North American virtual power plants grow 13.7 %
VPPs added 4.5 GW of capacity in 2024, with residential participation rising despite regulatory challenges, says Wood Mackenzie report.
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North America: North America’s virtual power plant (VPP) market reached a total operational capacity of 37.5 GW in 2024, marking a 13.7 % year-on-year increase, according to new data from Wood Mackenzie.
The consultancy’s 2025 North American virtual power plant market report highlights that VPP capacity grew from 33 GW in 2023 to 37.5 GW in 2024. At the same time, the number of active deployments rose sharply, from 1,459 to 1,940 – a 33 % increase. Analysts say the faster rise in the number of deployments compared to overall capacity reflects a market that has broadened rather than deepened.
“Utility programme caps, capacity accreditation reforms, and market barriers have prevented capacity from growing as fast as market activity,” said Ben Hertz-Shargel, global head of grid edge at Wood Mackenzie.
The report notes that the share of VPP capacity from residential customers increased from 8.8 % in 2023 to 10.2 % in 2024. This indicates that despite regulatory barriers to small-scale power generation, interest among households is rising.
Hertz-Shargel added that while data centres are a major driver of new load, “there is an enormous opportunity to tap VPPs as the new source of grid flexibility.”
Looking ahead, Wood Mackenzie points to regulatory pushback as a key obstacle, with utilities’ rate basing practices seen as limiting investment in distributed energy resources.
Source: Energy Storage News
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