California left the nation's largest VPP in limbo. What's next? | Factor This Policycast
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The most robust virtual power plant (VPP) program in the United States is running out of funding at a time when the grid needs it more than ever.
Launched in 2022, California's Demand Side Grid Support (DSGS) program coordinates more than 1 gigawatt (GW) of dispatchable capacity from more than 200,000 unique customer sites enrolled across every single legislative district in the state. The program leverages customer-sited resources like home batteries, solar systems, and smart thermostats, bringing clean, flexible, and responsible energy resources online during grid emergencies. Since the DSGS program began, the California Independent System Operator (CAISO) has avoided blackouts and hasn't issued a single Flex Alert, its call for voluntary energy conservation, in more than four years.
Despite its impact, the DSGS program was never intended to be permanent, and California's last legislative session ended without dedicating new funding. While still operational through the end of the year, its fate in 2027 and beyond is uncertain at a critical moment: the nexus of rising electricity demand, more frequent extreme weather, and mounting affordability challenges.
This edition of DTECH's Factor This Policycast, presented in partnership with national business association Advanced Energy United, explores the future of the DSGS program. Hosted by Factor This content director Paul Gerke, the episode features special guests Brandon García, Advanced Energy United's California director, and Lauren Nevitt, senior director of California policy and energy markets at Sunrun.
They react to a new report evaluating how VPPs can lower utility costs and share details of recent record-breaking VPP dispatches. This episode of the Factor This Policycast also addresses critical questions including: Can California's policymakers establish a durable, long-term market pathway to support the nation's leading VPP? What role do distributed energy resources (DERs) play in the state's energy future? And what can California's next Governor do to buoy DSGS before it can't pay its participants?
Energy policy on your mind? Check out all episodes of the Factor This Policycast