Google and Voltus Expand PJM Virtual Power Plant to About 1 Gigawatt

Google will pay homes and businesses across the PJM Interconnection grid to cut their electricity use at peak hours, scaling a virtual power plant program with Voltus to roughly 1 gigawatt. The San Francisco-based distributed energy company and Google announced the expanded agreement on Oct. 22, 2026, adding 1,070 megawatts of flexible capacity to a 100-megawatt deal the two companies signed in June. Google described the move as a tenfold expansion of its initial commitment and one of the largest distributed capacity portfolios known to have been funded by a hyperscaler.

How the virtual power plant works

A virtual power plant is a software-coordinated network of distributed resources that behaves like a single power station from the grid operator's point of view. Instead of building a new turbine, an aggregator such as Voltus signs up thousands of sites that agree to lower consumption, discharge batteries or shift industrial processes during the few hours a year when demand peaks. That avoided demand is offered into wholesale markets as capacity.

Google's role is the financier. Under the Bring Your Own Capacity model, a data center operator pays to bring new flexible resources onto the regional grid, and the resulting capacity is counted toward the load it adds. When Google and Voltus first announced the arrangement in June, Latitude Media reported that Voltus expected its virtual power plants to start coming online in 2027. Utility Dive reported on Oct. 22 that Voltus expects the expanded program to ramp to full capacity over three to four years and to operate under the Google contract through 2040.

Canary Media reported that Google is the only data center developer Voltus has publicly partnered with under the model and that Voltus CEO Dana Guernsey said the Google portfolio will rely on carbon-free resources, with no fossil-fueled backup generators. The joint release itself refers to clean capacity.

Industry implications

PJM, which serves about 67 million people across 13 states and the District of Columbia, has become the main test case for how fast data center demand can be absorbed by an existing grid. Capacity prices in the region have risen sharply in recent auctions, new generation has been slowed by a congested interconnection queue, and state regulators and consumer advocates have pressed for large loads to pay for the supply they require. In that setting, capacity that can be enrolled without building a power plant has obvious appeal.

The deal also reframes demand response, long treated as an emergency tool, as a long-term procurement product. Guernsey has compared these contracts to the power purchase agreements that financed utility-scale wind and solar. A multiyear commitment from a creditworthy buyer gives businesses a reason to invest in on-site batteries and controls that they would not fund against a single year of auction revenue. Ellen Zuckerman, Google's head of energy market development for North and South America, said the expansion shows the company's effort to bring its own capacity to the grids that serve it.

For utilities and grid operators, the question is how such portfolios are credited. PJM's capacity market typically procures resources about three years ahead, while the Google contract extends far beyond that horizon. How regulators treat hyperscaler-funded flexibility in reliability planning will shape whether the model can scale beyond a handful of buyers.

Competitive and supply chain implications

Hyperscalers are now competing on access to power as much as on chips. Google's approach complements its contracts for new carbon-free generation and its work on shifting computing loads in time and place. By paying for flexibility on the customer side of the meter, Google gains a resource that can be assembled faster than a new plant and that does not depend on scarce gas turbines, transformers or interconnection slots.

The program also creates demand across the distributed energy supply chain. Behind-the-meter batteries, building controls, smart thermostats and industrial energy management software all become more valuable when a long-term payer stands behind the capacity they provide. Other virtual power plant operators, including residential solar and thermostat aggregators, are pursuing similar arrangements with utilities and large buyers.

Regional implications

The capacity will be recruited from businesses and households inside PJM, a footprint that stretches from Illinois to Virginia and includes Northern Virginia, the world's largest data center cluster, as well as fast-growing sites in Ohio and Pennsylvania. Payments flow to local participants rather than to a single generator, which Google and Voltus present as a direct economic benefit for communities hosting data center growth.

The timing matters for state policy. Several PJM states are debating data center tariffs, large-load interconnection rules and local moratoriums. The Federal Energy Regulatory Commission rejected an earlier PJM proposal that would have required new large loads to supply their own capacity or face curtailment during emergencies, leaving voluntary approaches like this one as the main near-term route for data center owners to add supply.

What comes next

• Voltus enrollment of commercial, industrial and residential sites across PJM to build out the added 1,070 MW.
• First virtual power plant capacity under the Google program, which Voltus has said it expects to start coming online in 2027.
• Regulatory treatment of Bring Your Own Capacity resources in PJM capacity auctions and state large-load proceedings.
• Possible disclosure of which Google data center sites in PJM the portfolio will support.
• Similar agreements from other data center developers seeking faster access to capacity in the region.

Sources

• Google: We are working with Voltus to build a 1-gigawatt virtual power plant
• Voltus and Google joint release (GlobeNewswire)
• Utility Dive: Google supersizes PJM virtual power plant to more than 1 GW
• Canary Media: Google plans big virtual power plant in energy-strapped PJM grid

Image: Google data center in Council Bluffs, Iowa, by Chad Davis via Wikimedia Commons, CC BY 2.0. Cropped and edited by Credence Research.