Finance News

From Powering Machines to Powering Intelligence—The New Age of Electricity

Electricity is no longer just energy—it is becoming infrastructure for intelligence. For more than a century, electricity powered machines: factories, homes, and transportation. The grid now serves two new roles: powering intelligence (artificial intelligence (AI) and data centers) and coordinating millions of controllable devices (electric vehicles (EVs), batteries, heat pumps, and smart thermostats). Neither behaves…

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ThePostMaster

Jun 8, 2026

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Electricity is no longer just energy—it is becoming infrastructure for intelligence. For more than a century, electricity powered machines: factories, homes, and transportation. The grid now serves two new roles: powering intelligence (artificial intelligence (AI) and data centers) and coordinating millions of controllable devices (electric vehicles (EVs), batteries, heat pumps, and smart thermostats). Neither behaves like the passive loads the grid was built for—data center demand is always-on, requiring high-density power, while distributed devices can respond and adjust to grid conditions in real time.

COMMENTARY

This is not a transition—a word that implies substitution, coal to gas or gas to renewables. It is an addition. We are adding new load categories and new sources of flexibility to create a coordination layer that the grid has never had. The question is no longer just “how much generation do we build?” but “how much intelligence do we attach to the load we already have?” This shift means electricity customers, residential and industrial, will need to become active grid participants, while utilities learn to coordinate these millions of flexible devices as virtual power plants to effectively meet rising energy needs.

From Predictable Demand to Dynamic Loads

The grid was built for simple loads, such as motors, heaters, and lights. Now, we are plugging in systems where kilowatts become decisions—every AI training run and inference query is electricity converted into computation. At the same time, three forces are converging:

• Load is growing across multiple categories at once (AI, EVs, electrified HVAC and reshored manufacturing).

• The cheapest new generation is increasingly clean, winning on levelized cost, not just policy.

• Software can now orchestrate distributed flexibility at scale.

Today’s grid challenges aren’t just about adding generation—they’re about rethinking how load is managed, coordinated, and dispatched across a grid designed for one-way power delivery. For flexibility to scale, consumers and businesses will need to see its value. The fastest, cheapest capacity available today often lives behind the meter through virtual power plants (VPPs), automated load shifting, and managed device programs that reduce electricity bills while lowering grid demand peaks. To translate cheap generation into customer benefits, utilities or retail electricity providers (REPs) need to offer products and automations that make it easy for consumers to shift usage to lower-cost hours.

The Lower 900 MHz band (902 MHz-928 MHz) serves as the backbone to numerous critical industries, including healthcare, public safety, transportation, aviation, and utilities. The NextNav proposal seeks to shrink available spectrum for these devices by 60%. Source: Landis+Gyr

Limits of Traditional Grid Models

Traditional solutions—building new generation and transmission—are not moving fast enough to keep up with rising demand. Building infrastructure has become slower and more expensive due to supply chain constraints, permitting delays, and interconnection bottlenecks. Projects that once took years now take even longer.

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On top of a generation shortage, the current system often lacks strategies to enable flexibility and coordinate large loads. An outdated model, coupled with more frequent and severe extreme weather events, means the grid is more exposed than ever, increasing the risk of power outages. In the meantime, electricity demand isn’t waiting for conventional approaches to building generation to finish. U.S. electricity demand is rising again. The EIA now forecasts U.S. electricity use to keep climbing through 2027, growth that would mark the strongest four-year demand run since 2000 and the first time since 2007 that demand rises four years in a row. Rising energy needs are setting the stage for utilities, REPs, grid operators and regulators to implement innovative approaches to meeting demand.

Turning Load Into a Grid Asset

One way to meet peak capacity needs, even before new generation is built, is to reduce peak demand. Consumers can become active grid participants to create a grid that meets today’s needs. Coordinating residential energy assets—solar, batteries, EVs—and flexible demand from homes, small businesses, and industrial facilities can turn scattered devices into a network that supplies energy during peak demand. Along with leveraging distributed energy resources, utilities can use their customers’ loads to turn them into a grid asset rather than a liability. Treating loads from homes, small businesses, and large energy users flexibly, like a faucet that can increase or decrease the flow, can open more pathways for the grid to coordinate supply and demand, reducing emergencies and creating a cleaner, more stable grid.

VPPs: The Intelligence Layer

Turning load into a grid asset requires a new layer of coordination. VPPs coordinate devices like smart thermostats, EV chargers, solar systems, and batteries so they respond to grid conditions—cooling homes, charging vehicles, or storing energy when electricity is cheap and plentiful, and reducing demand when the grid is strained. To get the most out of this process, competitive retail providers, aggregators, and other market participants can enroll and coordinate distributed assets—aligning customer incentives with grid needs. This kind of program benefits both the end-user through bill savings and increased grid resilience, and the system through deferred investment in transmission and distribution and peak demand reduction. However, technology alone is not enough. If flexible demand is going to show up when it is needed, markets will need to compensate it on equal footing with generation. That means clear forecasting and transactions for real-time and day-ahead markets that value speed and accuracy, rules that allow aggregated behind-the-meter assets to bid like capacity, and performance-based compensation so that participants are rewarded for measurable outcomes. When VPPs can earn a stable, transparent revenue stack, capital will treat them as a real alternative to traditional infrastructure.

Getting VPPs Right

For VPPs to secure participation and achieve maximum impact, standardized guardrails are needed. The industry is increasingly being asked to develop standardized measurement and verification to ensure competitive retail providers, aggregators, and other market participants, as well as grid operators, have the transparency needed to understand performance accountability. Customer trust is also critical to the success of VPP programs. They need to have clear incentives and opt-out provisions as well as cybersecurity and data privacy requirements to ensure customer adoption happens on a scale that is impactful to the grid. Lastly, programs can expand beyond solar and battery owners to include thermostats, water heaters, and managed EV charging, and those assets will demand equitable benefits and simplified enrollment to encourage adoption.

Building the Grid for Intelligence

This new age of electricity requires us to build a new system, not replace one static system with another. We are adding intelligence, flexibility, and coordination to a system that is getting larger and more complex every year. The companies and utilities that win will make that complexity feel simple and valuable to customers, while capturing the economic upside of running a smarter grid. The grid that powered the industrial age delivered electricity to machines. The grid that will power the intelligent economy will need to coordinate millions of devices. Virtual power plants provide the intelligence layer that makes this possible, making the grid more affordable, reliable, and resilient. —PJ Popovic is CEO at Rhythm Energy.