SDG&E Tests 'Virtual Power Plant' in Shelter Valley as Heat Wave Strains Grid

San Diego Gas & Electric announced Monday that it is piloting a "virtual power plant" in the East County community of Shelter Valley, as a heat wave arrives and puts pressure on the regional power grid.

The system is designed to lower electricity demand and return power to the grid when it is needed most. It relies on customer-owned equipment, including smart thermostats, rooftop solar panels, energy storage and other connected devices such as water pumps. Software links these small, scattered resources so they can work together. In the utility's words, the technology aggregates and coordinates "a collection of small-scale, decentralized resources located at customers' homes and businesses to meet grid needs."

SDG&E Chief Commercial Officer Miguel Romero said the approach draws on equipment that already exists. "The beauty of a virtual power plant is it can leverage existing resources to provide significant grid reliability benefits — with zero incremental emissions," he said. Romero added that when hundreds or thousands of homes or businesses are connected and their resources are managed flexibly to charge or discharge electricity, they can help "keep the lights on during hot summer days."

The software operates alongside grid operations and sends signals to devices in the network. Depending on the need, those devices either reduce their power use or release stored electricity back to the grid. SDG&E said it called on its pilot virtual power plant three times this month during periods of peak demand.

The utility says its pilot stands apart from other virtual power plant efforts because of the wide variety of equipment involved. According to a company statement, it includes multiple brands and types of devices, among them smart thermostats, well water controllers and battery energy storage systems.

Participants include single-family homes that already have rooftop solar, as well as the Shelter Valley Community Center, which functions as a resource center for residents during emergencies. The center received two batteries, installed on site at no cost.

Steve Bassett, president of the center's board, said the batteries could help during an outage. "We can use this equipment to maintain a place for people if the power goes off and keep the center cool and hope we can provide food if needed for our community residents," he said.

SDG&E said participants are notified when their devices may be turned off or asked to discharge electricity to support the grid, and they can opt out for specific devices. So far, the utility said, few have chosen to do so.

The pilot began operating last December and is scheduled to continue through December 2023.