What You Need to Know About Virtual Power Plants in Australia


Renewable energy has been a popular topic of conversation in Australia lately. So, let’s take a look at virtual power plants (or VPPs). It’s something that you may or may not have heard of before; it just depends on whether you actively keep up with the industry or not. Regardless, here’s what you need to know about them in Australia!

What is a Virtual Power Plant?

A virtual power plant is made up of a group of solar and battery storage systems. This includes residential homes and business premises. VPPs can also include other energy resources, such as electric hot water systems. These systems are then all managed by a cloud-based control system and operator. Any of the resources under a specific VPP will be controlled by an operator that will release the stored energy from the batteries into the grid. This will happen when demand for electricity hits its peak and the price for exporting is at its premium.

Why Are Virtual Power Plants Being Trialed and Used?

Virtual Power Plants Blog | Rooftop Solar

Energy that is taken from battery storage systems in a VPP can help the grid without relying so much on coal power. This is because it’s completely renewable; generated by solar power systems and stored in batteries. It’s then distributed by the operator to help stabilise the electricity grid in times when it’s needed. As a result, it helps us lower our reliance on coal power… which is brilliant! The technology itself has been tested around the country over the last couple of years and now, as a result, some electricity retailers are now offering customers the option of joining a VPP.

Another reason for the trialing and implementation of VPPs is the affordability of a battery storage system upon joining one. Basically, when you join a VPP, you’ll get an upfront discount on the purchase and installation of a battery storage system. Sometimes, you’ll even get a higher feed-in tariff rate (or maybe even both a discount and higher feed-in tariff if you’re lucky). The only thing is… you give up control of your system to a third party. So, if you’re thinking of joining a VPP, just do some research. Firstly, to make sure there’s one available in your area to join and secondly, to ensure you’re not getting the short end of the stick when it comes to being rewarded for your contributions to the VPP you’re joining.

Can I Join a Virtual Power Plant in My State?

You can join a virtual power plant in parts of South Australia, Queensland, New South Wales and Victoria. However, if you’re in Western Australia and feel like you might be missing out on some of the fun, that could be about to change. The technology is about to be trialed as part of Project Symphony; which involves a VPP that is currently being developed by Western Power, Synergy, the Australian Energy Market Operator (or AEMO) and Energy Policy WA. This trial will include more than 500 households and businesses in Southern River; which is about a 30-minute drive south of Perth’s CBD.

Here’s a fun fact. The world’s biggest virtual power plant is in South Australia! It’s made up of a network of 50,000 solar power systems and Tesla Powerwall batteries. If you’ve been doing some reading up on battery storage, you would’ve seen the Tesla Powerwall pop up. It’s one of the most popular battery storage systems in Australia and the world. The company recently announced that they had cracked 200,000 installations worldwide!

So… Are You Sold on VPPs?

Virtual Power Plants Blog | Tesla Powerwall

Whether you’re sold on the concept of virtual power plants or not, you’ll likely be tossing up between joining one or investing in your own battery storage system. If that’s the case, you’ll know that installing your own battery is an expensive investment. For example, let’s bring it back to the Powerwall quickly. A Powerwall battery with the supporting hardware will set you back nearly $13,000 before installation. So, if you can’t justify the price, joining a virtual power plant is an option in certain places around the country.

While VPPs are a great idea and make battery storage systems more affordable, there are some things to keep in mind. Some VPPs require you to already have a battery installed before joining. As you can imagine, this removes the benefit of an upfront discount on your system… but there’s also a chance that you could have installed a battery that’s not eligible. One of the main reasons that Aussies install battery storage systems is to protect their home from blackouts by not relying on the grid at all. When you join a virtual power plant, you can get little to no reserve from your battery storage system… which takes away these benefits.

There’s still a bit to think about if you’re undecided. Hopefully this has been a helpful read, but if you are still on the fence, just keep doing your research and you’ll soon be able to make your decision.


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Understanding Batteries

Off-Grid Systems

For some households a battery system can be of great benefit and minimise a home’s reliance on the grid. However, it’s important to understand for a battery to be useful your solar system needs to be generating excess energy for the battery to store, which you can then use at night or when the sun is not out.

When selecting a battery, you’ll want to invest in a system that is most suited to your home and can drive the best return on investment (ROI). Despite a larger upfront cost, a higher quality battery may significantly increase your ROI.

    Battery systems start from $6,000 and costs can vary greatly based on the following factors:

  1. Cycle Life-Time

    The number of times a battery can fully charge and discharge.

  2. Battery Power (kW)

    How fast it can be charged or discharged.

  3. Storage Capacity (kWh)

    The maximum amount of energy a battery system can store.

  4. Battery Management System (BMS)

    An electronic ‘smart’ system that gathers data and manages the battery ensuring it does not overload or operate outside of its safe functioning zone..

  5. Inverter

    Battery systems require their own inverter if your solar system does not have a hybrid inverter.

  6. 'All-In-One Unit’

    A system which includes the battery, BMS and an inverter all in one unit.

  7. Warranty

    Length of time or cycles the battery system is under guarantee.

  8. Blackout Protection/Backup

    It’s important to note this is not a common feature of a battery system and could cost thousands of dollars to include. Blackout protection not only requires additional components but also a specialised installation and rewiring. For grid-connected homes, the cost for blackout protection can outweigh the benefit.

Additionally, if your purpose for adding battery is to go Off-Grid and become completely independent from the grid you will need to ensure your solar system can generate enough energy to power your home and your battery system is large enough to store this energy. For homes in metro areas going Off-grid is not cost effective and is only recommended for those in remote areas with limited access to the grid. Off-grid solar systems with battery start at approximately $30,000.

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