CPower’s 2026 Energy Trends Forecast: Virtual Power Plants Go from Advantage to Imperative
As the U.S. grid braces for another year of rapid load growth, the conversation around energy flexibility is shifting from possibility to necessity. Virtual Power Plants (VPPs) and demand response are assuming larger roles, not because they’re trendy, but because the grid can no longer function reliably without them. With energy costs climbing, VPPs are one of the few solutions that deliver immediate, measurable value for both customers and grid operators – no decadelong infrastructure project required.
Several CPower executives shared their take on what lies ahead for VPPs and the energy industry in 2026.
Glenn Bogarde, Chief Sales and Marketing Officer
Affordability becomes the driver of VPP growth.
In 2026, VPPs will be discussed less as a shiny innovation and more as one of the fastest, lowest-risk tools for cushioning customers from rising system costs because they can reduce peak-driven energy purchases and defer or avoid infrastructure spending.
Policymakers and regulators will be pulled toward such solutions that show up quickly on bills, making demand response and VPP-style aggregation politically attractive compared with long-lead generation and infrastructure buildout projects. Programs will be pushed to show measurable, verifiable cost impacts, not just participation numbers, so affordability claims hold up.
“Dispatch fatigue” will rise, making subtle, automated controls more important.
Customer experience will become inseparable from performance as tighter markets drive more dispatch activity. VPP providers will lean on automation and subtle building-control adjustments, like HVAC and lighting setpoints, so customers experience less disruption than with blunt curtailments.
Customers will turn to external experts to effectively manage energy assets in increasingly complex environments.
Recognizing that grid stress is mounting, one of customers’ primary goals will be to deploy solutions that de-risk the energy used in their core operations, protecting against the worsening of the quality or supply of available electricity. So, customers will lean on demand-response aggregators for education, sourcing and support to improve operational resiliency and unlock the value of their on-site energy.
Mathew Sachs, Chief Strategy Officer
Federal “momentum” will keep rising, but it won’t immediately translate into a single national VPP rulebook.
Federal momentum will build in 2026, but the likeliest near-term action is targeted attention on data centers and other large loads, where flexibility solutions increasingly include demand response and VPP-style aggregation. At the same time, major progress on FERC Order 2222 is not expected, keeping the “national framework” conversation more aspirational than operational this year.
Data-center interconnection fights will pull demand flexibility into the “must-have” solution set in many regions.
Expect more proceedings and policy narratives that explicitly connect large-load additions to demand response and VPP-style flexibility, following the direction already emerging in “large load” discussions. The center of gravity will shift from “should we do VPPs?” to “what performance commitments do we need to approve load growth responsibly?” This dynamic will elevate curtailment and flexible load as non-negotiable tools, not optional add-ons, because no serious proposal is showing up without them in systems where peak loads occur for only a very limited number of hours each year.
Private VPPs will emerge as an accelerator of speed-to-power for data centers.
VPPs are among the most powerful near-term levers to unlock latent grid hosting capacity and can be used in combination with onsite flexibility, grid expansion and other tools to keep power plentiful and affordable for data centers. However, there are no known examples of data center-sponsored private VPPs operating today. Key hurdles will be at the forefront of industry conversations in the coming year, including utility appetite and the ability to meet the gigawatt scale of new projects.
Ken Schisler, Chief Legal and Regulatory Officer
States will write the “speed-to-power” playbook for VPPs.
Federal interest in VPPs is real, but the rules that determine what can scale, such as program design, retail incentives, distribution coordination and customer participation pathways, will keep shifting at the state level in 2026. That’s because load growth is becoming an economic-development issue as much as a grid issue, and states can move faster than a national framework. With BloombergNEF now projecting U.S. data-center power demand could reach 106 GW by 2035, state regulators will increasingly treat VPPs as a near-term pressure valve to bridge the gap between demand growth and long-lead infrastructure.
The “seams” between wholesale markets and state utility programs become a bigger story.
In ISO-New England, especially, the interface between ISO programs and state-jurisdictional utility programs can be where value is lost and where 2026 improvements can unlock more reliable participation. Expect more attention on harmonizing rules, avoiding conflicting signals to customers and making programs stack cleanly without double-counting or compliance headaches. It’s not glamorous, but it’s exactly the kind of plumbing fix that enables real scale.
Major markets (especially PJM and ERCOT) will move from pilots to address market mechanics.
ERCOT’s Aggregate Distributed Energy Resource (ADER) pilot project created an on-ramp for aggregated resources. The direction of travel in 2026 will be pressure to translate that into scalable, repeatable participation, especially as Texas grapples with fast load growth and reliability expectations. In PJM, the story is less “demand response is shrinking,” and more “crediting rules are evolving,” with reforms like deliverability windows and ELCC methodology becoming the battleground for how much flexible load counts.
To learn more about VPPs and how CPower can turn your flexible energy into revenue while improving grid reliability and increasing energy resiliency, call us at 844-276-9371 or visit CPowerEnergy.com/contact.
