Podcast Summary: Catalyst with Shayle Kann

Episode: Frontier Forum: How VPPs Earn Grid-Scale Trust

Date: March 10, 2026
Host: Latitude Media
Guests:

• Seth Frater Thompson, President & Co-founder, EnergyHub
• Stacy Phillips, Managing Director of Customer Load Management, Duke Energy
• Stephen Lacey (moderator)

Episode Overview

This episode of Catalyst dives deep into the evolving role of Virtual Power Plants (VPPs) and how they're increasingly trusted as core, grid-scale resources rather than just supplemental demand response. With guests Seth Frater Thompson (EnergyHub) and Stacy Phillips (Duke Energy), the discussion centers on recent innovations, operational reliability, planning integration, the "Huels test" for power plant equivalency, and what it will take for VPPs to become foundational for grid management.

Key Discussion Points and Insights

1. From Emergency Resources to Foundational Infrastructure

• Winter Storms & VPPs in Action: Major winter storms led to record-breaking demand peaks for Duke Energy. While restoration crews mobilized, tens of thousands of controllable devices (thermostats, batteries, water heaters) were orchestrated to prevent outages ([00:44], [01:15]).
• Evolution of VPP Technology: VPPs have shifted from basic one-way load control switches to interconnected fleets of devices with realtime telemetry, load shaping, and increasingly automated dispatch ([02:17], [04:51]).
• Shift in Peak Management: Initially, VPPs were mainly for summer peaks, but now they’re crucial in both summer and winter, reflecting larger shifts in utility needs ([02:17]).

2. Customer Participation and Program Scalability

• Growth of Customer-Owned Devices: Recent advances in customer-owned tech—thermostats, batteries, EV chargers—enable more flexible, interactive participation with less friction ([02:31], [03:11]).
• Balancing Reliability, Scalability, and Customer Experience: Modern VPPs are designed to minimize disruption for participants and maximize operational value ([03:58]).
• Incentives and Market Readiness: Duke Energy closely monitored adoption rates and costs before rolling out battery programs, highlighting the need for timing programs with market readiness ([07:05]).

“What’s cool about VPPs is... it’s also an opportunity for the average customer to participate in a way. This is something you can do that relieves pressure on the system, which improves reliability and affordability... that's a big change."
— Seth Frater Thompson, [03:11]

3. Reliability, Trust, and Integration into Grid Operations

• Reliability at Scale: Scale enables both statistical certainty (i.e., high predictability despite some customer drop-off) and operational repeatability—making VPPs dependable for daily grid use, not just emergencies ([05:32], [08:29]).

“Now [demand response is] a resource [...] you can use operationally and you can be confident that if you need to use it... that repeatability just changes the picture.”
— Seth Frater Thompson, [08:29]

• Planning Integration: VPPs are now included in Duke's Integrated Resource Plans (IRPs). Planners "shrink the challenge" of peak demand with VPPs before backfilling with centralized generation ([10:21]).

“Our planners [...] start first with what can customers help us do at peak? And then they back plan the rest of centralized generation based on that. One of them has a term he should copyright: ‘shrink the challenge’.”
— Stacy Phillips, [10:21]

• Gradual Trust-Building: Operational teams require rigorous demonstration of VPP reliability before fully integrating these resources. Third-party audits and detailed reporting help build trust ([11:45]).

4. Modern VPPs Versus Traditional Demand Response

• Key Distinction: Modern VPPs utilize two-way data, real-time analytics, and integration with utility tools, while legacy demand response generally lacked visibility and relied on guesswork ([13:12]).

• Practical Approaches: Even without "fancy software," Duke leverages advanced metering and data science to retroactively calculate and forecast VPP performance ([14:02]).

“Use what you’ve got and start from there to prove out those use cases, and one day you too will have 180 megawatts in the winter.”
— Stacy Phillips, [14:02]

5. The 'Huels Test': Achieving Parity with Traditional Power Plants

• Definition: The Huels test asks whether a grid operator can tell the difference between a VPP and a traditional power plant. Passing the test means VPPs are functionally indistinguishable in grid ops—removing excuses for distrust ([16:27]).
• Beyond the Test: Advanced VPPs can surpass traditional plants by delivering value at the distribution level (e.g., local congestion relief, supporting transformer longevity) ([17:50]).
• Naming and Recognition: There’s debate over terminology (“virtual power plant” vs. “customer power plant”), but consensus that customer-owned resources deserve visibility and credit ([18:28]).

“The Huels test is about solving the trust problem... basically, can you fool the operator? Could you swap out a VPP for a traditional power plant and they can't tell the difference?”
— Seth Frater Thompson, [16:27]

6. VPP Maturity Model (Level 0–4)

• Level 0: One-way, manual switches, no real-time feedback (but decades of experience).
• Level 1: Two-way data; still ‘press and pray’ but with better post-event analytics.
• Level 2: Consistent load shaping; multi-device orchestration and year-round use; operational value equivalent to peaker plants.
• Level 3: Automated VPPs fully integrated into utility systems for forecasting, dispatch, and planning.
• Level 4: Multi-objective optimization—solving for bulk grid, distribution, and customer outcomes simultaneously ([24:43]).

“Level four is where you go beyond the capability of a power plant and... support the distribution network...[while] providing those grid services to the utility.”
— Seth Frater Thompson, [24:43]

• Current State: Duke sees itself as a strong Level 2, moving toward 3 (full integration), and aspires to Level 4 in the next 5 years ([27:20], [28:08]).

7. Challenges: Technology, Regulatory, and Internal Processes

• Integration Complexity: Achieving higher maturity levels requires deep integration of IT, operational, and customer data systems, as well as ensuring cybersecurity ([27:20], [30:43]).
• Regulatory and Value Reform: Regulatory frameworks must evolve to value and credit repeatable, multi-use DERs appropriately ([23:01], [29:30]).

8. Operators’ Perspective: The 'Single Pane of Glass'

• Operator Adoption: Building operator trust required direct collaboration, hands-on demonstrations, and ensuring VPP controls fit seamlessly with existing workflows ([30:43]).

“We showed them the data... We figured out how to run the programs without lots of customers leaving, [and said:] please start using this. And I actually, last Saturday night they did it... in an unanticipated need, they decided to hit it on a Saturday night... and it did. It was great.”
— Stacy Phillips, [30:43]

9. What Does the Future Market Look Like?

• Key Benchmarks for Mainstreaming VPPs ([33:04]):
  • Core inclusion in IRPs and daily control room operations.
  • Solving grid issues beyond just peak events—24/7 value proposition.
  • Achieving maturity Model Level 3 (full integration) and Level 4 (multi-objective value).
  • Measurable contributions to affordability, reliability, and decarbonization goals.

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|---------|-------| | 03:11 | Seth Frater Thompson | "What’s cool about VPPs is... it’s also an opportunity for the average customer to participate in a way. This is something you can do that relieves pressure on the system, which improves reliability and affordability for the entire base. And that's just a big change, right?" | | 07:05 | Stacy Phillips | "Batteries... we watched prices come down, we watched solar at the residential scale grow and grow and said, okay, now it's time..." | | 10:21 | Stacy Phillips | "Our planners... start first with what can customers help us do at peak? And then they back plan the rest of centralized generation based on that. One of them has a term he should copyright—‘shrink the challenge.’” | | 13:12 | Seth Frater Thompson | “Do you have two-way data? That was the big kind of innovation... The ability to see data about what's available right now, the ability to turn that data into forecasts..." | | 16:27 | Seth Frater Thompson | "The Huels test is about solving... the trust problem... can you swap out a VPP for a traditional power plant and they can't tell the difference?" | | 18:35 | Stacy Phillips | “I have never loved 'virtual power plant' because I want everybody to know that it’s real. I think it should be called the customer power plant." | | 24:43 | Seth Frater Thompson | "Level four is where you go beyond the capability of a power plant and you now have the ability to support the distribution network..." | | 30:43 | Stacy Phillips | "We figured out how to run the programs without lots of customers leaving... and I actually, last Saturday night they did it... and it did. It was great." |

Timeline of Key Segments

• 00:44–03:11 — Winter events show real-world VPP value, rise of customer-owned DERs
• 05:32–08:57 — How reliability, repeatability, and scale are changing grid operations
• 10:21–11:45 — Institutionalizing VPPs in planning and building operator trust
• 13:12–16:08 — VPPs vs. traditional DR; practical considerations and data requirements
• 16:27–18:48 — Explaining and debating the Huels test
• 24:43–28:08 — VPP maturity model explained, where utilities stand today
• 30:43–32:50 — Integrating VPPs into daily operator tools (“single pane of glass”)
• 33:04–34:13 — The future: VPPs as daily, foundational grid resources

Takeaways for Listeners

• VPPs have moved from “nice-to-have” demand response programs to essential, scalable grid assets that can match—or surpass—traditional power plants when trusted and well-integrated.
• Customer-owned flexible resources now play a serious role in grid reliability, affordability, and decarbonization, especially as utilities invest in integration and data-driven practices.
• The ultimate goal is for VPPs of all maturities to be fully represented in utility planning, operated as confidently as any centralized plant, and valued appropriately by regulators—unlocking more participation and system benefits for all.