Are VPPs really a viable solution for easing strain on the grid? Tesla say yes, and they have big plans
Energy Gang
Wood Mackenzie
4.6 • 1.3K Ratings
🗓️ 3 March 2026
⏱️ 61 minutes
🧾️ Download transcript
Summary
VPPs – virtual power plants – continue to spark heated debate. Are they genuinely a fast, affordable way to add capacity to the grid? Or are they an overhyped concept that falls apart when electricity systems are under stress? To find out, host Ed Crooks welcomes Colby Hastings, the senior director for residential energy at Tesla, to unpack what VPPs can and can’t do for the grid.
Colby explains how storage-based VPPs can behave very differently from the classic demand response that relies on consumers changing their behaviour. She sets out Tesla’s thinking on VPPs, including its strategies for customer participation, reliability, and pay-for-performance. Tesla’s model includes opt-outs, backup reserve settings, and transparency via an app. Customer choice is an important principle.
Regular guest Amy Myers Jaffy also joins the show, and she debates what’s holding VPPs back from scaling everywhere. Electricity market design can be critical for determining how fast VPPs are adopted. Other issues, including concerns about “double compensation” under net metering systems, are also important. Some regions are moving faster than others.
Finally, Colby tells us what’s coming next from Tesla and in the industry. Tesla’s vehicle-to-grid plans are starting to take shape. A pilot, starting with the Cybertruck, was launched last month. And she explains why Puerto Rico is one of the clearest case studies for demonstrating the value of VPPs as critical infrastructure.
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Transcript
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| 0:00.0 | The need for additional capacity on the grid and to find creative solutions to deliver additional |
| 0:06.0 | capacity on the grid quickly is just greater than it ever has been. |
| 0:10.3 | How do we get people who are in the mindset, rightly so, that we have to provide reliable |
| 0:16.4 | service, that we can do that by doing something that's a little bit different than what we did |
| 0:21.4 | 10 years ago. We have over 100,000 power walls on the island of Puerto Rico, because that's 10% |
| 0:27.5 | of all homes having a power wall on site. People then are seeing the levels on their batteries running down, |
| 0:34.2 | I'm thinking, well, hang on, if this carries on, then I'm going to be left |
| 0:37.7 | with less storage capacity that I will want to actually keep the power on in my home. |
| 0:45.1 | This episode is brought to you by ACOR, the non-partisan non-profit organization, uniquely |
| 0:50.1 | operating at the intersection of energy affordability, reliability and clean energy deployment. |
| 0:56.0 | ACOR is focused on strengthening the electric grid and driving clean energy investment that delivers |
| 1:00.5 | for the American people. |
| 1:02.2 | ACOR's membership includes industry leaders across the clean energy economy. |
| 1:06.5 | Utility scale clean energy investment has been booming in the US. |
| 1:09.9 | Nearly 80% of it was financed, developed, owned, equipped or contracted by ACOR members. |
| 1:15.5 | Visit www.acore.org to learn more about ACOR's work and upcoming events, |
| 1:20.7 | like the ACOR Finance Forum on May the 12th of the 13th in New York City. |
| 1:25.7 | Wood McKenzie's solar and energy storage summit is back in Denver on the 29th to the 30th of April |
| 1:30.5 | 2026. |
| 1:31.9 | It's co-located with a brand new North American Power and Renewables Forum, featuring senior |
| 1:36.5 | speakers from across the US power sector. |
| 1:39.3 | Join over 450 senior leaders from US power developers, utilities and independent power producers who |
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