A VPP is a software layer, not a physical plant. Aggregators connect to domestic hardware, such as Tesla Powerwalls, GivEnergy systems and other inverter-linked batteries, through cloud-to-cloud APIs provided by the manufacturers. A dispatch instruction from the aggregator’s platform is passed through each manufacturer’s cloud to thousands of homes simultaneously. Each battery stops charging or starts discharging into the home, and the combined effect looks to the system operator like a single megawatt-scale reduction in demand. For the fundamentals, see our VPP explainer.
These fleets are paid through flexibility markets. The Demand Flexibility Service (DFS), run by the National Energy System Operator, pays households and aggregators to reduce demand during notified peak windows. Batteries are well suited to this: they can respond within seconds and maintain output for the full event, without anyone changing how they live. The most capable fleets also qualify for frequency response services, which require sub-second response through local control at the device rather than cloud signals.
The carbon case rests on what the batteries displace. The UK’s last coal plant, Ratcliffe-on-Soar, closed in September 2024, so today’s winter peak, roughly 4pm to 7pm on cold evenings, is met at the margin by gas: combined-cycle plants running harder and, at the extremes, open-cycle gas turbines (OCGTs), the least efficient and most carbon-intensive generators on the system. A distributed battery fleet charged from overnight wind and midday solar meets that same peak silently, locally, and with no combustion.
For investors and sustainability leaders, VPPs show how distributed assets can deliver system-level value. Each home battery added to a fleet is peak capacity that never needs to be built as a gas turbine.