California is at a crossroads. Electricity prices in the state are soaring, and growing peak load from electrification will continue to push up costs for customers. Virtual power plants (VPPs) offer a cost-effective way to manage this peak load, but there’s a gap between the resources that California has access to and what it’s currently using. 

This paper identifies key challenges in three critical areas hindering the growth of California’s VPP market and proposes targeted regulatory and market reforms to unlock demand-side flexibility at scale.