Voltus is expanding its “bring your own capacity” portfolio for data centers yet again, through an agreement announced today with residential solar and storage provider Sunrun.
BYOC — a framework under which hyperscalers finance a virtual power plant program in a capacity-constrained region, then an aggregator delivers the megawatts to the local utility — is gaining momentum as the timelines for new firm generation, transmission upgrades, and conventional interconnection have continued to stretch.
Voltus launched the first formal BYOC product for data centers last fall, in partnership with data center infrastructure developer Cloverleaf Infrastructure. The portfolio has expanded several times since, including via a partnership with Octopus Energy U.S., which agreed to deliver residential consumer device aggregations in PJM, MISO, New York, and California.
PJM has emerged as the country’s primary testbed for the BYOC framework. The region has been grappling with how to connect a massive pipeline of data center load, and is at the outset of an experiment designed to encourage that load to bring its own generation. That includes encouraging data centers to sign bilateral agreements for new capacity, and eventually requiring those that don’t secure their own capacity to curtail when the grid is stressed. The framework, under consideration at FERC, is a significant win for emerging categories of capacity, including VPPs, experts told Latitude Media.
Voltus, for its part, was actively involved in the design process for the new framework, which could unlock more than 10 GW of flexible capacity and accelerate the employment of distributed storage in particular, co-founder and CEO Dana Guernsey told Latitude Media this spring.
Google is the first hyperscaler to commit to purchasing distributed flexible capacity for its data centers. The tech giant inked a deal with Voltus to add 100 MW of flexible capacity to its capacity stack in PJM.
For more on Voltus’ approach to VPPs, listen to CEO Dana Guernsey on the Catalyst podcast:
Now Sunrun will provide capacity to Voltus in regions of Illinois covered by both PJM and MISO. It’s a multi-year agreement that commits “many megawatts of capacity” to Voltus’ BYOC programs, Sunrun’s SVP of public policy, Amy Heart, told Latitude Media. That capacity will come from thousands of existing solar and storage systems. By laddering up into Voltus’ existing BYOC product, Sunrun can get electrons to market more quickly, she added.
As load growth surges, the deal is designed to meet “critical short-term energy needs” while laying the groundwork for more long-term solutions, Heart said. Ultimately, wholesale market rules need to be updated “to allow and accurately credit injections of residential solar-plus-batteries to maximize the full capacity value.”
Voltus and Sunrun’s agreement itself is evidence of a paradigm shift for virtual power plants, and a demonstration of one way to deploy distributed energy resources that already exist — fast enough to meet hyperscalers’ speed-to-power needs.
Sunrun, for its part, now uses the phrase “home-to-grid power plants” to describe its aggregated offerings. It’s a term that more accurately describes what the company does than the industry standard “virtual power plant,” Heart explained: Sunrun aims to “aggregate distributed generation and storage resources and then provide the grid with new electrons like a traditional power plant, for utilities and now the wholesale market to rely on.”
The term ‘virtual,’ she added, makes the product feel “futuristic or not tangible.” (Debate over what qualifies as a VPP, as well as whether the term is useful for policy and market design, has persisted in the industry for years.)
That’s partly the point of the Voltus agreement and Sunrun’s separate partnership with Tesla and Renew Home. Earlier this year the trio said they had a combined 16-plus GW of existing distributed capacity that data centers could tap into, and hoped to raise awareness about its availability.
Sunrun is also taking another approach to the data center energy bottleneck, via an edge computing pilot to install Nvidia chips in homes with Sunrun’s solar and storage systems.
