AGL has today announced the launch of what will be the world’s largest virtual power plant (VPP), ultimately involving 1,000 connected batteries installed in homes and businesses in South Australia, providing 5 MW of peaking capacity and offering customers the opportunity to save on their energy bills.
Partnering with AGL in the demonstration project is the Federal Government via its renewables funding agency, The Australian Renewable Energy Agency (ARENA), and leading US-based energy storage and management company, Sunverge.
Joining AGL Managing Director & CEO, Andy Vesey, at an event in Adelaide to announce the initiative was South Australian Treasurer and Energy Minister Tom Koutsantonis and ARENA CEO Ivor Frischknecht.
“This project is the world’s largest, the first of its kind and an innovative solution to both help customers manage their energy bills and at the same time contribute to grid stability,” said Mr Vesey.
“It offers consumers the opportunity to be part of the world’s largest virtual power plant, giving them greater ability to consume more of the energy generated from their own rooftop solar systems, lowering power bills, reducing emissions and purchasing a battery at a significant discount.
“The virtual power plant will be capable of storing 7 MWh of energy, with an output equivalent to a 5 MW solar peaking plant. We believe it will demonstrate alternative ways to manage peaks in energy demand, contributing to grid stability and supporting the higher penetration of intermittent, renewable generation on the grid,” he said.
“This project is core to AGL’s strategy of being a manager of distributed energy resources. It also leverages our investment in Sunverge and helps us to continue to improve the digital customer experience,” said Mr Vesey.
The project will cost approximately $20 million, with ARENA providing conditional approval of $5 million.
How it works
The VPP works by using a cloud-connected intelligent control system that allows the batteries to be directed in unison. The vast majority of the time this will help consumers to self-consume their stored solar power during peak demand periods, benefiting both them and the broader community to manage peaks in electricity demand.
If the batteries are operated independently (outside of the connected system) they cannot be relied on to provide grid services. When working together at this scale, they can be used to provide grid stability services by discharging at a time that will be of greatest benefit for the customer and the community.
The project will be rolled out in three phases over about 18 months. Customers participating in the project will be able to purchase a heavily discounted 5kW/7.7 kWh energy storage system including hardware, software and install. In the first phase, running until April 2017, the first 150 customers based in metropolitan Adelaide will be able to purchase a Sunverge 5kW/7.7kWh energy storage system.
For customers with sufficient excess solar generation, this is expected to result in a seven year pay-back period. Consumers who don’t have solar already will be able to purchase an appropriately-sized solar system packaged with their battery.
Later phases will see an offering to narrower zones within metropolitan Adelaide where peak demand management and other network support services can be demonstrated.
It’s also hoped the project can demonstrate how relationships between electricity networks, retailers, consumers and the market operator can create new sources of value and stability in a renewable energy future.
This initiative is one example of the new kinds of technology-enabled products and services that energy utilities may increasingly seek to offer to customers, as discussed in a recent book chapter authored by AGL economist Tim Nelson in Future of Utilities: Utilities of the Future.
For more information, click here to read AGL's media release. Customers interested in more information or to register their interest to be one of the first 150 to get a battery, visit www.agl.com.au/powerinnumbers or call 1300 447 465.