Google is leaning in on distributed energy resources to power its data center buildout in PJM, via a 100 megawatt virtual power plant deal with Voltus, the companies announced today.
Voltus announced its “bring your own capacity” program for data centers in September, in partnership with data center infrastructure developer Cloverleaf Infrastructure. BYOC, as Voltus calls the framework, allows data centers to finance the flexibility potential of the communities around them, bringing those megawatts to utilities as part of their capacity stack, rather than flexing their own load.
Hyperscalers in the program commit to financing a VPP program in the region where they need power for a data center, and Voltus delivers that contracted capacity directly to the load-serving entity. Google is the first named BYOC customer, and according to the companies, this is the first instance of a hyperscaler directly funding a VPP.
The BYOC framework, Voltus CEO Dana Guernsey explained to Latitude Media in September, is designed to help data centers bridge the capacity gap between now and the early 2030s. Voltus VPPs, she added, are set to come online in 2027.
In February, Voltus signed a partnership with Octopus Energy U.S., expanding its commercial and industrial demand response portfolio to include aggregations of residential consumer devices in markets including PJM. And while the deal with Google and others in the BYOC program are bilateral negotiations to sell capacity directly to data centers, Voltus is also eyeing doing so in the forthcoming emergency backstop procurement for data centers in PJM, as recommended by the White House and PJM governors in January.
Broadly, the AI boom could prove to be a massive unlock for virtual power plants, as long as providers can figure out how to make VPPs bankable, and via deals that look a lot like traditional PPAs.
On that front Voltus has become the benchmark, said Caroline Golin, Google’s former head of global energy, speaking on the Open Circuit podcast earlier this year. When Google was seeking large-scale flexibility capacity in PJM, Voltus was the only provider in the region up for absorbing the accreditation risk (meaning the financial liability if a grid operator doesn’t credit a resource at its expected value) and able to provide a contract that looked like “every other PPA we’ve ever signed,” Golin said. “Everybody else needed Google to do help with customer acquisition, needed Google to fund demonstratively the way that this would look from an aggregation and from a policy movement space.”
Google’s role
Google, for its part, has been tackling both demand response for data centers and speed to power from a variety of angles.
In March, Google signed its first demand response deal under its so-called “clean transition tariff” — a specialized rate structure that allows customers to pay a premium for carbon free power from advanced energy technologies. Google first debuted the rate structure in a deal with advanced geothermal company Fervo, which filed for IPO at a value of more than $7.7 billion last month.
Google next inked deals with conventional geothermal giant Ormat, and iron-air battery maker Form Energy. Its latest CTT deal, with Michigan utility DTE Energy, will combine solar, storage, and 350 MW of demand response to help power a proposed one-gigawatt data center campus.
The company has also been experimenting with its own demand response tool for compute since 2023, by shifting some compute tasks to other times and locations. But last year, following a demonstration with the Omaha Public Power District, Google said its demand response capabilities would also be used to reduce power use associated with machine learning workloads during times of grid stress, and announced two new DR agreements with Indiana Michigan Power and Tennessee Valley Authority.
