As the need to enhance grid performance coincides with the impacts of growing energy demand, severe weather events, electrification and sustainability initiatives, Virtual Power Plants (VPPs) have emerged as a promising solution for utilities. By aggregating distributed energy resources (DERs), VPPs can help balance supply and demand, improve grid reliability and create new opportunities to optimize operations. The integration of smart technologies that provide visibility and control from the grid edge to the substation enable utilities to deploy VPPs to address these challenges, ultimately strengthening the safety, reliability and resilience of the electric grid.  

Key Considerations for Successful VPP Adoption 

To realize the full potential of VPPs, utilities must consider several key factors that influence implementation and long-term impact: 

Maximizing Aging Infrastructure 

Nearly 70 percent of transmission lines in the U.S. are over 25 years old. These existing systems, designed for centralized energy models, are ill equipped to accommodate the bidirectional power flows introduced by DER integration, creating bottlenecks that hinder DER scalability. Additionally, legacy systems struggle to maintain grid reliability, as they were not built to handle the flexibility and real-time coordination VPPs enable for DERs. However, advanced solutions are breathing new life into aging infrastructure, enabling utilities to extend its life span strategically and cost-effectively while preparing for the demands of a more distributed grid.   

Accelerating DER Adoption 

While DER adoption is still in its early stages, it plays an instrumental role in unlocking the full potential of VPPs. According to the DOE, 30GW of VPP exist today, mostly in the form of traditional demand response. By collaborating with regulators and key stakeholders to address common barriers such as high upfront costs, limited financing options, split incentives between property owners and tenants and lack of awareness about available programs, utilities can help expand access to these technologies. Increasing DER adoption will be crucial for scaling VPP programs and enabling a decentralized, intelligent grid.  

Seizing the Opportunity in Dynamic Management 

From integrating DERs to maintaining grid stability, utilities must take a strategic approach to managing an increasingly decentralized grid. Effective VPP deployment requires dynamic management of grid assets, which means real-time visibility, control and optimization from the grid edge to the substation. Grid Edge Intelligence addresses this need, providing utilities with increased flexibility, addressing time-of-use challenges and reducing reliance on dynamic pricing. By leveraging smart technologies, utilities can strategically manage assets and drive more efficient, resilient grid operations. 

Enter Grid Edge Intelligence 

Traditional grid management methods can no longer keep up with the growing complexity below the substation. To adapt, utilities need smarter, more agile solutions and an integrated approach-like Grid Edge Intelligence. This enables real-time visibility and control over DERs, allowing utilities to optimize energy flows, enhance grid resilience and better manage dynamic pricing. By processing data at the edge, utilities can respond faster to fluctuations in supply and demand, which is an essential capability for deploying VPPs at scale. 

Itron’s solutions take this a step further by quantifying the value of DERs, providing precise calculations on return on investment. A great example of this in action is Itron’s recent collaboration with Xcel Energy in Colorado, where Itron will deploy its Grid Edge Distributed Energy Resource Management System (DERMS). This system enables both aggregated and localized management of DERs, including solar panels, electric vehicle chargers and smart thermostats. By integrating residential battery storage through Xcel’s Renewable Battery Connect program, the Grid Edge DERMS helps Xcel Energy balance peak loads and support reliable service to customers.  

Realizing the Value of VPPs 

Grid edge intelligence empowers utilities to unlock the full potential of VPPs. With real-time visibility, low-voltage optimization and greater control over a decentralized grid, utilities can lead the transition toward a more reliable and resilient energy future. 

Connect with Itron at DISTRIBUTECH 

To discover how Itron’s solutions can help your utility maximize the benefits of DERs and VPPs, stop by booth #3008 at DISTRIBUTECH 2025, taking place from March 24-27 in Dallas, TX.