The Virtual Power Plant (VPP) market grew rapidly in the past year and reached 37.5 GW of the flexible capacity behind the meter, according to a new report from Wood Mackenzie.
The report, “2025 Mark report Noord -Armika Virtual Power Plant Market“Believes that the VPP market was broadened more than deeper, with the number of corporate intensions, unique off -takers and market and utility programs, it applied more than 33%, while the total capacity grew a more modest 13.7%.
“Utility program caps, reforms of capacity accreditation and market barriers have prevented capacity from growing so fast as market activity,” said Ben Hertz-Shargel, worldwide head of the edge for Wood Mackenzie.
Market maturation continues
The share of VPP wholesale market capacity of residential customers increased to 10.2%, from 8.8% in 2024, which is still a reflection of market barriers for small customers. Data access of third parties for registration and market scheme are the primary blockers.
The penetration of battery storage and EV in VPP implementations continues, with 61% as many implementations including these technologies as those, including smart thermostats, the current technology.
Leading markets
California, Texas, New York and Massachusetts are the leading States, which represent 37% of the VPP implementations. In the meantime, PJM and Ercot, the regions with the largest utilities on data center capacity, also have the largest known VPP collection capacity.
“Although data centers are the source of new loads, there is a huge opportunity to tap VPPs as the new source of schedule flexibility,” said Hertz-Shargel.
Offen Growth
The Top 25 VPP -Off -off makers obtained more than 100 MW this year, while more than half of all off -takers increased the number of implementations among them by at least 30% compared to last year, with the width of the market. A business model “independent distributed power manufacturer” has emerged, whose statement is that the income of the energy arbitration and the network of the grid can finance an external storage offer for an electricity store.
Regulatory pushback
A majority of the VPP aggregators and software providers do not support a utility company rate, an important plank of the distributed capacity buying model for utility companies.
“This model is seen as limiting access to private capital and aggregators of the Der-Markt, rather than using customers and resources from third parties,” said Hertz-Shargel. “In the meantime, there is a broad consensus among experienced wholesal market participants that Ferc Order 2222 was a missed opportunity and will not have a significant impact on access to the market.”
News item from Wood Mackenzie
