Google has signed a three-year agreement with distributed energy platform Voltus to develop a 100-megawatt virtual power plant across the PJM Interconnection region, an agreement that enables access to grid capacity without waiting for new power plants or transmission infrastructure.
Virtual power plant (VPP) technology uses software to coordinate distributed energy resources such as batteries and demand-response programs. VPPs enable utilities and grid operators to unlock additional capacity from the existing grid and potentially reduce the need for new power generation.
Virtual power plants are not new technology, but Google’s use of a VPP as a strategy to support AI data center growth is a forward-looking use of the concept.
Under the agreement, Google will fund the aggregation of these resources through a “Bring Your Own Capacity” (BYOC) framework. Voltus will coordinate the assets and compensate participating homes and businesses that provide flexibility during periods of peak electricity demand.
PJM Interconnection
The PJM Interconnection is the largest grid operator in the US, coordinating power flow across 13 states, including Virginia, home to the world’s largest concentration of data centers. Rapid growth in electricity demand has strained capacity, making it challenging for new facilities to secure power.
Rather than financing new power facilities, the Google-Voltus agreement seeks to make greater use of the region’s existing resources. By coordinating thousands of these resources through software, the combined network can provide capacity comparable to a conventional power plant. The approach can create additional grid capacity while reducing the need for expensive infrastructure upgrades designed mostly to serve short periods of peak demand.
The agreement represents the first large-scale commercial deployment of Voltus’ BYOC model and is touted by both companies as a new procurement strategy for large energy users. Unlike traditional power purchase agreements, which secure electricity generation, the BYOC framework focuses on obtaining accredited capacity that can support grid reliability during peak conditions.
Businesses and Homeowners Receive Payments
There is growing interest in distributed energy resources as a tool for handling the impact of data center growth on electricity systems. Energy experts have promoted virtual power plants as a way to reduce costs and improve grid efficiency. Studies cited by Google and Voltus suggest that broader adoption of grid-flexibility programs could generate more than $100 billion in savings for US consumers over the next decade.
The companies claim the arrangement will channel investment directly to participating customers. Businesses and homeowners enrolled in the program will receive payments in exchange for allowing their batteries or energy consumption patterns to be adjusted during designated periods.
Although 100MW is relatively small compared with the power requirements of a hyperscale data centers, the project is considered an important test case. The model could provide a template for future data centers seeking faster access to electricity while reducing pressure on overstretched power systems.
VPP is just one of many alternative strategies that tech giants are pursuing to secure power for AI expansion. Google has recently backed large-scale solar and energy storage projects, while Microsoft, Amazon and Meta continue explore a mix of renewable generation and grid upgrades.
