How Virtual Power Plants Save Millions in Energy Costs

#EP310

Power grids across America face mounting challenges from extreme weather, aging infrastructure, and rising costs. But a revolution is underway. Jeff St. John, Chief Reporter at Canary Media, reveals how battery storage and microgrids are reshaping energy infrastructure from California to Texas.

In this episode, we explore how state-level policies and utility strategies are shaping the future of clean energy deployment. We dig into Minnesota’s groundbreaking distributed capacity procurement plan, a model that could influence national policy. Jeff explains how utilities are weighing grid buildout versus distributed battery investments, and why solar developers and community advocates are pushing for different approaches.

We also discuss:

• How distributed batteries can reduce grid costs while meeting new demand
• The push and pull between utilities, regulators, and developers
• Why state-level legislation often leads the way for national energy policy
• The risks and opportunities in scaling renewable integration

This episode explores the rapid deployment of distributed energy resources that now comprise 93% of all new grid additions. You'll learn about the economics driving this transformation, policy frameworks accelerating adoption, and why distributed resources are becoming "federal policy proof." 

If you want to understand where the U.S. clean energy transition is headed, especially the role of batteries in reshaping the grid, this conversation is for you.

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Episode Transcript

Jeff St John (00:00):
Right now, I think in the US last year, 93% of all
new additions to the grid weresolar batteries and wind in that
order, and it's going to beabout the same for the next
year, and to be frank, for yearsto come, because the supply of,
you know, turbines for naturalgas power plants is so
constrained that new orders arefacing, like a 357, year

(00:23):
backlog, depending on who youask. And so if what we're going
to add that's new that can comein the next few years is going
to be these three technologies,and primarily solar and
batteries, and

intro (00:35):
are you speeding the energy transition? Here at the
Clean Power Hour, our host TimMontague, bring you the best in
solar, batteries and cleantechnologies every week. Want to
go deeper into decarbonization.
We do too. We're here to helpyou understand and command the
commercial, residential andutility, solar, wind and storage
industries. So let's get to ittogether. We can speed the

(00:56):
energy transition

Tim Montague (01:01):
today on the Clean Power Hour, how do we
incentivize the development ofbattery and micro grid projects
in the United States? My guesttoday is Jeff St John. He is a
journalist. He is the chiefreporter and policy specialist
at Canary media. Welcome to theshow,

Jeff St John (01:17):
Jeff. Thanks. Tim, it's great to be here. Thanks
for having me.

Tim Montague (01:21):
Yeah, I really appreciate all your work and all
the work of Canary media. Ifyou're not aware of Canary
media, just check it out.
Canarymedia.com amazing resourcefor authentic news on the Clean
Energy Transition, writ large.
And today, we're diving into howbattery projects and micro grids

(01:44):
are getting developed in theUnited States. And like so many
things in clean energy, theleaders are California and
California, and you know nowthings are starting to trickle
down a little bit. Texas has aninitiative because of storm
Yuri, there's an interestingproject in here in the Midwest,

(02:06):
in Ann Arbor, Michigan, thatclean coalition was fundamental
in but Jeff, for our listeners,why don't you just set the table
a little bit? What is your beatand what drives your work?

Jeff St John (02:20):
Thanks, Tim, you know, so I've been covering this
stuff for almost 17 years now asa specialty former journalist at
an outfit called green techmedia, and my colleagues and I
formed Canary media, a nonprofitnewsroom to cover the climate
and climate crisis and energytransition when GTM got shut

(02:42):
down, and we've grown a lotsince then, and our goal is to
take the complexity of thingslike, how do we incentivize and
structure policies and economicincentives for things Like
distributed energy, like solarand batteries at, you know, big

(03:03):
industrial sites or inneighborhoods or at community
centers, so that they cansuccessfully grow and expand and
help not just those customers,but everyone writ large across
the grid. We try to take thosecomplex issues and boil them
down in ways that I think peoplecan understand, and that help
people understand the solutionsmindset toward getting these

(03:26):
things done. You know, this isjust solar panels and lithium
ion batteries are trulyrevolutionary technologies, and
we're trying to understand andthen articulate how they can get
out there and put their impactto work to help everybody.

Tim Montague (03:47):
Yeah, and as many of my listeners know, and many
of my guests point out, youknow, globally, 80% of new grid
energy is solar, wind andbatteries. It is the dominant
source of grid power now, andthat's mostly because of the
cost of the technology. Moneymakes the world go around. When

(04:11):
it comes to the builtenvironment, there just is no
arguing with that. We also wantto create a more sustainable
future for humanity, but that'sthat's way down the totem pole
in terms of humanity'sinterests. Truly, unfortunately,
we need to wake up and smell thecoffee, so to speak. But Jeff,

(04:32):
let's go. Let's get into this onbatteries and micro grids. When
you when you think about thislandscape, it's a very dynamic
landscape. It's changing fast.
Solar, you know, has been aroundsince the 90s, right? Really,
that was like the thebeginnings, and then it took off

(04:53):
in the mid 2000s and now we'rein the modern. An era where it's
like gone mainstream. I justnoted that ERCOT grid is 50%
solar, wind and batteries now. Imean, it's amazing how much
solar, wind and batteries is ina market like Texas. You
wouldn't imagine a red stategoing green like that, but it

(05:16):
has happened. And yeah, yeah.
Storm Yuri was like a cherry ontop and a catalyst for a lot of
development of solar, wind andbatteries, but it was already a
major player in wind before Yurihappened, right? So how do you

(05:37):
see this landscape? And thenwe'll talk about some specific
phenomenon, projects andlegislation that is helping to
catalyze this phenomenon?

Jeff St John (05:47):
Yeah, well, as you said, the costs are consistently
lower than the alternative, andthe speed to deploy is also much
faster. I mean, right now, Ithink in the US last year, 93%
of all new additions to the gridwere solar batteries and wind in
that order, and it's going to beabout the same for the next

(06:10):
year, and to be frank, for yearsto come, because the supply of,
you know, turbines for naturalgas power plants is so
constrained that new orders arefacing like a 357, year backlog,
depending on who you ask. And soif what we're going to add
that's new that can come in thenext few years is going to be

(06:30):
these three technologies, andprimarily solar and batteries,
and these are inherently modulartechnologies. You can have as
little or as much as makes sensefrom enormous utility scale
projects like those that youknow, are happening in Texas,
which now has the lead and solarand battery deployments large
scale over California, but alsoat the distributed level. And

(06:52):
that's where they kind of, youknow, circle back to the whole
idea of a micro grid. And amicro grid, you got to define
what you mean by that word? Imean, there have been big, you
know, like college campuses andcorporate campuses that have
been micro grids for decades.
They run on, you know, big, youknow, steam boilers, or they
have turbines, and they run onfossil fuels, and they pull that

(07:14):
waste heat to, you know, supplyheat to the buildings and stuff
like that. And they can stand upduring a storm when the grid
goes out, but solar andbatteries allow you to really
modularize and atomize theconcept of a micro grid to the
individual home or buildinglevel. Theoretically, there are
some limits on how long you canrun a house or a building on

(07:38):
battery and solar alone, right,which is where you might have
some backup generation and stufflike that. But, you know, it's
becoming a possibility, andthat's making it a solution set
not just for homes andbusinesses or organizations that
want to have both lower costpower and some resiliency
against blackouts. It's alsobecoming a tool for utilities

(08:01):
and regulators who are lookingat the enormous costs and the
time spans it takes to build outtraditional infrastructure like
power plants and transmissionlines, and saying, Well, maybe
we can fill in with solar andbatteries in a lot of these
places in ways that are nottraditional, but which might
really make sense from a costand a, you know, resiliency

(08:23):
against climate change drivenextreme weather perspective.

Tim Montague (08:28):
I mean, historically, one of the major
drivers has been the RPCs or theor the RPS, the the renewable
portfolio standard, RPS, excuseme, and, and, but some states,
you know, are outliers in thatregard, Florida and Texas don't
have strong rpss, and there'slots of solar and batteries

(08:51):
happening in those states fordifferent reasons. And then, and

Jeff St John (08:58):
fast. Sorry, it's cheap and it's fast,

Tim Montague (09:01):
yeah, it's cheap and it's fast, but, but So
there, there is a bit of a layercake politically, okay, you've
got RPS driven phenomena. Youknow, here in Illinois we have
sija and fija and now sijaclimate and equitable JOBS Act,

(09:22):
which ostensibly is to achievethe RPS goals. I mean, it's both
in the both and the the RPS isbaked into fija, sorry, sija,
the climate and equitable JOBSAct. And you know, we're on this
path to 50% clean grid by 2040,something like that. Anyway,

(09:45):
that's that's great. But when itcomes to batteries and micro
grids, you know you needadditional incentives. You know
less and less as the technologygets cheaper and cheaper.
Cheaper. But what is going on?
You know, in the places whereyou see large battery and micro
grid deployments, and I'minterested in both macro grids,

(10:10):
like you mentioned, campuses, Icall these community scale micro
grids, which doesn't have a harddefinition, but it's a micro
grid that can power hundreds ofbuildings, 1000s of homes. And
you know, I'll reference cleancoalitions work there in
California and in Ann ArborMichigan, here in the Midwest.

(10:30):
But what else? What else arepucs, for example, public
utility commissions and otherentities doing to incentivize
the development ofinfrastructure that ultimately
allows for value plusresilience,

Jeff St John (10:51):
right? Well, there are a couple of good examples.
One of them is actually inIllinois, where there's this
project called the Bronzevillemicro grid, kind of on the South
Chicago area, where you've got abunch of different buildings,
including a university campusand a large affordable housing

(11:11):
complex that for the past fiveyears, utility comed and a bunch
of different partners have beenusing some Department of Energy
grants to put together solarbatteries, gas generators, and
all the grid technology that youneed to get all those systems to
work together to provide on sitepower when the grid goes down

(11:32):
across different distributioncircuits, right? Because, you
know, powering your house is onething you can kind of like,
throw a transfer switch andyou're off the grid, and you
know, you're just powering yourhouse, and maybe your battery
can or can't kick on your ACcompressor or not. But you know,
you're not, like, sending poweracross circuits that were
designed to take it one way, andnow you're going a bunch of

(11:53):
different ways. In Bronzeville,it's taken a long time. I mean,
they got that launched in, Ithink, 2018 ish, and they just
officially, kind of like, turnedit on, I think, last year and
this year it ran a series oftests that say it's ready to go.
But that work is reallyimportant, because you got to
get all those grid controls and,you know, protection equipment

(12:14):
and the kind of brains of theinverter based resources that
got to work, you know, insynchrony with synchronicity
with the spinning generatorsthat make all this alternating
current grid work, and that's areally important set of
foundational efforts it takesfive years the first time.
Hopefully it won't take fiveyears the next time, hopefully

(12:34):
everyone can learn from that,right? And you know the learn
the lessons that you know cometand DOE and all its partners
have learned can can propagateout. So that's one example of
where utilities are making ithappen. That's with DOE grants,
as for how to make it pay foritself. Utilities make money by

(12:56):
spending money regulatedutilities get a regulated rate
of return on what they have tospend, on what their regulators
say they can spend on theirpower grids, and if they operate
power plants, on their powerplants. And so utilities like to
spend money, because they makemore money the more they spend.
But right now, utility rates aregoing up. They're going up

(13:16):
primarily because, you know,deferred maintenance and build
out of the distribution grid,plus the costs of dealing with
extreme weather, the storms, thewildfires in California, the
hurricane damages, are reallydriving up those grid costs, and
so utilities are under pressurefrom regulators, or at least
they should be, to reduce thosegrid costs. And there can be

(13:37):
ways in which thesetechnologies, solar, batteries
on site, generators, you know,Power Systems controls can be
cheaper than the alternatives.
I'll give you an example fromCalifornia. There's some
projects that are being done byPacific Gas and Electric in
Southern California, Edison, twoutilities, where they're
basically taking remotecustomers, people at the end of
Long, long distribution lines,and saying it costs us more to

(14:00):
keep that line up and runningand safe against wildfires than
it was than it costs us to goput solar and batteries and a
generator at your place and justrun it as a utility asset.
That's a micro grid that'sutility owned and operated, and
it's cheaper than thealternative and utilities have
to serve everyone. They justcan't cut off that line. You

(14:22):
know, there's another examplelike that in North Carolina,
where Duke Energy is working onhas built a micro grid in a
fairly remote town that has,once again, one of these really
long distribution lines. Thatmicro grid after a couple
hiccups, getting it up andrunning after the enormous
hurricanes there last year didpower that town. So there are

(14:43):
ways in which this can be costeffective. Now. There are also a
lot of third party companies anddevelopers that would like to
kind of build it and run itthemselves, and there's a very
interesting conversation to behad about which part. Of the
micro grid landscape are moreappropriately built by
utilities, and their costs arekind of shared across their

(15:06):
customer base, versus which onesshould be done as kind of a
customer centric thing wherethey're taking the load off of
the utility, but there are a lotof different models to get it
done.

Tim Montague (15:18):
Yeah, I just hosted a conversation with AJ
Perkins, the microgrid mentor,and he's working in Hawaii and
in California on projects wherethird party ownership of virtual
batteries, so lots ofresidential scale batteries.

(15:40):
These are in the 20 to 40 kWh,so they're large residential
batteries, but there's many ofthem. One project is a mobile
home park in California, and oneproject is a native Hawaiian
community. I'm not sure on whatIsland. I couldn't pronounce the
name, but anyway, and it's kindof a win win, because here

(16:08):
you're getting this relativelyexpensive capex. Batteries are
not cheap, right? So gettingthat equipment into the
infrastructure, but thenallowing the utility to operate
that as a VPP, as a virtualpower plant, really serves the
utility right when it needsinstantaneous power, or if it

(16:30):
needs to shut off a circuit to acommunity. For some reason, it
gives them that flexibility,right, right? And so these, you
know, we're talking like adistributed, 20 megawatt hour
battery. It's a big battery,yeah, now, obviously there's

(16:51):
bigger utility scaleinstallations happening all over
as well. It's a both and, right?
So it's like small, medium andlarge. The medium being these
VPPs of distributed residentialor small commercial projects and
but, but again, California andHawaii have unique circumstances

(17:12):
in that power is very expensiveand getting more expensive, and
they have unusual weatherpatterns that cause these public
safety shutdowns and and AJtells a funny story where jigger
Shaw tipped him off on thisphenomenon that the utilities in

(17:36):
California were about to rollout rolling blackouts and and
this was a economic opportunityfor distributed energy
developers. But anyway, in othermarkets, Jeff the Clean Power
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more. What other forces do wehave in the American political

(18:49):
system to incentivize thedevelopment of micro grids?
Because it really is super goodfor consumers and business
owners when that storm hits, andyou might think you're
protected, right? Asheville,North Carolina, is a great
example. They were a quote,unquote, resilient community,

(19:09):
protected from climate change. Ialmost moved there. Thank God, I
didn't, and then they were justwiped out by that storm that
came inland and dumped hugeamounts of rain on them and
caused massive flooding, whichjust ripped through and
destroyed so muchinfrastructure, roads,
buildings, power grid,hospitals, you name it like it

(19:33):
was a massive natural disaster,and we want to provide this kind
of resiliency across the board,to every community in America,
ultimately, right? No place issafe from from weather,

Jeff St John (19:50):
yeah, well, I think there's, there's this
defense in depth kind ofconcept, when you think about
resiliency, I know that in inAsheville and in. In places like
parts of Louisiana after thehurricanes down there, you had
companies rolling in withbasically solar panels and
batteries on kind of, likeflatbed, kind of like trailers,

(20:11):
and setting those up as kind ofpower stations for people to
charge their phones or do somerelatively low power
applications. But you can, youcan scale those things up. You
know, the other option isrolling a bunch of diesel
generators which need to beconsistently refueled. So where
appropriate, where costappropriate, those kind of
emergency things can can rollin. Of course, those aren't

(20:32):
making money for the people whoput money into them when there
isn't a blackout to deal with.
And you really want to figureout this combination of
technologies that can meet yourneeds for resiliency during grid
events and then earn their keepand reduce costs for the system
and for everyone who pays forthe system when the grid is up

(20:54):
and running, which is like,thankfully still 99% of the time
or More, I forget what the, youknow, the Sadie data is for us,
why? But, yeah, we don't havethe most reliable grade, but we
don't have the least reliablegrade by a long shot. So, you
know, we gotta and thecircumstances are really very
particular. I know that this isone of the challenges for

(21:18):
regulators who want to goinstruct utilities to build more
solar and battery backed microgrids into their kind of plans
for how they build out theirdistribution grid, or how they
figure out how much new powerplant capacity and transmission
lines to connect new powerplants are going to need to meet

(21:40):
their climate or, you know,reliability goals, but the work
and really propagating the workthat has been done on this is
really important. Like I saidthat that project in Illinois,
the Bronzeville micro grid, tooka long time, but you build on
that if you can replicate thatwork more quickly if regulators
are getting together withsubject matter experts and

(22:04):
utilities that have done thiswork to instruct other utilities
on how they don't have toreinvent the wheel every time
they say, how are we going tomake a complex micro grid that
crosses a couple of circuits?
That's going to be reallyhelpful. And then, you know,
there are certain things you cando to prime the pump. Texas has

(22:24):
$1.8 billion in funding thatcame out of a series of bills
that were a response to winterstorm URI, most of which were
aimed at kind of bolsteringfossil fuel generation, which
has had mixed success right now,since it's so hard to get new
turbines to build gas powerplants that the Texas
legislature wants to build, but1.8 billion in micro grids is

(22:47):
for natural gas generators, butalso at least some mix of solar
and batteries for like sites,like industrial sites, not
places that necessarily alreadyhave backup generators, like
wastewater treatment plants orhospitals. But it could be for
them, but it could also be forplaces that really serve a
public good when the grid goesout, like heb grocery stores

(23:09):
across you know, the Houstonarea were up and running during
the big hurricane there, andafter 2023 and customers, or
people who lived in Houston,were figuring out where the
outages were by checking to seewhich, you know, which
whataburgers Were still servingfood, you know, you've got a lot
of, you know, kind of thecustomers of the utility can

(23:31):
play an active role in this. Thequestion is, how to compensate
them properly. And you can getinto real complex questions of,
how much does it cost comparedto what what are? How do we
measure the value of reliabilityand stuff like that? But just
the raw numbers are lookingpretty good. There was a report
that came out this week actuallyabout California's biggest home

(23:55):
solar battery virtual powerplant program. It's called dsgs.
It's been in place for threeyears. It's gotten to about 700
megawatts of nameplate capacity.
That's 700 megawatts of batteryit can inject into the grid for
a couple hours during the timewhen California is, you know,
demand is outstripping supply,like in as the sun's going down

(24:15):
and it's still hot andeveryone's ACs are jamming and
and it once prices hit a certainpeak on the on the energy
market, you dispatch thosebatteries. And Brattle found
that the benefit that comes fromeveryone in California, from
having that resource there tokeep energy prices down and to
avoid the need to build moreexpensive or keep running more

(24:38):
expensive peak or gas powerplants, the cost benefit ratio
is a two to one ratio you'remaking. You're saving two bucks
for every buck you spend, kindof incentivizing those people
who already have solar andbatteries in their home to just
let the grid use them. So thenumbers are looking good, and
people are saving the grid.
Puerto Rico's had their, youknow, distributed solar. Battery

(25:00):
resources, saving saving thegrid from rolling blackouts over
and over this summer. I mean,these resources are proving
themselves in that purpose. Andif you think about it, would you
rather have a micro grid forwhen the grid goes down, or
would you rather have your microgrid help keep the grid from

(25:20):
going down in the first place.
It's kind of like, you know, yougot to think of it both ways,
right?

Tim Montague (25:25):
Yeah, and that, I guess that's like another layer
of value that these VPPsprovide. If, if the battery does
function as a VPP, you know, itdoesn't have to, right? You can,
I think some states have opt inprograms, right? You can install
solar and batteries and thenparticipate or not in the VPP

(25:47):
program. The VPP program doesserve the collective good and
help keep the grid up or pricesdown. It's a both and, right,
depending on the scenario, yeah,and. And then you can also hit
the red button and go, Hey,okay, hurricanes coming. I'm
sheltering in place. I'm goingto use, I'm going to, you know,

(26:08):
charge my battery and not notlet it service the larger grid
at this moment so that I canhave some resilience when
tomorrow the grid is down. And Iguess, you know that's a
question of then, does the VPPreally provide community scale
resilience in the case of a widespread outage? Probably not. So

(26:32):
you need to do other there needto be other backstops in
addition to VPPs. VPPs are verygood, yeah, but they're not the
sole answer.

Jeff St John (26:43):
Well, yeah, nothing's the sole answer,
right? I mean, during therolling blackouts in California
in 2020 and during winter stormYuri in 2021 this largest point
of failure was natural gas powerplants in the heat they got over
over loaded and had to de ratein California, and in the winter

(27:05):
cold snap in Yuri, they lostaccess to the gas they needed to
run. No system has a silverbullet, right? VPPs are a part
of a portfolio of resources. Ithink it has been an interesting
challenge for utility kind ofgrid operators and kind of

(27:26):
system planners to get theproven points that they require,
and they should require, as youknow, the stewards of our grid
reliability, to know that thesethings are really there. And
that's been a tricky thingbecause, you know, this whole
realm of paying customers to notuse power, you know demand
response, or to inject powerinto the grid. It's a tricky

(27:50):
area, especially when you talkabout not using energy.
Batteries are a little biteasier, because you can actually
meter them and see how muchenergy they're sending back,
rather than kind of guessing howmuch energy you would have used
if you hadn't not used it, andthen try to pay someone for
that, which is a trickier pieceof math to do. It's like
measuring something that didn'thappen, but as the more, as more

(28:11):
proving points, like what hashappened in Puerto Rico or what
happened in New England thissummer, when you know the
estimates are that, you know thedistributed battery and solar
fleet saved, you know, thecustomers served by the New
England grid operator about $20million or what happened in
California when they ran a testearlier this summer and they got
500 odd megawatts of, you know,grid capacity from batteries. It

(28:34):
was measured by theparticipating utilities are
giving, I think everyoneinvolved more, a little bit more
confidence that these things arereal, and you're totally right
that some people are going toopt out for whatever reason, but
bad stuff can happen. And if oneof 1000 or 10 of 1000 or even

(29:00):
100 or even half of 1000 homesolar battery systems opt out.
That might be better than havingone big gas plant that's either
on or off even or being deratedor having to go offline. So the
resiliency and that defense indepth, right? Of having a whole
bunch of distributed kind ofthings, you got to measure it

(29:20):
differently. You gotta kind ofthink of it stochastically
rather than deterministically,right? But that's the reality.
Nothing is perfect on or off,and having that defense in depth
of a whole bunch of stuff that'salready out there being enlisted
seems like a pretty good thingto want to go after and make the
most of.

Tim Montague (29:40):
One of the things that really bugs me on an
ongoing basis is that we have somany authorities having
jurisdiction in the in theUnited States, I don't know what
that number is. It's in the1000s, though, right? And and
just at the state level, right?
We have 50 states. They're allreinventing this wheel, right?
How do we serve our constituentswith a reliable, clean, healthy

(30:03):
grid? And they're doing it in 50different ways, literally,
right? And then within a state,you've got public power versus
private power, like in Illinois,we have IOUs, that service the
major metros, that's cometAmeren and Mid American. But

(30:26):
then we have this whole Swisscheese of rural that is public
power. These are co ops andmunis, and they operate by
totally different rules. Andliterally, you can be a farmer
one block over and being atotally different utility
territory and not be able tobenefit from the community solar

(30:47):
program, which can triple yourincome as a farmer in Illinois.
It's probably

Jeff St John (30:54):
energizing your grid too. It's just that, you
know, there's a jurisdictionalboundary that electrons don't
honor, yep.

Tim Montague (31:01):
So I'm curious, you know, in your work, if have
you run across any think tanksor organizations that are
solving for this and and helpingto raise the bar for everyone,
we're not going to have federalleadership anytime soon on this
matter, clearly, but, but, youknow, and so the state lever, as

(31:24):
I talk about on the show, isvery important. You need to
support your state organizationsand your and your regional
organizations. But who hasfigured this out? As if anyone,

Jeff St John (31:35):
yeah, well, I know that last year there was a
coalition launched, kind of,kind of led by solar United
neighbors, which is thenonprofit group that's basically
a whole bunch of folks who wantto figure out how to pool their
purchasing power in theirneighborhoods to buy solar and
batteries and bring them bringdown the cost and make things

(31:56):
better for solar installers.
They put together a kind of atemplate, kind of VPP state
legislation package, and they'vebeen putting that out over the
last year. I think Virginiapassed VPP legislation based at
least partly on the model ledgethat solar United neighbors and
their partners put together.

(32:17):
There's a piece of legislationin Illinois that did not pass
the regular session. I thinkthey're trying to see if it
would come up in the vetosession.

Tim Montague (32:25):
Oh, yeah, yeah, the omnibus bill, yeah.

Jeff St John (32:29):
And, and so there are these model legislative, you
know, model legislation thatkind of puts what this
particular cohort thinks of asthe ideal, optimal set of kind
of here's how a VPP programshould be structured. Here's
some things that make it harderto actually get off the ground.
Avoid those. Here are somefeatures that we have found are

(32:52):
really successful in places likeMassachusetts. That is a pretty,
you know, robust and growingvirtual power plant structure
called ConnectED solutions. Sothat's one example. I think, you
know, research, I was going tosay, the Department of Energy
had some really importantresearch through the loan

(33:15):
programs, office, liftoff reportseries, looking at the potential
for VPPs. The current Departmentof Energy has taken that report
off the internet, but you canfind it if you Google, DOE, LPO,
lift off VPP Wayback Machine.
Wayback Machine is as a report,and you all can find it.

Tim Montague (33:38):
I was looking for that report today, actually, and
I couldn't find it, so

Jeff St John (33:42):
go check out. I just did a story about that
California Brattle group reportabout VPPs, and I include a link
to the Wayback Machine archivein that story, if you just
scroll down to where that's at,okay? And there are groups like
the clean coalition that areworking on kind of modeling this
stuff, it is very tricky,because we are a federated is a

(34:08):
loose description of how we havea, you could say, balkanized
energy system, state regulated,investor owned utilities,
municipal utilities, electricalco ops, entities that operate
with independence from eachother. In some ways, you can see
that as a problem. You can alsosee it as a opportunity to try

(34:33):
experimentation. I know thereare electrical co ops, like Kit
Carson electrical cooperative inNew Mexico or Holy Cross in
Colorado, they're doing somereally innovative things with
distributed energy, solar,batteries, kind of grid
controls, EV charging managementand that kind of thing. And
municipal utilities andcooperatives do not make money

(34:55):
by spending money like investorowned utilities do, so they have
a bit more. Of a kind of puttheir money where their mouth
is, motivation to use thesekinds of distributed resources
to reduce the cost that theyhave to charge off to their city
residents or their electricalcooperative member owners,

(35:15):
respectively. So that's aninteresting place to look but
those are some examples. I'msure there are many, many others
that I'm not thinking aboutright now.

Tim Montague (35:25):
Well, what else should our listeners know in our
last few minutes together? Jeff,I really appreciate your time,
and this topic is one that youwill see me covering much more
with the obbb of 2025 batteriesand micro grids are all the more
important. The ITC is extendedon batteries and and so if you

(35:51):
have a way to put together avalue stack of earn, safe,
protect, you can make solar andbattery projects pencil quite
nicely still, even without theOB, even without the solar tax
credit, which is going away,it's not going away immediately,
but, but it is phasing out nowon an accelerated schedule. So

(36:14):
what else should our listenersknow from your perspective?

Jeff St John (36:17):
Well, on that point, I think I was just
talking to someone who works ata investment fund that is
backing a bunch of distributedenergy companies, folks that do
like solar on rooftops andbatteries at substations and
stuff like that. And the pointthat this gentleman made, which
I think is important, is there'sa certain sense that these
distributed energy resources arepolicy proof, federal policy

(36:40):
proof, I should say, you cannotweaponize the permitting
authority of the Department ofInterior to prevent a warehouse
or a community college fromputting solar on its roof or
batteries in its Backyard. Youcannot make it impossible to

(37:01):
interconnect a distributed solaror battery asset that you're
building on your own property.
You can make it hard, but youcan always, you can always, you
know, structure it so that itjust serves your load and
doesn't kick back energy back tothe grid. And you can finance
the cost of these energy assetsagainst your retail electricity

(37:21):
rates, which, as we've seen fromdata from groups like power
lines and others, are going upquite quickly, I think twice the
rate of inflation average acrossthe country right now. And if
you think of these distributedenergy resources as a hedge
against rising utility rates youare serving yourself, and if you

(37:43):
think of these resources as ahedge against utility, utility
costs having to build more gridbecause you didn't build that
solar and battery stuff thatrelieves some of that pressure,
you could think of you doingsome service for your customer,

(38:04):
for your neighborhood, you know,for the the people who live next
to you, you can reduce your ownrates in the near term against
rising rates, and you can reducethe need to raise rates by
investing in this stuff andmaking it, making its value
apparent to the utility. Sohopefully that proposition
pencils out in some places it itwill be interesting to see how

(38:28):
state lawmakers and regulatorsand non profit organizations can
do the work that will allow itto pencil out in more and more
places.

Tim Montague (38:40):
Hey guys, are you a residential solar installer
doing light commercial butwanting to scale into large CNI
solar? I'm Tim Montague. I'vedeveloped over 150 megawatts of
commercial solar, and I'vesolved the problem that you're
having you don't know what toolsand technologies you need in
order to successfully close 100KW to megawatt scale projects,

(39:06):
I've developed a commercialsolar accelerator to help
installers exactly like you justgo to cleanpowerhour.com click
on strategy and book a calltoday. It's totally free with no
obligation. Thanks for being alistener, I really appreciate
you listening to the pod, andI'm Tim Montague, let's grow
solar and storage. Go to cleanpower hour and click strategy

(39:29):
today. Thanks so much. Allright, we'll leave it there.
Check out all of our content atcleanpowerhour.com. Please give
us a rating and review on Appleor Spotify. Follow us on
YouTube, reach out to me onLinkedIn. I love hearing from my
listeners, and to that point, ifyou buy wired for sun, my first
book, I'm also writing a secondbook now on batteries and micro

(39:52):
grids, but check out wired forsun. If you buy the book on
Amazon, I'll send you a freePDF. The Kindle is 99 cents, so.
Anyone can afford it. And withthat, how can our listeners find
you Jeff?

Jeff St John (40:04):
Come to www.canarymedia.com, check me
out, Twitter and blue sky. I'mJeff st John, but it's spelled
out, S, A, I n t, because someof the Jeff St John got the
shorter spelling. And pleasecome and support Canary media's
work. We are a non profitorganization. We rely on the

(40:24):
support of our readers and thosewho feel that we're doing a good
job with the money you give us.
So come and support us. Learnfrom us, tell us what we need to
be covering.

Tim Montague (40:34):
Thank you so much.
Jeff st John, Chief reporter andpolicy specialist for Canary
media. I'm Tim Montague. Let'sgrow solar and storage.