid strain in such heat is unavoidable, and SDG&E seeks to centrally manage items like customer-owned smart thermostats, rooftop solar, energy storage and water pumps to make a difference. As the name implies, VPPs have no physical facility to generate electricity. They use software to coordinate small-scale, decentralized smart appliances and equipment at customers’ homes and businesses in coordination with grid operations to power things down or discharge electricity from existing resources back to the grid as needed.

While most VPPs only utilize a single brand or type of device, though, SDG&E’s manages multiple at the same time.

“The beauty of a virtual power plant is it can leverage existing resources to provide significant grid reliability benefits – with zero incremental emissions,” SDG&E Chief Commercial Officer Miguel Romero said. “When hundreds or thousands of businesses or homes are connected to a VPP and their resources are flexibly managed to charge or discharge electrons, they can help keep the lights on during hot summer days.”

The actual deactivation of devices by VPP is not automatic, though, as customers can still provide input. VPP participants are messaged about the possibility of turning off or discharging electricity to support the grid, and they can either opt out for certain devices or give the go-ahead. SDG&E noted that the opt-out rate has so far been very low.

Throughout August, SDG&E’s new VPP was deployed three times during peak demand periods, without issue. It worked so well, SDG&E is considering expanding the program to other areas beyond San Diego County’s Shelter Valley. In its current form, the pilot made use of single-family homes with existing rooftop solar and the Shelter Valley Community Center.