How PG&E’s SHARE Virtual Power Plant Turns Homes Into Grid Support

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Hi, I'm back from vacation and once again on the road this week with three speaking engagements in five days.
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Check out my cool hotel room this morning in Denver with the paper airplans on the ceiling.
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And once again, I'm looking at newsworthy stories affecting the grid.
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The one that recently caught my eye was Pacific Gas and Electric's announcement that it was teaming up with Rewiring America, Carrier Global Corporation, Tesla, Sunrun, Renew Home, Demand Side Analytics, NCORD, and Google to develop a quote, first of its kind virtual power plant, VPP, designed to help communities benefit from rising electricity demand while addressing limited transmission capacity and improving affordability and reliability for all customers.
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Unquote.
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Since all these programs get acronyms, this one might as well get one too.
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And it's called the Smart Home Assets for Reliability and Efficiency, henceforth to be referred to as Share.
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PD ⁇ A will collaborate with Tesla, Sunrun, and Renew Home in enrolling approximately 21,000 existing flexible energy devices, mostly batteries, into the program, totaling about 12 megawatts.
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That'll shift peak demand away from high stress periods and free up scarce transmission capacity.
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The resources expected to begin supporting the grid as early as fall 2026, with participants compensated for their contributions.
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Carrier, with its battery-enabled heat pumps, fresh off the shelf, will add these new devices to the VPP, with the batteries shifting energy use to help manage peak demand as well.
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Participants will come from Alameda and Santa Clara counties.
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They must live in single-family homes with central AC, and they're eligible to receive a$5,000 discount with the first 25 households participating receiving twice that.
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Enrollment will start in spring of next year with the equipment monitored and managed for about two years, after which the homeowners keep the equipment and the battery-enabled heat pumps will continue to be part of a VPP.
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Rewileing America will work directly with households to deploy and enroll energy-saving efficient technologies into share and coordinate closely with local installers to ensure quality and performance standards are met.
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NCORD will be responsible for software and modeling, and PG ⁇ E and Demand Side Analytics will coordinate the thousands of distributed resources.
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Initial program findings will be shared in late 2026 and early 2027.
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And I'll bet one of them would be the challenge of coordinating so many different entities.
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High headed up Constellation's demand response program.
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And once we had three or four more players in the pot, things got pretty challenging.
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So this is a pretty big program.
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It's going to cost some money.
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Who's writing the checks for this?
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Well, it turns out Google is.
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They're paying for all the costs, customer incentives, and those heat pump subsidies, which naturally leads one to ask, why?
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What does Google get out of this?
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Specifically since it indicated that this program is not related to any existing or planned data centers in the area.
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Well, Google may not reap the benefits of the capacity freed up in this case, but it may serve as a model for future capacity arbitrage, in which this and other data companies pay for and free up capacity on the grid edge that they can then subsequently claim for their own purposes in enrolling additional data log.
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Google's already doing something like this through a deal announced in June for 100 megawatts of capacity to be freed up by DR aggregator Voltus.
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But 100 megawatts is peanuts compared to the gigawatts of capacity Google needs.
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For example, it's building data centers of 840 megawatts, 700 megawatts, and a couple of 600 megawatt facilities right now across the country.
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The economics, though, are pretty compelling.
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Let's think about them for a minute.
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Crusoe, one company that leases AI data center compute to various buyers, recently indicated in a Stanford University educational series that it can lease 1,000 megawatts, so 1 gigawatt, for about$15 billion a year or$1.25 billion per month.
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Bloomberg New Energy Finance recently estimated a revenue figure of around$1.76 billion per gigawatt per month.
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So it pays for these things to get connected as quickly as possible.
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This number, or these numbers, imply that AI data centers, that crowd lives in an economic stratosphere where they can pay virtually anything to get online sooner than would otherwise be the case.
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They value capacity at orders of magnitude differently than any other players out there.
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An economically rational outcome then would be for Google and others to arbitrage this possibility and develop as much DR capacity as they can on the grid edge in exchange for being able to connect more quickly to a power grid whose peak capacity is already pretty tapped out.
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So we may see more of these programs in the future in which capacity freed up is dedicated to these new data loads.
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Of course, data center operators increasing their own operational flexibility could also reduce stress on the grid and bring more facilities online.
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Although that capability hasn't yet been fully stress tested or demonstrated beyond some meaningful pilots.
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MLDI, a leading player in the space, has cut about 25% of its compute load over three hours in Arizona with Salt River Project, and it has had four other projects around the world demonstrating flexible capabilities.
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They're building a 96 megawatt data center with digital realty and EPRI and others in Virginia as a test case, but none of that's been fully proven out yet.
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So at this point, it's possible that can happen, and it's possible that we can get more DR arbitrage.
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It's not an either or, it's a both.
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But neither capability has been fully proven yet.
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Well, thanks for watching, and we'll see you again soon.