A virtual power plant (VPP) is lots of small energy assets, such as batteries, solar panels, electric cars and heat pumps, controlled together by software so they act like one power station.

No single home or business makes much difference to the grid. But hundreds of thousands of them, all shifting their use at the same moment, can.

How it works

  1. Assets sign up. Homes and businesses connect their batteries, EV chargers, heat pumps or other kit to a VPP operator, usually through their energy supplier or an app.
  2. Software groups them. The operator sees the whole fleet as one large, flexible resource.
  3. They respond together. When the grid is short of power, they discharge batteries or delay charging. When there is too much power, for example on a windy night, they soak it up.
  4. Everyone gets paid. The operator earns from grid services and markets, and shares the income with the people taking part.

How big are VPPs in the UK?

Already large. Two examples:

  • Kraken (Octopus Energy’s platform) reported more than 500,000 devices and over 2GW of capacity in 2025.
  • Axle Energy reported more than 300,000 devices and over 2GW in 2026.

For comparison, 2GW is roughly the size of a large conventional power station.

The Demand Flexibility Service

NESO, which runs the electricity system, has a scheme that pays homes and businesses to change when they use power: the Demand Flexibility Service (DFS).

  • In winter 2024 to 2025, nearly 2 million homes and businesses were signed up through suppliers and aggregators.
  • Since April 2026, the service can also pay people to use more power when there is a surplus, and businesses can take part with as little as 0.1MW of flexibility.

Why the government wants more of this

The government’s Clean Flexibility Roadmap aims for a big increase in flexible capacity by 2030, including 10 to 12GW from homes and businesses shifting their use. A new market facilitator, run by Elexon, is working on simpler rules and a common register so small assets can take part more easily.

Can a business or farm join?

Often, yes. If you have a battery, EV chargers, heating or cooling that can shift, or processes that can move by an hour or two, you may be able to earn from flexibility.

  • Ask your energy supplier or a flexibility aggregator what they offer.
  • Check what control they need, how often they will call on you, and how you get paid.
  • Earnings depend on your kit and how flexible you can be.

A business with solar and a battery is well placed to join. The battery stores daytime solar and can also earn from flexibility schemes. See energy trading explained and our commercial solar page.

Sources

Facts last checked 8 October 2026. This is general information, not financial advice.