Google is partnering with the energy technology firm Voltus to establish a virtual power plant in the Mid-Atlantic power grid known as PJM, a move aimed at freeing up electricity to support the company’s expanding network of data centers. Announced Thursday, the agreement will allow Google to access up to 1,070 megawatts of electricity capacity during peak demand periods—an amount comparable to the output of a large nuclear reactor.
Unlike traditional power plants, the energy capacity provided through this initiative will come from aggregated reductions in electricity use by thousands of homes and businesses. Voltus will incentivize participants to reduce consumption during times when the grid is strained, employing automated mechanisms such as smart thermostats adjusting air conditioning or batteries providing temporary on-site power. These distributed adjustments, while modest individually, combine to create a sizable and reliable resource for meeting peak demand.
The PJM grid, which serves 67 million people across 13 states, has experienced significant price increases since 2024 amid a surge in data center construction that has outpaced the development of new power generation facilities. Google’s deal represents one of the largest examples to date of a technology company investing in virtual power plants as a strategic alternative to building new fossil-fuel plants, which can be costly and face lengthy development timelines.
“We really see virtual power plants as a critical short-term solution,” said Ellen Zuckerman, Google’s head of energy market development for the Americas. She described the approach as a way to accelerate capacity while advancing the company’s clean energy ambitions and supporting local communities.
Voltus, based in San Francisco, currently manages about 9,500 megawatts of virtual power plants nationwide, covering the equivalent electricity use of roughly seven million homes. The company first launched a 100-megawatt program with Google in the Mid-Atlantic this June; strong customer interest prompted an expansion to the current scale. Similar programs are also underway in Arizona, California, and Texas, though experts say significant potential remains untapped.
The U.S. Department of Energy has estimated that virtual power plants could triple in capacity by 2030, potentially saving consumers $13 billion annually by reducing the need for new traditional power generation. However, the concept faces challenges, including regulatory barriers that limit market participation and access to electric meter data, as well as skepticism from some utilities and grid operators who question the reliability of demand reductions from distributed sources.
“There’s a hurdle that we still need to get over in terms of operational trust in these resource[s] to deliver,” said Ryan Hledik, an energy consultant with the Brattle Group.
Voltus CEO Dana Guernsey emphasized that the company conducts rigorous testing to ensure promised capacity is available, citing recent successful performance during two grid emergencies in the Mid-Atlantic.
The virtual power plant initiative may also help address growing public concern over the environmental and economic impact of data centers. With energy demands rising, data center projects face increasing resistance from local communities worried about noise, pollution, and strain on electricity and water resources. According to recent analysis, at least 45 major data center developments totaling nearly $68 billion were delayed or canceled in the second quarter of 2024 due to local opposition.
As regional policymakers push for tech companies to invest directly in new power generation to prevent higher costs to households, virtual power plants may offer a complementary strategy to enhance grid capacity in the near term. Whether this approach improves the perception of data centers and eases community tensions remains to be seen.