Google funds a 1 GW virtual power plant for PJM data center power
Google and Voltus added 1,070 MW to a 100 MW virtual power plant in PJM on 22 October, contracted to 2040. Google is buying peak-hour headroom on a grid that is 6,623 MW short.
WIRE · HYPERSCALERS · GOOGLE · Data as at 23 Oct 2026
Google is paying thousands of homes and businesses in the US mid-Atlantic grid to use less power at peak times, so its data centers can draw more. On 22 October 2026 Google and Voltus, a demand-response company, added 1,070 MW to a 100 MW virtual power plant they agreed in June, taking it to about 1.17 GW in PJM, the largest US power market. Voltus expects to reach full size in three to four years and run it for Google through 2040. On the hyperscalers layer, this is a hyperscaler buying peak-hour headroom on a grid that has run out of it, rather than waiting for a new power plant.
What happened
22 October 2026 · Voltus and Google
An extra 1,070 MW of "bring your own capacity" in PJM
Google funds it. Voltus signs up batteries, smart thermostats, on-site generation and factory processes that can cut demand when the grid is strained, and offers that cut into PJM's market
The term
Three to four years to build, contracted to 2040
The June deal ran about three years. Voltus says the first 100 MW is already filled and was over-subscribed, and that the new capacity will offset load at several Google data centers in PJM. Price was not disclosed
The mix
Batteries will be "a chunk"
Mostly commercial-scale batteries behind the meter, plus some home batteries through partners. A contract to 2040 lets those owners finance batteries without betting on yearly auction prices
The backdrop
Federal regulators turned down PJM's own large-load plan this month
PJM had proposed that new data centers bring their own capacity or face being cut off in grid emergencies. FERC largely rejected it in October, so voluntary deals like this one are now the main route
Why cash cares
PJM already says it is short. Its auction for the year from June 2027 cleared at the price cap of $333.44 per MW-day across the whole footprint and still came in 6,623 MW below the reliability requirement. Nearly 5,100 MW of the rise in forecast peak demand that year came from data centers. When a grid is that tight, the scarce thing is not energy over the year. It is the few hundred hours of peak, and whoever adds load at peak is the one regulators and neighbours push back on.
A virtual power plant sells exactly that peak. At the capped price, 1,170 MW is worth about $142 million a year in capacity payments before PJM's accreditation discount (our arithmetic). Voltus says a site can earn up to $350,000 per MW-year from demand response, which would put the full portfolio near $410 million a year at the top of that range (our arithmetic). Google pays some of that, and the market pays the rest.
The useful comparison is time. Most of the new utility supply Google and Microsoft signed this month, in Indiana and Arkansas, starts in 2028. Voltus says this ramps over three to four years, and much of it is batteries and thermostats that already exist. For Google, the payment buys a defensible answer to "where does your peak come from" while the slower plants get built.
Figure: Google's 1.17 GW is about a sixth of PJM's 2027/28 shortfall. Voltus and Google figures from 22 October 2026; PJM figures from its 2027/28 capacity auction.
The second-order read
Who gets paid. Voltus first, as the aggregator Google pays. Then the homes and businesses that sign up, through bill savings and direct payments. Then the makers and installers of commercial batteries, because a contract to 2040 turns a behind-the-meter battery from a merchant bet into something a lender can finance. Demand-response revenue in PJM was already up 240% to about $524 million in 2025, on higher capacity prices.
Who gets paid less. Peaking power plants that set the price at the top of the curve. Every megawatt of reliable demand cut at peak is a megawatt PJM does not need to buy from a new turbine. One gigawatt does not move a 145 GW market, but it is one of the largest distributed capacity contracts any hyperscaler has signed.
Who carries the risk. Google. Peak relief from thousands of sites has to show up when called, every time, for fifteen years. If it under-delivers in a heat wave, the reliability argument Google is buying goes with it.
Stuck step. Peak-hour capacity on the PJM grid. Chips are no longer the scarce input; Amazon is already holding racks waiting for power. What Google is buying here is permission to plug in.
Two cautions
The price is private. Neither company has said what Google pays per megawatt, so the $142 million and $410 million figures are market reference points, not Google's cost.
Demand response is not a power plant. It lowers peak demand for a few hours. It does not supply energy for a data center that runs all day, so Google still needs the utility and nuclear deals behind its campuses, like the Entergy Arkansas package announced on 19 October.
What would change the view
- Google or Voltus naming which PJM campuses the capacity is tied to, which would show whether it speeds up a specific connection.
- A second hyperscaler signing a contract of similar size, which would make this a market rather than one buyer.
- PJM or the states giving data centers faster hookups in exchange for proven peak cuts, which would put a clear value on each megawatt.
What to watch
- PJM's next capacity auction, for the 2028/29 delivery year, and whether demand response clears more than the 7,299 MW it cleared for 2027/28.
- PJM's next move on large loads after FERC's October rejection, and whether it gives credit for deals like this one.
- Alphabet's third-quarter results, for capex and any detail on power contracts behind its US campuses.
Read: the hyperscalers layer, the AI data centers layer, and how hyperscalers buy power
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Not investment advice. Do your own research. The $142 million, $410 million and "about a sixth" figures are our arithmetic from the published capacity price, Voltus's stated payment range and PJM's shortfall.
References
- Voltus, "Google and Voltus Announce One Gigawatt Bring Your Own Capacity Agreement in PJM", 22 Oct 2026
- Google, "We are working with Voltus to build a 1-gigawatt virtual power plant", 22 Oct 2026
- Utility Dive, "Google supersizes PJM virtual power plant to more than 1 GW", 22 Oct 2026
- Latitude Media, "Google is purchasing a gigawatt of distributed capacity in PJM", 22 Oct 2026
- Canary Media, "Google plans big virtual power plant in energy-strapped PJM grid", 22 Oct 2026
- PJM Inside Lines, "PJM Auction Procures 134,479 MW of Generation Resources", 17 Dec 2025
