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Virtual power plants have the potential to optimize the grid by integrating and managing energy from renewable sources, electric vehicles, batteries, and smart home devices.

The "virtual" aspect of virtual power plants is the integration of wind, solar, hydro, or other renewables, often incorporating battery backup systems. This forms a decentralized (or virtual) power plant. Despite using diverse energy sources, VPPs can offer a cost-effectiveness of up to 60% compared to conventional plants. 

, improving artificial intelligence technology can boost consumers’ confidence in participating in VPPs. The Department of Energy's current objective is to increase national VPP capacity to 80 to 160 GW by 2030.