Google plans big virtual power plant in energy-strapped PJM grid

Google and Voltus announced a plan to create a gigawatt of virtual power plant capacity in PJM Interconnection, the nation’s largest energy market affected by data center growth. The initiative builds on a prior 100 MW agreement, aiming to manage energy use from thousands of homes and businesses via software to free up grid space for data centers. Voltus, a demand-response firm, will coordinate the effort, leveraging its decade-long experience in the sector. The collaboration marks Google as the first data center developer publicly partnering with Voltus on this approach.

Voltus CEO Dana Guernsey stated the initial 100 MW target was always a first step, emphasizing the need for scale to address PJM’s rising peak demand costs. PJM has seen peak demand costs increase more than eightfold in recent years, driven by data centers and other large loads. The grid operator forecasts 30 to 34 GW of new demand by the early 2030s, straining a system that recently peaked at 162 GW. Voltus’s virtual power plants offer a fast alternative to building new traditional power plants, avoiding lengthy construction timelines.

Voltus is securing long-term commitments from customers to reduce energy use or supply battery power through 2040 to meet peak grid needs for Google. This exceeds typical demand-response program durations, which often secure resources only three years ahead. The extended commitments benefit both Google, which can demonstrate stable grid support for its data centers, and customers, who receive contracted revenues to justify investments like battery installations. Voltus’s recent acquisition of battery startup Brightfield AI underscores its focus on energy storage solutions.

Despite the potential, questions remain about whether Google and other data centers can secure enough capacity to offset PJM’s growing strain. PJM’s proposal to require data centers to supply their own capacity was rejected by federal regulators earlier this month. Google has not disclosed a timeline or specific details on how the gigawatt-scale VPP will reduce impacts of existing or planned data centers. The company continues to pursue multiple strategies, including financing carbon-free energy and shifting computing loads, while also supporting fossil-fueled power projects.