LPO announces MOU with EPRI to support deployment of reliable, affordable, and equitable virtual power plants

Department of Energy LPO
January 13, 2024


The U.S. Department of Energy (DOE) Loan Programs Office (LPO) today announced a memorandum of understanding (MOU) with EPRI, an independent energy research and development non-profit, to improve understanding and integration of virtual power plants (VPPs) in the nation’s electric grid. The collaboration will seek to identify solutions in key areas such as systemwide planning, integrated system operations, and the broader adoption of distributed energy resources. With progress across these areas, VPPs can increase reliability, resilience, and cost-savings for energy customers of all income levels.

“With fossil fuel power plants retiring at the same time as electricity demand is growing for the first time in a decade, deploying 80-160 GW of VPPs by 2030—tripling the current scale—is the fastest and most cost-effective way to support electrification,” said LPO Director Jigar Shah. “VPPs can redirect spending from peaker plants to participants from all walks of life while delivering a smarter and more efficient grid.”

The MOU builds on EPRI’s recent contribution to DOE’s Pathways to Commercial Liftoff VPP report, which highlighted the benefits and challenges to widespread VPP deployment. According to DOE’s liftoff report, between 2023 and 2030, the U.S. will need to add enough new capacity to serve over 200 GW of peak demand. To meet the Biden-Harris Administration’s goal of achieving a net-zero power grid by 2035, new capacity needs could nearly double. The shift to more renewable and distributed energy resources will lead to more variable electricity supply and higher demand for transmission capacity. Modernizing and investing in today’s U.S. distribution grid will be a key element to meeting tomorrow’s opportunities.

“Getting the grid ready for increased electrification, variable renewables, heat pumps, growing demand from data centers and more—all while improving energy resilience—takes tremendous investment and expansion. By increasing the use of existing assets, VPPs are one tool that can help bridge the gap towards an affordable, equitable, and reliable clean energy transformation,” said EPRI President and CEO Arshad Mansoor. “This MOU with DOE LPO will harness the collective strength of our expertise, working together to address VPP challenges and opportunities as part of the clean energy transition.”

Through meetings, information exchange, and workshops, EPRI and LPO aim to coordinate efforts to achieve effective utilization of VPP technologies and identify technical, regulatory, and commercial solutions to deployment of robust VPP programs across the United States. This includes identifying how modern architectures, technical standards, and integrated operations complement other considerations of VPP program development such as customer engagement, market impact, and cost-benefit analyses that capture the local and systemwide value of VPPs. Refining observations into actionable resources will engage each organization’s technical and experiential competencies to enable operation of a more flexible grid. For LPO, this may include leveraging the depth of technical, financial, analytical, and policy expertise across the DOE; for EPRI, it may include designing and hosting data-gathering demonstrations, sharing resulting data for analysis, and layering on customer and technology-specific insights.

About LPO

The Department of Energy’s Loan Programs Office finances large-scale, all-of-the-above clean energy infrastructure projects in the United States. LPO manages a portfolio comprising more than $30 billion of loans, loan guarantees, and conditional commitments covering more than 30 projects, resulting in more than $50 billion in total project investment.

About EPRI
Founded in 1972, EPRI is the world's preeminent independent, non-profit energy research and development organization, with offices around the world. EPRI's trusted experts collaborate with more than 450 companies in 45 countries, driving innovation to ensure the public has clean, safe, reliable, affordable, and equitable access to electricity across the globe. Together, we are shaping the future of energy.