MCE Virtual Power Plant (VPP) FLEX Program: Enhancing Grid Stability through Distributed Energy Resources and Demand Response
Project Update
In 2025, the project team has completed its development action plan and is building its VPP Toolkit designed to support the scaling of the program across MCE’s four-county service area of Marin, Contra Costa, Napa, and Solano. The team has identified a three-pillar structure for VPP scale out that includes: 1) Adaptation of existing MCE programs into the VPP, 2) Integration of existing equipment in the service area into the VPP and the agency’s Distributed Energy Management System (DERMS) by leveraging OpenADR communication protocols, and 3) Deploying new Distributed Energy Resources that can provide load-modification and VPP value at non-residential facilities.
The team has also completed three significant VPP test events to demonstrate control of aggregated DERs via the DERMS and is beginning its work on defining a value creation and VPP forecasting methodology designed to maximize the value of a market integrated aggregation.
The Issue
As electrification grows, the demand for energy and grid capacity increases. During peak hours, energy supply often cannot keep up with demand, causing rising prices and increased emissions as fossil fuel based peaker plants come online to meet energy needs. This issue is magnified by the fact that solar energy is intermittent and typically generated in the middle of the day but demand peaks in the evening. This leads to wasted energy and financial losses. The "duck curve" illustrates a significant renewable energy demand gap between 4-9 pm, when the sun sets ramping down solar generation and fossil fuel plants provide a higher proportion of the power supply. Although energy resource management technologies are maturing, the industry still faces significant hurdles in the seamless, real-time coordination of heterogeneous distributed energy resources (DERs) required to mitigate the steep evening ramp. A critical gap remains in the automated integration of these diverse assets into various revenue pathways, such as the CAISO wholesale market, to optimize their participation and value. Furthermore, there is a lack of mature value-sharing frameworks that can transparently return the resulting market savings and revenues directly to the customers whose flexible loads provide these valuable grid services.
Project Innovation
MCE’s Virtual Power Plant (VPP) FLEX program addresses these issues through the aggregation of distributed energy resources into a Virtual Power Plant operated by MCE, a not-for-profit Community Choice Aggregator (CCA) and Load Serving Entity. The program builds on past pilot efforts in Richmond California, and expands the offering to commercial, industrial, agricultural, public agency, and low-income residential customers throughout MCE's entire service area of Marin, Contra Costa, Solano, and Napa Counties. Unlike standard turnkey VPP models where third-party vendors manage software and market bidding behind proprietary walls, MCE utilizes an on-premise eDERMS and perpetual licensing to maintain direct control over grid resources and data. This approach leverages OpenADR 3.0 to ensure interoperability across diverse devices, avoiding the vendor lock-in common in traditional programs. Finally, a unique value-sharing framework ensures market revenues are returned transparently to low-income participants through performance-based payouts.
Project Goals
Project Benefits
This project reduces energy procurement costs for MCE and participants while targeting 20% cost recovery by year four. By deploying advanced controls for flexible loads, it alleviates grid congestion and strengthens the infrastructure's capacity for integrating renewable energy. These efforts accelerate the transition to clean power, significantly lowering greenhouse gas emissions and improving indoor air quality through electrification. Finally, the initiative prioritizes equity by providing energy resiliency and job creation opportunities for low-income and disadvantaged communities.
Affordability
Reduce energy costs with smarter devices and electrification, reducing MCE’s energy procurement and resource adequacy (RA) costs. Create opportunities for economic development by increasing demand for energy upgrades in the residential, commercial, and industrial sectors. Facilitate workforce development opportunities while modernizing building stock. Reaching at least 20% cost recovery by year 4.
Reliability
Address peak load reductions to alleviate grid congestion and the duck curve, thereby reducing capacity and energy procurement costs for MCE; increase onsite solar self-consumption to reduce exports and related distribution costs; use DERs that align with demand growth and enable bidirectional scheduling to enhance local reliability and the grid's capacity to host renewable, storage, and flexible resources; mitigate risks associated with transmission or
Environmental Sustainability
Accelerate the transition to cleaner energy, reducing emissions and reliance on fossil fuel-based peaker plants and backup gas generators, thereby reducing GHG emissions and grid carbon-intensity; supporting rapid deployment of clean electric transportation with reduced emissions, and promoting removal of natural gas appliances for better indoor air quality.
Economic Development
Offer resources to critical facilities in Disadvantaged Communities (DACs) and Low-Income Communities (LICs) to enhance resiliency and reduce utility costs; drive job creation, facilitate skill development, and create new employment.
Key Project Members
Subrecipients
Match Partners
