On a spring day in Boston, Governor Maura Healey signed an executive order that would transform how Massachusetts keeps the lights on—not by building massive power plants, but by orchestrating thousands of smaller resources spread across homes, businesses, and factories. The order, issued on March 13, sets an ambitious target: the commonwealth must develop 3.5 gigawatts of demand-management resources by 2035, a portfolio that includes virtual power plants, electric vehicle charging systems, and energy efficiency programs.
Virtual power plants represent a fundamental shift in how grids work. Instead of relying on a single massive coal or natural gas facility to surge power when demand spikes, a VPP functions as a distributed network—batteries in basements, solar systems on rooftops, factories that can dial down their consumption on command. A central controller, with a few clicks, can mobilize hundreds or thousands of these points simultaneously, each compensated for its contribution. It is, quite simply, a cheaper and cleaner alternative to the natural gas peaker plants that have long served as grid backup.
To grasp the scale of Massachusetts' ambition, consider this: the entire New England grid, spanning six states, reached a peak demand of 26.1 gigawatts in 2025. The commonwealth's target represents a significant fraction of that. Even California's largest virtual power plant network, widely considered the nation's most advanced, generated only about half a gigawatt at its peak last July. Massachusetts is betting big on a technology that remains relatively new at this scale.
The state's order is notably expansive in what counts toward the goal. Rather than narrowly defining virtual power plants, it encompasses demand response programs, energy efficiency measures, and EV charging management—recognizing that all these technologies operate on the same principle: reducing or reshaping electricity consumption to match supply. This flexibility matters at a moment when the VPP concept still varies depending on who's describing it.
The approach has won cautious enthusiasm from Larry Chretien, executive director of Green Energy Consumers Alliance, an advocacy group covering Massachusetts and Rhode Island. "We're excited," he said, while acknowledging the deeper ambition: "We're hoping this helps kill off some peaker plants." Replacing expensive fossil fuel infrastructure with distributed networks could unlock billions in grid investment savings.
Yet the virtual power plant story in America is not uniformly optimistic. In Minnesota, utility regulators approved a notably different model in May. Xcel Energy won approval to deploy 200 megawatts of neighborhood-based batteries—each ranging from 1 to 3 megawatts—but with a critical difference: Xcel would own and control the batteries outright. The company calls the program Capacity*Connect and argues that centralized ownership ensures batteries work safely and reliably, storing energy when prices are low and releasing it when demand peaks.
Consumer advocates, however, see a troubling precedent. John Farrell, co-director of the Institute for Local Self-Reliance, argues that utility ownership creates perverse incentives, reducing the kind of distributed accountability that makes decentralized systems efficient. "The Minnesota commission went about it the wrong way," he said, warning that concentrated ownership may lead to inadequate cost controls compared to consumer-owned alternatives.
As states navigate these different paths—Massachusetts' expansive, distributed vision and Minnesota's utility-led approach—the broader pattern is unmistakable: virtual power plants are no longer theoretical. They are arriving, reshaping the grid one battery and one regulatory decision at a time.