The energy landscape is shifting rapidly. With rising electricity demand, aging infrastructure, and the transition to cleaner energy sources, utilities face unprecedented challenges in maintaining a reliable, resilient, and affordable grid. A crucial but often overlooked solution lies in the untapped potential of residential customers as a source of distributed energy resources (DERs).
As homes become more energy-efficient and technologically advanced, they are no longer just energy consumers—they can be energy and capacity providers. Smart thermostats, electric vehicle (EV) chargers, rooftop solar, and home battery storage are revolutionizing how energy flows through our grid. The key to unlocking this potential? Virtual Power Plants (VPPs)—aggregated networks of these residential energy resources that can be coordinated to enhance grid stability.
This four-part blog series will explore how utilities can harness residential capacity to build a more dynamic, resilient, and customer-friendly energy system. We'll cover:
A recent North American Electric Reliability Corporation (NERC) assessment warns that over half of North America could experience energy shortfalls in the next decade. Traditional power plants alone cannot meet rising energy demands. Meanwhile, residential DER capacity is growing exponentially, with projections indicating it could surpass peak demand by 2035 in a decarbonized scenario.
The opportunity for utilities is clear: By engaging residential customers and leveraging DERs through VPPs, utilities can enhance grid reliability, lower operational costs, and accelerate decarbonization goals. However, this transformation hinges on customer participation—ensuring they understand the benefits, trust their utility, and are willing to opt into energy programs.
Utilities must evolve from one-way power providers to orchestrators of a dynamic, omnidirectional grid. This means shifting from centralized generation models to decentralized networks where residential energy resources play a crucial role in maintaining balance and reliability.
The Bottom Line: By embracing residential DERs and creating VPPs, utilities can turn homes into assets that actively contribute to a stable and sustainable energy future. The challenge is not just technological but also strategic—educating, engaging, and enrolling customers to maximize participation.
In the next blog in the series, I’ll dive into the growing need for residential demand-side capacity and how utilities can capitalize on this untapped potential. In the meantime, if you’re interested in learning more about Franklin Energy’s load management capabilities, get in touch!