What is a virtual power plant?
A virtual power plant (VPP) is a network of distributed energy resources - such as residential solar and battery systems - that all work together as a single power plant.
The solar and battery systems can be located across many neighbourhoods and centrally controlled using WiFi technology and sophisticated software to charge or dispatch energy from the batteries.
VPP operators offer a range of financial incentives and other benefits to households in return for joining a VPP. These incentives can include discounted solar and battery systems or lease-to-own plans, reward payments, low electricity tariffs, back-up protection, and credits on your electricity bill each time your battery is used by the operator during a VPP event.
Everyone benefits
During a VPP event, the operator may discharge (sell) some of the electricity in your battery and/or charge your battery (buying electricity from the grid). Some operators may use your solar and battery system to provide grid stability services by discharging and/or charging the batteries for shorter periods at rapid speed to raise or lower the frequency of electricity in the grid. Either way, the VPP operator will seek to generate revenue from trading electricity on the National Electricity Market, and reward you and the other households enrolled in the VPP for your participation.
Tips for households
While the concept of joining a VPP is still somewhat new, VPPs are quickly gaining momentum as households look to take advantage of the financial incentives they offer.
When researching a VPP, you might like to consider:
- What do you know about the VPP operator and electricity retailer (if it is not the same company)?
- Which batteries can be enrolled in the VPP?
- How much does the system cost (including installation and new solar panels if needed)?
- How will you be rewarded for participating in the VPP (ie. annual, monthly or daily reward payments, a discounted battery, an exclusive retail offer)?
- What electricity plan will you be on and how does the usage charge and daily supply charge and Feed in Tariff (FiT) compare to other retail offers in the market?
- How much of the battery can you reserve for back up protection?
- Is there a contract term and/or early termination fee?
- How much electricity is the VPP operator contractually allowed to draw from your battery each year?
In South Australia, there are several VPPs in the market using batteries which are eligible for the Home Battery Scheme subsidy.
A summary of some of the VPPs in South Australia is listed below.
Simply Energy Virtual Power Plant
Simply Energy offers customers a daily VPP access credit payment in return for joining your battery with the Simply Energy VPP. Simply's "Large Battery Offer" offers up to $2,550 in VPP access credits paid at up to $7 per day over 12 months, and is eligible for Tesla Powerwall, LG Chem, and Eguana Technologies batteries purchased through specified installers.
Simply's "Smaller Battery Offer" offers up to $1,275 in VPP access credits paid at up to $7 per day over 6 months, and is eligible for sonnen and Varta batteries purchased through specified installers.
AGL Virtual Power Plant
AGL's VPP offer is open to both customers with an existing solar battery, as well as customers purchasing a new solar battery or solar and battery bundle. Customers accepting AGL VPP's Bring Your Own Battery offer can receive a sign-up bonus of $100 and a $45 quarterly bill credit over the first 12 months. Customers looking to purchase their battery or solar and battery bundle through AGL recieve $1,000 towards the cost of the system when joining the VPP for a five year term.
Eligible batteries currently include the Tesla Powerwall as well as LG Chem batteries with a SolarEdge inverter and a range of eligible solar hardware. New solar panels are not included in the battery price.
ShineHub SA Community VPP
SHineHub's Community VPP lets you choose your own energy retailer, and offers a $2,000 battery discount when signing up for the VPP at the time of your battery purchase. The ShineHub Community VPP also offers $0.45/kWh payments for charging and discharging your battery during VPP events (with no cap), on top of your normal solar feed-in tariff from your chosen electricity retailer.
Eligible batteries include the Alpha-ESS series in a range of battery sizes.
Tesla Energy Plan
South Australians can save $2,000 off the price of Tesla Powerwall (inc. GST and in addition to the Home Battery Scheme subsidy) by signing up to the Tesla Energy Plan.
Customers joining the Tesla Energy Plan receive a competitively low energy rate and save over $300 per year by receiving a $0 daily supply charge.
sonnen
sonnen offers two VPPs for sonnenBatterie owners to choose from - sonnenFlat and sonnenConnect.
sonnenFlat provides four flat fee monthly electricity plans to choose from by signing up to sonnen as their electricity retailer. Plans range from $49 to $69 per month. Plans can be selected based on the customer's installed solar and battery sizes and the annual household usage allowance they require. The customer must produce the minimum annual solar generation quantity outlined in the plan over a 12 month period or the usage allowance is adjusted.
sonnenConnect provides customers the option to join a sonnen VPP while keeping their existing electricity retailer and any feed-in tariffs they may receive. South Australian customers joining sonnenConnect are eligible for a $100 sign up bonus, and a daily reward every day their system is available online and stores clean energy (up to $24 monthly).
Eligible batteries for sonnenFlat and sonnenConnect include the sonnenBatterie eco and hybrid series in various sizes starting from 4 kWh usable capacity. Visit the website for terms and conditions and more information.
Discover Energy VPP Premium Plan
Discover Energy's VPP Premium Plan offers customers a competitive electricity retail plan including a solar feed-in tariff of 45c per kWh for the first 300kWh of exported energy, 25c per kWh for the subsequent 300kWh, and 9c per kWh thereafter. Solar and battery systems eligible for the VPP Premium Plan are available through Discover Energy's partner-retailers.
Compatible batteries include AlphaESS, LG Chem, BYD, and Sungrow. Battery models are to be compatible with Goodwe, Sungrow, AlphaESS, or SolarEdge (of up to 10kW) hybrid inverters. See Discover Energy's partner-retailers for more information.
Stoddart VPP
The Stoddart VPP is available to owner-occupiers building a new home. It offers homeowners the opportunity to add a discounted battery to the free solar system included with their new home and installed during construction. Stoddart Group is working with Powershop and Reposit Power to deliver the solution.
The Stoddart VPP is only availble on new homes and only through selected builders. Speak to Stoddart Group to learn more.
Diamond Energy GridCredits100
Diamond Energy offers customers VPP payments of 100c per kilowatt-hour through their GridCredits100 programme. The payments are initiated by Diamond Energy through the purchase of a customer's stored battery electricity, and are on top of competitive electricity tariffs and solar feed-in tariffs. Diamond Energy has offered GridCredits100 to customers since 2015.
GridCredits100 is available to customers with a Diamond Energy retail electricity plan, a Reposit Box and a compatible battery. Compatible batteries include LG Chem and SolaX Triple Power with specific inverters. Visit the Diamond Energy website for more details and to join the programme.
Last updated 16/3/2021.