VPP Week-In-Review — Week of May 10, 2026
Your weekly brief on virtual power plants in the US & Canada.
Three Takeaways
A coal plant scheduled to retire in 2023 just got a 12-year lease on life to serve Amazon and Google with a contract estimated at $164,250/MW-year. This deal displaced the use of bring-your-own-distributed-capacity to enable demand flexibility.
Con Edison’s RFI for 125 to 750 MW of flexible capacity in New York City is the most direct VPP procurement opportunity to emerge in the Northeast this year.
Every demand forecast in this week’s news — NEMA’s 55% growth, NYISO’s summer shortfall, Fluence’s 12 GWh hyperscaler pipeline — points to the same constraint: the grid can’t interconnect new capacity fast enough. Gridcare’s $64M raise is a direct bet on solving that problem, and the company is explicitly framing VPPs as a core piece of the answer.
News Roundup
Regulatory & FERC · 🔴
PJM may be ‘too big to function’: FERC Chairman Swett 📅 Published: May 13, 2026
FERC Chairman Swett’s declaration that PJM’s governance is “completely eroded” carries more weight than political rhetoric because she is the regulator with compulsory tariff jurisdiction — not a legislator waiting on Congress. That said, the July 23 conference is more likely to produce a NOPR and extended comment period than structural action; PJM’s 13-state stakeholder complexity makes rapid redesign nearly impossible. Track this alongside the Order 2222 compliance thread — they’re the same governance problem approached from different directions.
Utility RFP & Procurement · 🟢
Con Edison to spend $29B shoring up NYC area grid as electrification rises 📅 Published: May 12, 2026
CECONY issued a request for information for “feasible, effective, timely and cost-effective” options to meet a 125 MW capacity gap by 2032, growing to 750 MW by 2036, driven by retiring generators and rising EV and building electrification load in New York City. NYISO has separately projected a potential -1,679 MW reliability shortfall in an extended heat wave scenario this summer. This RFI is a direct procurement opening for VPP aggregators and DER operators in the CECONY service territory.
Grid Reliability · 🔴
Amazon and Google are paying a premium for coal capacity in Indiana 📅 Published: May 11, 2026
NIPSCO’s GenCo subsidiary locked in 500 MW of Hallador’s Merom coal plant via a 12-year, $1B contract at $450/MW-day or $164,250/MW-year — more than four times recent MISO capacity prices — to serve Amazon and Google data center load in Indiana. The deal includes 342 MW of BESS in a shared pool, but the structural signal is clear: utilities are solving data center reliability through centralized, long-duration supply contracts, not distributed flexibility. Third-party VPP aggregators are not in the room for this procurement model.
Research & Reports · 🟢
What ‘zombie’ power plants miss about the grid’s real problem 📅 Published: May 12, 2026
Jason Kraus of Accruent argues in a Latitude Media op-ed that the U.S. grid operates at approximately 50% utilization, and the Brattle Group pegs the economic value of closing that gap at $110–170B over a decade. Reviving fossil plants adds supply but leaves the utilization gap intact. The piece provides analyst-grade framing for the VPP value proposition in any procurement or regulatory proceeding.
Partnerships · 🟢
Fluence Energy signs master supply agreements with two ‘major’ hyperscalers 📅 Published: May 12, 2026
Fluence announced master supply agreements with two unnamed hyperscalers on its May 7 earnings call, pushing its data center BESS pipeline to roughly 12 GWh and total backlog to a record $5.6B. The company flagged that AI workloads cause power swings of up to 50% within minutes — a dynamic NERC’s Level 3 alert this month named as a bulk system reliability threat. Hyperscaler BESS demand is hardening into a distinct market segment, with grid quality-of-power specs that increasingly mirror demand response technical requirements.
Project Finance · 🟢
Gridcare raises an oversubscribed $64M Series A 📅 Published: May 14, 2026
Gridcare closed an oversubscribed $64M Series A led by Sutter Hill Ventures, with National Grid Partners, Future Energy Ventures, and John Doerr participating. The company’s AI platform claims to cut interconnection timelines from years to months by surfacing latent grid capacity — and its pitch explicitly frames VPPs as a key flexibility mechanism. With 2+ GW of AI compute load engaged across 12+ markets, Gridcare is positioning itself at the intersection of data center interconnection and distributed flexibility.
Research & Reports · 🟡
US annual electricity consumption to grow 55% by 2050: NEMA 📅 Published: May 13, 2026
NEMA projects U.S. net electricity consumption will grow from 3,936 TWh in 2024 to 6,130 TWh by 2050, with the steepest growth front-loaded into the current decade. Data center energy demand is forecast up 300% in 10 years; EV demand up 2,000% through 2050. For VPP practitioners, this is the macro demand environment underpinning every program expansion conversation happening simultaneously across this week’s news.
📊 By the Numbers
$164,250/MW-year — Hallador’s Merom coal capacity price with NIPSCO GenCo; more than 4x recent MISO market prices
$5.6B — Fluence Energy’s record total order backlog as of Q2 FY2026
-1,679 MW — NYISO projected reliability shortfall under an extended 3-day heat wave scenario in New York City this summer
$110–170B — Brattle Group estimate of economic value from closing the U.S. grid’s utilization gap over a decade
50% — Power swing range AI workloads can cause within minutes, per Fluence’s investor data
🗓️ On the Radar
July 23, 2026 — FERC convenes PJM governance reform conference; structural redesign of the largest U.S. grid market openly on the agenda
💬 My Take
The central tension running through stories this week: to what extent can Bring-Your-Own-Distributed-Capacity (BYODC) and onsite data center flexibility meet the scale, geographic constraints and timelines of data center buildout? The narrative of BYODC is compelling: a data center can be interconnected faster by unlocking DERs to enable flexibility in load pockets where it is most needed. VPPs are also faster to build than traditional power plants. The gap in this story is that individual aggregators don’t have the scale to meet a significant amount of the data centers’ need for incremental capacity, within the geographic and temporal constraints required.
The way I think about quantifying the answer to this question is what amount of capacity from VPPs will be under a BYODC contract by 2029? I see a low scenario of ~2 GW if aggregators continue with the current pace of collaboration and consolidation to support data centers. The high end could be 10 GW if aggregators can partner and collaborate to aggregate massive, new, geographically-constrained VPPs. This assumes that 10-20% of the 759 GW of data center capacity hits significant project milestones. For a sense of scale, Voltus was listed as the largest aggregator in the US in September 2025 with 7.5 GW under management. If VPPs can get this right, we can help drive the $110-170 billion Brattle estimates in economic value from higher utilization of the electric grid.
On the one hand ConEd’s RFI for 125 MW by 2032 and GridCare’s investment round point to a vision of load flexibility enabling dramatic electricity growth both with existing DERs and the increasing flexibility data centers can enable. ConEd’s RFI is not directly tied to data center load growth, but new buildings requesting 20-25% more power than comparable buildings and EV chargers for residential EVs, buses and medium/heavy-duty trucks. This reaffirms my stance that VPPs have the ability to support broad electrification and stabilize the grid from transient large loads like High-Voltage DC chargers and data centers.
GridCare’s oversubscribed investment round underlines the clear value of insights that can speed up data center interconnection. The insights from their software capability enable data centers and utilities to work together to identify load pockets to speed up finding and interconnecting a site. The software can also help determine what flexibility is needed from a combination of onsite flexible and BYODC. These insights can dramatically speed up collaboration between utilities, data centers and aggregators for expanding their VPP offerings.
On the other hand, Amazon and Google’s contract with NIPSCO’s GenCo subsidiary locked in 500 MW of Hallador’s Merom coal plant and 342 MW of front-of-the-meter (FTM) batteries on the MISO side of Indiana. This is in spite of both companies’ goals on clean energy that would lead these companies to prefer clean alternatives to coal. Amazon is still procuring 100% renewable energy and Google is still targeting 24/7 clean energy. Where was the BYODC or data center flexibility that could have been enabled at $164,250/MW-year?
Google or Amazon haven’t announced being able to flex load at these sites as part of this deal. My hypothesis is this happened because there wasn’t a mechanism for the companies to be compensated for the flexibility they could provide leading to faster interconnection. On the utility’s side, NiSource (NIPSCO’s parent company) specifically called out new power plants and batteries as an unlock for faster build out with Amazon. And there is strong evidence Google in particular could flex their data center: on the PJM side of Indiana Google has a data center campus that can already be flexed by the local utility for demand response, and beyond this specific site Google announced 1 GW of data center demand flexibility in March. They also have developed new API tiers that result in having jobs that can be shifted. This points to having the capability but not the incentive for flexibility initially.
What about BYODC? MISO does have enough VPP capacity additions annually that could support this, but the industry doesn’t yet have the capability to bring on 100s of MWs of incremental VPPs in Indiana. MISO cleared 9 GW of DR capacity in its 2025 auction and added between 400 and 900 MW in each of the last two years. However, no BYODC capacity contract has been announced tied to specific projects in North America yet. Today there are partnership announcements of Voltus’s partnerships with Cloverleaf Infrastructure and Octopus and there are utility tariffs proposed and implemented across a number of states. I forecast these partnerships and utility tariffs will lead to signed deals by the end of 2026 or early 2027.
Companies like GridCare, forward looking utilities like ConEd and partnerships between VPP providers will be able to provide more scale than the limited capacity of legacy plants. I also see acquisitions like NRG’s acquisition of CPower and Piclo’s recent growth enabling aggregators to work together to get to the necessary scale and speed within specific geographies. If this trend picks up over the next year I forecast 2-10 GW in BYODC portfolios by 2029 because of scale unlocked by the industry collaborating on this massive opportunity.
What Did I Miss — or Get Wrong?
Spot a story that should have been in this week’s issue? Disagree with the way I’m interpreting the facts? Just comment in notes with a link to the story or your take.
Opinions are my own and not the views of my employer. Research and drafting for this issue was produced with the assistance of Claude AI. All editorial decisions are mine.