Virtual power plants have proven the model: aggregate distributed energy resources, dispatch them as a fleet, and participate in wholesale markets. Residential batteries led the way. But the next wave, commercial building flexibility, is larger, more complex, and requires a fundamentally different approach.
Why Residential Batteries Were First
Home batteries are simple to aggregate. Each unit is identical. Dispatch is binary: charge or discharge. The homeowner either opts in or doesn't. A VPP operator can enroll thousands of home batteries through a single integration and dispatch them with uniform commands.
This simplicity enabled VPPs to scale quickly. Today, aggregators manage gigawatts of residential battery capacity across markets like Australia, California, and Texas.
The Commercial Opportunity Is Larger
But residential batteries are a fraction of the flexibility available. Commercial buildings (fuel stations, supermarkets, hotels, warehouses) contain orders of magnitude more flexible load. A single supermarket has 100-200 kW of HVAC and refrigeration that can shift. A portfolio of 300 supermarkets has 30-60 MW.
For aggregators building VPPs, this is the next frontier. Commercial flexibility is larger than residential batteries, available in every market, and largely untapped.
Residential battery: 5-15 kW per home.
Commercial building: 50-500 kW per site.
Commercial portfolio: 10-100 MW across hundreds of sites.
Why Commercial Is Harder
Commercial flexibility can't be dispatched like batteries. You can't send a simple "discharge now" command to a supermarket. HVAC has comfort constraints. Refrigeration has food safety limits. Lighting has occupancy dependencies. Each load type has different flex envelopes, different lead times, different recovery patterns.
This complexity is why aggregators haven't cracked commercial at scale. They can dispatch batteries because batteries are simple. Commercial loads require an orchestration layer that understands building physics.
The Missing Layer
What aggregators need is a translation layer. On one side: a simple dispatch API that looks like any other VPP resource. "Reduce this site by 50 kW for 30 minutes." On the other side: real-time orchestration that figures out which loads to shift, in what sequence, while respecting every operational constraint.
The aggregator doesn't need to understand that 50 kW reduction means pre-cooling HVAC for 15 minutes, then coasting refrigeration on thermal mass, then dimming back-of-house lighting. They just need the 50 kW to show up when called.
Making Buildings Dispatchable
This is the shift happening now: commercial buildings becoming dispatchable resources. Not through hardware like batteries, but through software that unlocks the flexibility already inside them. HVAC, refrigeration, and lighting become controllable assets with known capacity, response times, and constraints.
For aggregators, this opens a new resource class. For building portfolios, it creates a new revenue stream. For grids, it adds flexibility at a fraction of the cost of building new infrastructure.
The Market Structure
The value chain is becoming clear: orchestration platforms make buildings flexible. Aggregators pool that flexibility into VPPs. Energy retailers and grid operators dispatch the VPPs for balancing, frequency response, and peak management.
Each layer does what it's best at. Orchestration handles building physics. Aggregation handles market access. The building owner gets value without becoming an energy market expert. The aggregator gets dispatchable capacity without becoming a building controls company.
The Next Wave
Residential batteries proved VPPs work. Commercial flexibility is where they scale. The aggregators who figure out how to tap commercial loads will have access to 10-100x more capacity than those stuck in residential alone.