Virtual power plants (VPPs) are redefining what a “power plant” can look like, turning everyday technologies in homes and businesses into a flexible, cleaner backbone for the grid. Instead of relying only on big, centralized fossil-fuel plants, VPPs coordinate thousands of small, smart devices so they work together to keep the lights on, cut emissions, and support a more resilient, affordable energy system.
This shift from a few massive plants to many connected, intelligent devices is more than just a tech upgrade; it is a fundamental redesign of how energy is produced, managed, and shared. In the sections that follow, here are 10 clear, compelling reasons VPPs are a powerful win for the environment and should be at the heart of any modern clean energy strategy.
VPPs address one of the most carbon‑intensive parts of today’s grid by changing when and how power is consumed and generated. By intelligently orchestrating demand shifts and distributed resources, they turn everyday devices into a coordinated system that favors cleaner generation and avoids the worst fossil‑fuel spikes.
Modeling shows they can materially shrink the power sector’s carbon footprint by shifting demand from high‑emissions periods to times when wind and solar are abundant. In one 2025 Mountain West case study, a VPP‑enabled portfolio cut carbon emissions by 7% compared with a similar system without VPPs and, under a carbon policy scenario, delivered a 47% reduction in emissions alongside significant cost savings.
VPPs help turn wind and solar into dependable workhorses for the grid rather than “use it or lose it” resources. By orchestrating thousands of devices in real time, they create the flexibility needed to match clean generation with demand as it rises and falls and help the grid absorb more renewable generation instead of curtailing it. In the same 2025 Mountain West analysis, adding VPPs enabled 200 megawatts of additional renewables to operate reliably compared with a baseline portfolio.
During peak hours, grids often rely on gas or oil “peaker” plants that are expensive and highly polluting. The U.S. Department of Energy notes that VPPs can reduce reliance on peaker plants by shifting demand and using distributed resources instead, which directly cuts associated emissions.
A peaker plant is a power station that runs only during times of high electricity demand — like hot afternoons or cold mornings — when regular power plants can’t keep up. Most peaker plants use fossil fuels, start up quickly, and produce expensive electricity, but they also emit significant air pollution. These plants are often located near communities that already face higher health and environmental burdens.
Smart software in VPPs predicts demand and optimizes when devices consume or supply power, reducing wasted energy and unnecessary generation. Less waste means fewer fossil fuels burned and lower overall environmental impact from producing and delivering electricity.
As heating, vehicles, and appliances electrify, electricity demand rises.VPPs help manage that growth without building as many new fossil plants, making it easier to replace gasoline cars and gas heaters with electric options powered increasingly by clean energy.
Because VPPs reduce the need to run fossil plants during the dirtiest hours, they contribute to lower local air pollution and better health outcomes, especially in communities located near gas peakers and older plants. Nationwide modeling by RMI’s Power Shift analysis suggests that VPPs could avoid 12 million to 28 million tons of carbon dioxide emissions by 2035—roughly 2% to 4% of projected U.S. power‑sector emissions—on top of associated reductions in harmful co‑pollutants.
Because VPPs aggregate many distributed resources, they can respond quickly to grid stress and enhance grid reliability and resilience during extreme events. This fast, flexible response helps avoid outages and reduces the need for emergency fossil‑fuel backup generation.
Analyses show that VPPs can provide capacity at a fraction of the cost of new gas plants while avoiding additional fossil infrastructure. By meeting peak demand with flexible, distributed assets, they help defer or avoid investments in traditional generation and transmission, lowering long‑term environmental impacts.
Homes, farms, and businesses in a VPP can sell excess clean power and flexibility to the grid, turning passive consumers into active participants in the energy transition. This local participation encourages more rooftop solar, batteries, and efficiency upgrades, multiplying environmental benefits.
VPPs simultaneously advance decarbonization, affordability, health, and equity by cutting emissions and costs while targeting relief from pollution in overburdened communities. They are a practical tool for meeting climate targets while making clean, reliable energy more accessible to everyone.
Virtual power plants are no longer a futuristic idea sitting on the sidelines of energy planning; they are becoming one of the most practical ways to cut emissions, protect communities, and get more value out of the clean technologies people are already installing in their homes and businesses. Taken together, these 10 reasons show that VPPs are not just a niche grid tool, but a core building block of a cleaner, fairer, and more resilient energy system.
As more smart thermostats, EVs, batteries, and connected devices come online, the question is not whether they will shape the grid, but whether they will do so in a way that accelerates or slows progress on climate and equity. VPPs offer a way to harness that growing network of devices so it works for everyone — cutting carbon, easing bills, and strengthening reliability at the same time. Now is the moment for utilities, regulators, and communities to lean in, scale up VPP programs, and make this smarter, cleaner grid the new normal.
Want to learn more? Discover how VPPs use smart home devices to prevent outages, reduce costs, and create a more resilient electricity grid during peak demand.