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AGL hits pause on virtual power plant in technology “rethink”

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rsz_screen_shot_2017-08-29_at_15237_pmAGL Energy has informed customers of its ground-breaking “virtual power plant” in Adelaide that their installation will be delayed while the company reviews its technology choices for the program.

The project is designed to link 1,000 solar households with battery storage and smart software, creating what CEO Andy Vesey says will be a 5MW solar-based “virtual power plant”, that could deliver energy and grid services when needed.

The plan was first flagged last year, and its “Go Live” official launch in March – attended by federal energy minister Josh Frydenberg – gained controversy when the South Australia premier Jay Weatherill “gatecrashed” the event and launched an eviscerating attack on the federal government’s energy policy.

AGL has long insisted that its plans for the VPP are on track, even though only some 250 households had been connected by early August, and some 700 systems sold. The $20 million program, partly funded by ARENA, offers battery storage installations at around $3,500 -a considerable discount to market prices.

Over the weekend it emerged that prospective customers had been informed that their installation would be delayed.

One customer, commenting on AGL’s community blog under the name “Frogster Rookie”, said he was supposed to receive his VPP this week, but was told a few days ago that all further deployments in the project had been cancelled while AGL evaluated “alternative/newer products”, and that the contract was effectively cancelled.

“I could elect to get a refund or stay in the ‘queue’ to consider offers later, but these will be made around the end of the year,” the correspondent wrote.

“I asked whether I could have the existing device installed and was told this is not possible. Incidentally the contracted product was the Sunverge SIS 11.6. It is disappointing to have the contract unilaterally canceled a week before installation.”

AGL responded on the blog by insisting that the VPP program had not been cancelled but that the company was “in the process of finalising our next generation of products to include in the VPP. ”

“We acknowledge your disappointment at having your installation deferred at short notice and we apologise for this, but we wanted to provide you with the opportunity to opt-in to the exciting, next generation product offering when it is announced.

“We’re full steam ahead with the VPP program and excited to be almost ready to publish our first report through ARENA, which will include some of the VPP performance to date. We’ll post a link in the Community when its ready to view online.”

AGL has been partnering with US company Sunverge, which it partly owns, to provide the smart controls in the system, and a package known as Sunverge SIS 11.6 (relating to its kWh capacity). It is not clear which battery technology was being used, but it appears to be the storage hardware that is being rethought.

“We continue to actively monitor the evolving home energy storage market to ensure we meet the changing needs of customers and the market by offering leading edge technology,” an AGL spokesman told RenewEconomy in an emailed statement.

“As agreed with project partner ARENA, we plan to introduce new, next-generation battery technology into our next round of installations in our SA Virtual Power Plant (VPP) project.

“This will involve ceasing installations as we finalise details of the new battery technology to be offered in order to give VPP customers the opportunity to receive the next generation unit.

“Together with ARENA, we continue with our goal of demonstrating the multiple benefits of what will be the world’s largest residential VPP, which include helping customers save on their energy bill and demonstrating how VPP’s can create a more stable, resilient grid.”

RenewEconomy also sought a response from Sunverge, and further clarification from AGL about the storage hardware, but did not receive a response before publication.  

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  • Chris Fraser

    The AGL situation must be fairly fluid. Clearly, newer competitive products are coming into their orbit. This had better not be on the premise of slightly less quality and much higher profits. They could be at a crossroads where they either affirm previous agreements or lose customer trust.

  • Ken

    More likely its evidence of the ongoing cost reductions and improved technology thats happening in that space.
    They have probably found a better battery and their control platform has also improved.

  • Joe

    I don’t get this. To much fanfare the VPP was launched in ablaze of publicity in March and now it is brought to a halt. You have to start at some point. There is always going to be ongoing evolution with batteries and systems. Is there more to this story than what we are being told at the moment?

    • Rod

      In March they had 60 installed out of a potential 1000

      Makes you wonder why they bothered with the fanfare. Maybe just to give Jay a chance to get up in frydenberg’s face.

      • Joe

        I’m all for Premier Jay and Joshie F. having another ‘discussion’. When AGL do their …’VPP 2.0 Relauncher.’..can we have them both back at the presser.

  • Cooma Doug

    They have stumbled onto a lot of products and opportunity as they progressed. Its a learn as you go.
    We are moving from a system where we ram power down the line…needed or not. Dumb idea.

    We have moved to selling when needed and swapping when convenient.

    This is that moment where you were putting up Star Wars wall paper and you stumble across a cheaper and simpler option.

  • Grpfast

    Interesting that I’m due to have a new “smart meter” installed any day by AGL. This was at their instigation.
    It was only 4 years ago that the meter was upgraded when our 10 kw solar panels were installed. Their insistence and our cost.

    • Joe

      I live in NSW and can only speak of Energy Australia. This thing with meters is a sorry story, a bit of a debacle. Before I installed my rooftop PV I had some electrical work done and I had to go to TOU metering…so new meter installed. In 2008 with my first solar PV work I had to go to ‘Net Metering’…so new meter installed. Then the Gross FiT scheme arrived and I had to change from Net Metering over to Gross Metering…so new meter installed. Then the Gross FiT scheme ended 31/12/2006 and I had to change back from Gross Metering to Net Metering…so new meter installed. It has cost me each time to install these NEW meters. And Energy Australia aren’t finished there. They offer fixed plans with tiered FiT payment ( different to the standard 12.5 cent FiT ) for exported solar but that comes with…you guessed it…a NEW meter…which costs again. But not me this time, I am so over… NEW METERS.

      • Carl Raymond S

        A truely smart meter would allow OTA updates – like a smart phone or a tesla car. Deploying anything that can’t learn new tricks is bound to be obsolete before it wears out.

    • Rod

      I’m in SA and thankfully our “smart meters” are opt in and no cost.
      I also had a new meter 2008 ish but that was free too.