AGL eyes virtual power plants in link with battery storage developer Sunverge

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Australian energy utility AGL Energy has spent $US20 million ($A28 million) snapping up a minority stake in US-based battery storage solutions provider Sunverge as it seeks to accelerate its push into distributed generation and rooftop solar and storage and smart software.

The purchase of Sunverge was announced at the company’s interim earnings presentation, along with a plan to create a new renewable energy investment fund which aims to build 1,000MW of new large scale renewable energy capacity.

The purchase of Sunverge, which follows the purchase of a stake in Australian start-up Solar Analytics, and coincides with the launch of a “solar” component of its smart App, comes as AGL looks to appeal to the emerging home energy market, particularly with competition from telcos such as Telstra also emerging.

New managing director Andrew Vesey has placed great store in the “new energy” division, which will focus on solar, storage, electric vehicles and the like, although its plans were set back when the division head, Marc England, announced his departure to head New Zealand group Genesis Energy late last year.

Vesey says AGL Energy is attracted to Sunverge because it is an emerging leader in demand response management for “premises-based energy storage”, and he saw it as an “early mover advantage” for AGL.

He is also attracted to the idea of a “virtual power plant”, where AGL could tap into the battery storage systems of – say – one million customers. “We are keen on the concept of a virtual power plant,” he told an analysts briefing.

Sunverge has already entered into some trials with AGL Energy and this investment will underpin a “strategic partnership.” In fact, it will become the “exclusive channel” in Australia for its products.

AGL is not the first Australian investor in the San Franciso-based Sunverge. Last year Sunverge finished a major fund raising that was led by Australia’s Southern Cross Venture Partners ($A15 million sourced from the Australian Renewable Energy Agency), along with German industrial giant Siemens and France’s biggest oil company Total.

The AGL funding forms the major part of a new round of funding totalling $US36 million.

Sunverge also has a partnership with SunPower, which is majority owned by Total, and its solar and storage pilot program with SunPower will include Australia.  Sunverge is also involved in battery storage trials in 33 homes in three Queensland towns with Ergon Energy .

Vesey said AGL has been selling small number of household batteries to its clients, and is rapidly increasing sales of rooftop solar to consumers.

agl solar sales

Sales of rooftop solar panels to households was up 2.5 fold from a year ago, albeit off a low base, and sales to commercial clients up four-fold. AGL says it is now among top three retailers of solar PV in the last quarter of 2015.

Vesey, however, suggested battery storage was the big game changer in home energy systems, particularly with the likelihood of big price falls in the future. Part of the attraction of the Sunverge deal and investment was the ability to manage those systems.

He said it was clear that consumers were looking at battery storage and AGL needed to as well, and be the one which “orchestrates those resources” and their value to the grid and shareholders.

Vesey said Sunverge’s  energy solution will help the company better meet the needs of its customers in a carbon-constrained energy future.

“This future is increasingly based on decentralised products and services including digital metering, solar PV systems, as well as new technologies such as batteries, electric vehicles and other ‘beyond the meter’ energy solutions.”

solar command aglAGL also announced its “solar command App” developed by Solar Analytics, which it says will provide real time solar production, consumption and a “health check” for a homeowner’s solar system – as well as overall electricity and gas consumption.

Sunverge CEO Ken Munson told RenewEconomy last year that he thought that battery storage costs would fall three times quicker than rooftop solar, although the key was in the software that went with the technology. As Munson mentioned in his interview with RenewEconomy, Sunverge is not looking to take consumers wholesale off the grid.

Ivor Frischknecht, the CEO of ARENA, which provided the funds for the Southern Cross investment into Sunverge, said the partnership will accelerate the rollout of “state of the art” integrated battery storage solutions in Australia.

“Residential battery storage is currently in its infancy in Australia,” he said in a statement. “While only a small number of systems are currently installed, there is a lot of interest in the technology.

“As storage becomes more commonplace in Australian homes, we expect to see energy retailers firm up business models for selling new products and work through some of the regulatory constraints facing Australia’s emerging storage market.

“Solving these challenges will ultimately allow consumers to get more value from their rooftop solar systems and increase the supply of renewable solar power in our electricity networks, contributing to grid stability and reducing peak load stress.”



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  • solarguy

    I reckon it’s a fair bet that AGL and others will take power from customers batteries when ever the want and will pay sweet FA for it and leaving the customer short on storage. If we let them.

    • david_fta

      I reckon AGL are more fair dinkum than that; what AGL want to do is to sell you enough batteries that you’ll never be importing power from the grid, and also sell you so many solar panels you’ll not only produce all your own power, you’ll also be a net exporter to the grid.

      Out there on the grid, AGL will have more batteries to collect all the surplus power from all the people with oodles of solar panels, and then they’ll put that power back into the grid when the sun goes down for all the people who don’t have enough batteries plus panels to supply all their own power.

      It’s a simple enough concept, and it’s how and why there will always be a role for networks, even after all the coal-fired power generators are shut down.

      • solarguy

        Well, Dave you may have a point, but that isn’t likely in the short term. Do you know what the current cost of batteries are for even 5kwh storage? And would you like it if your 5kwh storage ( which you paid dearly for) was depleted some nights to feed the monster grid. And it’s unlikely they will offer much per kwh for it either if they can get away with it.
        They would love to sell that many batteries, but they also know that they need to build big solar and wind too, very soon.
        Time will tell, but the best prediction of future behaviour is past behaviour and any utilities past and current ain’t that good.

        • david_fta

          I guess I’m looking at this longer term; did anyone really believe all those Feed-In Tariffs would last longer than a change of government?

          AGL have already said they’ll be out of coal by 2050, I reckon it’ll be much much faster than that – I think AGL is anticipating the same medium-long term future as myself:
          1) loss of social licence to burn coal
          2) oodles of storage and smart networking.

          That is, I honestly do believe that AGL are setting out to be a different post-fossil company.

          • solarguy

            I suppose we can wish ourselves good luck. If they don’t pay a good price for pilfering peoples batteries or solar output then they will spend extra and defect from the grid. The ball is in their court now.

      • Spot on David. I agree. I put no weight on the `conspiracy’ theorist’s who put demonic like intentions on companies like AGL and Origin. I’ve been in contact with Origin over the years on the subject of renewables and found them to be very open and responsive, as are AGL come to think of it. They want a sustainable business model and people going completely off grid isn’t in their interests. Alienating your customer base isn’t either so expect to hear more good news stories from these two major players at least.

        • david_fta

          Thanks, Ross, as it happens I knew a bloke at Uni who became reasonably senior at Origin, I met him again ~2002, at which time he seemed somewhat sceptical of my banging on about climate change.

        • JeffJL

          So you agree.

          Could it be the hats. LOL.

      • DJR96

        The Sunverge package is only 5kW / <10kWh storage. Not big enough to be self-sufficient and that's the way AGL wants it. They'll gladly take your stored power during peal demand and leave you having to start importing during the night. Makes the grid work more efficiently and still allows the turnover and profit potential for AGL. But most defintely will not eliminate customers bills. And also doesn't alleviate the fixed cost parts of your bill either.

        • david_fta

          Not big enough to be self-sufficient and that’s the way AGL wants it

          Well, of course not. Self-sufficiency at a single site, using solar PV only, is a fraught exercise if you have even a week of cloudy weather, you’d need to deploy a huge number of panels to achieve self-sufficiency at that time … so what would you do with the huge surplus of power you’d be producing all the rest of the time?

          • DJR96

            Doesn’t have to be completely self-sufficient. The grid is still there for when there is extended poor generation.
            Part of the equation should include sub-station scale storage too. And any excess generation can be stored, traded and used by heavy use customers. It all offsets energy required from fossil fuel generation.

          • david_fta

            Hence my concluding remark

            It’s a simple enough concept, and it’s how and why there will always be a role for networks, even after all the coal-fired power generators are shut down.

    • john

      Well yes that is the business model
      The idea is that they give you a battery storage device and if they need draw on it any power left in it is for you.
      What that does is reduce the costs to the energy supplier and hence for everyone on the network.
      To the homeowner it is also a win because they get cheaper power and yes help out the person next door.

      • solarguy

        John, they won’t give you a battery, they’ll sell you one or lease it, which will cost you more in the long run. So we pay for the infrastructure and they capitalise on that model. That is ok, if you want cheaper bills, but the deal will be in their favour not ours.
        Business is business, they have a few different models to ensure they recoup lost revenue. Also they will build their own renewable generating and storage capacity as well because they’ll have to.
        Don’t think I’m anti grid, we need the grid, but we pay for it and in recent years to much. AGL, Origin et al have had a wind fall, so nobody should be gullible thinking their good corporate citizens.

        • JonathanMaddox

          So split the difference 65/35. If it reduces emissions in the long run, does it matter?

          • solarguy

            Reducing emissions of course is great that’s the aim. Elaborate on 65/35 split please

          • JonathanMaddox

            Purely arbitrary. So long as the environment and both parties benefit, I think that the exact distribution doesn’t matter so much.

  • lin

    Good move by AGL. All of the generators and grid operators should be pushing the climate change thing like mad. If they play their cards right, they stand to benefit from a big increase in electricity use as houses ditch gas for electric heating, cooling, hot water and even electric vehicles. They can offer improved storage and reliability options, regardless of how much PV capacity people install on their roofs, and make themselves some money from a good service provided.