Joseph Vellone serves as CEO of ChargeScape, an automotive joint venture to make EV charging cheaper and simpler for Americans.
As AI adoption grows, many data center operators are caught in a bind: delay commissioning to wait for critical grid infrastructure and power generation to come online, or explore alternative solutions. Drawing from case studies and my experience in this industry, let’s look at two promising solutions: vehicle-to-grid (V2G) and virtual power plant (VPP) technologies. When applied effectively, these can help power data centers, ensure grid resilience, and even unlock a new revenue stream for automakers and EV drivers.
VPPs, V2G And Why They Matter
AI data centers—known for their constant, high-density electricity demands—require a balance of continuous power supply and instantaneous generation to satisfy temporary surges. VPPs and V2G are distributed energy resource (DER) technologies that can help strike this balance.
• Virtual Power Plants
VPPs aggregate distributed energy assets such as EVs, stationary batteries and rooftop solar panels into coordinated systems that can act as dispatchable grid-scale resources. This technology can help keep the grid balanced by reducing electricity demand over sustained periods.
VPPs have existed for years, and a number are mature enough to deliver meaningful grid-balancing and demand reduction. For example, Renew Home, a VPP composed largely of smart thermostats, controls about 3 GW of home energy demand. Voltus, a VPP focused on commercial and industrial customers, can supply a total of 5 GW of capacity across the U.S. and Canada.
• Vehicle-To-Grid Technology
V2G technology enables bidirectional energy flow in electric vehicles (EVs), which can export power to the electric grid. This can effectively transform EV batteries into miniature power plants. While vehicle-to-grid technology is still nascent, EVs are already helping to power buildings—even data centers. In Virginia, Dominion Energy is testing V2G across 50 school buses that can supply an estimated 3 MWh of power back to the grid.
Current Policy Momentum
To meet surging AI energy demand, governments are quickly adopting new strategies and policy frameworks. The European Union has adopted the AI Continent Action Plan, committing 200 billion euros to AI gigafactories, data centers and power infrastructure. Similarly, the U.S. government has lent support to the $500 billion Stargate project to fund AI infrastructure. State-level mandates, such as Maryland’s DRIVE Act, require power utilities to allow EVs to connect to the grid and export power, and to pay EV owners for the power they export.
Similarly, VPPs have enjoyed policy momentum at the federal and state levels. FERC Order 2222 has mandated grid operators nationwide to open their energy markets to VPPs. States like Oregon have seen utilities propose major VPP investments, with utility Portland General Electric planning over 1,000 MW of VPP capacity by 2029. In 2024 alone, 38 states and the District of Columbia “took a total of 105 policy actions on virtual power plants and distributed energy resource aggregations.” These policy advances signal that VPPs are moving beyond pilot programs into mainstream grid planning and operations.
Challenges And Considerations
While V2G and VPP technologies offer promising solutions for data center operators, businesses must navigate several implementation challenges to realize their full potential:
1. Low Customer Adoption
According to Wood Mackenzie, less than 20% of North America’s total VPP capacity has been enrolled, indicating a massive untapped potential. One major reason for this gap is that many people find the concept of VPPs difficult to understand, and they can be further put off by poor and/or strict messaging requirements. To help bridge this gap, I believe it’s important for energy-as-a-service (EaaS) providers to focus on clear messaging and customer support. Financial incentives and auto-enrollment at the point of purchase can also be effective methods for encouraging participation.
2. Technical Complexity
The distributed nature of VPPs and their composition across different device types can create complex control and operational challenges in the cloud. As the industry matures, new protocols such as IEE 2030.5 could help standardize communications and control.
3. Hardware Fragmentation
A lack of standardization and interoperability among bidirectional chargers from different automakers can present challenges to scaling up V2G. However, some groups in Europe are “focusing on the CCS Type 2 connector for both AC and DC charging, complemented by the ISO 15118.20 protocol” in their ongoing efforts to improve EV charging infrastructure.
4. EV Battery Degradation
If managed ineffectively, V2G can have a negative impact on EV batteries’ longevity, since EV batteries can only be recharged so many times and have a limited shelf life. One way to address this issue is to use V2G technologies offered directly by the automaker; in my experience, these are typically backed up by the manufacturer’s warranty and can help preserve battery health.
How Data Center Operators Can Leverage These Technologies
As data center operators across the U.S. scramble to source electricity and set up grid interconnections, an obvious power source is likely sitting in their parking lots. Instead of waiting up to seven years to build a new power plant, operators can quickly power up data centers through a strategic approach to V2G and VPP deployment.
To determine if a VPP is right for your business, consider factors such as:
• Energy Demand: Assess your facility’s baseload requirements versus peak demand patterns. Data centers with consistent high-density loads may benefit most from V2G export during grid emergencies, while facilities with variable workloads can leverage VPPs for both cost optimization and reliability.
• Infrastructure Readiness: Evaluate your existing electrical infrastructure’s capacity for bidirectional power flows. Most modern off-grid solar systems are built around a bidirectional inverter with an inbuilt charger, often called an inverter-charger, which can manage power flow in two directions.
• Business Case: Calculate potential revenue streams from grid services, demand charge reduction, and backup power savings. Key factors to include are the potential for peak load reduction, generation credits, and avoided energy costs.
Electric vehicles are redefining how we conceive of electricity—not just as something that comes out of a power outlet but also as mobile energy storage. With the rise of AI, data center operators can tap into new power-supply sources such as V2G to ensure reliability of operations, all while powering the digital future more sustainably.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
