Google Funds Virtual Power Plant to Free Grid Capacity for Data Centers

The electricity will not come from new power plants. Voltus will sign up homes and businesses and give them financial incentives to curb their usage when local power demand is high or the grid is strained. Many of the reductions could occur automatically, for example through smart thermostats that dial back air-conditioning during peak summer hours or batteries that provide temporary on-site power.

Each adjustment frees only a small amount of power on its own. But by aggregating them across thousands of businesses and homes, Voltus says it can reliably provide large amounts of extra capacity when it is most needed, and do so within a few years. Google is paying homes and businesses indirectly through the program, which is designed to reduce electricity consumption during periods of peak demand.

Ellen Zuckerman, head of energy market development for North and South America at Google, said the company sees virtual power plants as a critical short-term solution. “It's a way to invest in our communities, really double down on our clean energy ambition, but also meet capacity at speed and scale,” she said.

The report said technology companies will likely ultimately need to build traditional power plants if they want to keep building large data centers. In the interim, the virtual power plant approach could be a faster, cheaper and less-polluting option, according to the article.