AGL Energy Limited (AGL) announced in August 2016 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.
The project will cost approximately $20 million, with ARENA providing conditional approval of $5 million.
The project will be rolled out during an 18-month period in three six-month phases. The project offeres AGL costumers a 5-kilowatt, 7-kilowatt-hour Sunverge Solar Integration System storage unit for AUD $3,499 (USD $2,687). The installation could help customers reduce their electricity bills by around AUD $500 (more than USD $380) a year according to AGL, equating to approximately a seven-year payback.
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.
