AGL switches to Tesla and LG Chem for virtual power plant

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AGL has flagged the end of a long and frustrating wait for customers of its 5MW virtual power plant in South Australia by announcing battery storage makers Tesla and  LG Chem and inverter provider SolarEdge as its new technology partners.

The first stage of the rollout to around 1,000 homes was ended – and some customers say abruptly -when AGL ceased installations of battery storage units from US company Sunverge last year. The project has been on hold while new partners were sought.

The teaming with Tesla marks yet another key win for the California-based energy group, following the construction of its Tesla big battery in South Australia, its newly announced 250MW virtual power plant backed by the South Australia government, and other storage tender wins.

It’s also a notable win for LG Chem, the South Korean battery storage maker that analysts and installers believe probably leads the Australian market with household battery installations.

“Virtual power plants” are the name given to a network of battery storage installations that are linked by software so that they can provide a range of services – such as selling capacity into the grid, and providing network support.

AGL has described its plans as being like a 5MW dispatchable solar plant. Numerous other VPPs have been trialled around the country – Powershop and Resposit announced a new initiative on Tuesday – but the biggest has been the Tesla initiative backed by the SA government.

The plans for the ARENA-backed $20 million project, which would pool up to 7MWh of storage capacity and 5MW of peak capacity, were first announced in 2016, when AGL CEO Andy Vesey said such installations could be made “all across the grid”.

The first stage was switched on in much 2017, although its opening was overshadowed by a verbal spat between premier Jay Weatherill and federal energy minister Josh Frydenberg.

“Our South Australian VPP demonstration is a practical example of the new energy future,” Vesey said at the time. “What we are currently seeing is the ability to simultaneously aggregate the battery discharge, which is a necessary step towards full orchestration capability.

“This also demonstrates the capability of the VPP to provide grid support services, including peak demand management and frequency control services.”

AGL says the choice of Tesla, SolarEdge and LG Chem represents the “next generation, best-in-class technology,” and indicated some of the 280 or so households that had already received a battery would be able to upgrade to the technology from the new partners.

Head of new energy Elisabeth Brinton said households would have the option to install a 9.3kWh LG Chem Resu battery paired with a SolarEdge inverter, or a 13.5kWh Tesla Powerwall 2.

“Being part of our VPP project means participants will be able to use their home battery systems to store excess energy produced by their solar systems, allowing them to be discharged when they need it,” Brinton said in a statement.

“This helps households draw less power from the grid, which can help them save on energy bills.

“The upgrade of Australia’s largest operating residential VPP, which has more than 1.4 megawatts (MW) of battery capacity installed and operating, will increase its ability to help support the electricity grid at times of high energy consumption.

“The project is constantly evolving as we build on the knowledge we have gained from the operation of the VPP.

Installations would commence from early March 2018, which will be a relief to many of the customers who have grown frustrated by delayed in deliver of their battery storage systems.

Some had contacted RenewEconomy directly, and others expressed their views on a special community engagement page set up by AGL.

One Adelaide householder told RenewEconomy he had paid a $474.80 deposit in mid April, 2017, a site inspection had been completed and he was informed a system would be in place by October. Some said they had their contract cancelled just a week before the intended installation.

Emails sent to customers by AGL on Tuesday morning promised they would be contacted within 30 days, although the new technology may require new quotes and site inspections.

“Depending on the outcome of a site inspection, additional works may be required to ensure your home is suitable for installation of your new solar battery,” the email said. “In such cases where additional costs may be incurred we will provide you with a revised quote for your approval before proceeding.”


  • Chris Ford

    Hi Giles – 8th paragraph, “March 2017”?

    • Joe

      …the spellchecker in off mode again?

  • john

    AGL would not have made the move without good reason.
    With regard to the benefits in lowering cost to the consumers in general just a few hours for a few days during a heat wave pushes up the wholesale price on which all retail prices are set.
    This benefits everyone and is a very good move the more this built the better.
    As pointed out in this Renew Economy article on SA.; now imagine if sufficent battery’s were in place.

  • Steve

    My understanding is that SolarEdge inverters are DC to the battery, so you can plug the LG 400V DC virtually straight into the inverter. The Tesla is only AC though, so I’m not sure how it is gonna connect to the inverter.

    Any ideas?

    • solarguy

      They have to AC couple the inverter to the battery.

      • Barry Manor

        My understanding is that the Tesla Powerwall is AC-coupled, meaning it has an inverter (5 kW) built in and connects directly to an AC system (e.g. a standard residential setup). The LG Chem battery is DC-coupled; it has to connect to the house electrical system via an external inverter. Each type of coupling has advantages and disadvantages. Generally, DC coupling is favourable for off-grid applications, while AC coupling is fine for grid-connected homes. AC-coupled batteries suffer additional voltage conversion inefficiencies when used in off-grid applications.

        • solarguy

          Thank you Barry, I know because I design the bloody things. AC coupled has the same loss problem in hybrid systems, not just off grid.

    • Gary

      I was under the understanding that SolarEdge does not have the smarts to control the PW2. If that is true, only the LG Chem can be controlled “Reposit style”.

  • Mark Shueard

    Looking for reasons to chose LG over Tesla? Capacity is not one.

    • Marcus Whitley

      LG Chem is generally far more available for residential installations. Waiting times to get Tesla batteries can be quite long.

      • Mark Shueard

        Except I would bet they have stock promise. Like the SA GOVT do not need to worry about retail stock lines not would AGL.

        • Marcus Whitley

          There is nothing wrong with diversifying suppliers, not everything has to be Tesla. LG are also a solid product and fits the load profiles of more houses than the Tesla do

          • Mark Shueard

            45% more capacity is a pretty big one, why would one not chose Tesla if the price is not an issue as in this case? That’s the real question.

          • GlennM

            Well I did…because..
            1) It is a solid product that has been around for a long time
            2)It was compatible with my existing inverter so Zero installation cost
            3) It was available
            4) It has enough capacity for my needs.
            5) If I asked for a Tesla I would still be waiting and no one could give me a definite cost or time frame

          • Marcus Whitley

            Most houses don’t even have 9.8 kWh of peak electricity usage let alone 13.2 kWh. Powerwall 2 is pretty oversized for most households

          • Mike Westerman

            You numbers don’t line up with official estimates of consumption around Australia but then I’m not sure what you mean by peak electricity usage in regards to batteries. In Queensland peak electricity usage would largely line up with peak solar generation ie mid afternoon whereas batteries are for evening and overnight consumption, and if you use any grid power it would quickly undermine the value of the batteries.

          • Marcus Whitley

            I meant total electricity usage during times when peak tariffs are in place so (2pm – 8pm). The issues with bigger battery systems is that they require bigger solar systems, those bigger solar systems are gonna offset larger amounts of that afternoon electricity usage thus making the battery a worse investment.

            While batteries and Solar are very compatible as technologies they aren’t the greatest economic investments together as they are often competing for the same prize.

          • Mike Westerman

            Very true and storage at present is trumped by energy efficiency where Australia has plenty of room for improvements! Also amazing number of SA houses with solar who don’t heat HW during the day or run their ac to preheat/cool during daylight hours. A well insulated house, plenty of solar, LED lighting, use of timer controls, LPG cook top and that evening peak almost disappears!

          • Mark Shueard

            “”those bigger solar systems are gonna offset larger amounts of that afternoon electricity usage thus making the battery a worse investment.””
            WHAT. How do you figure that. The bigger the battery the more opportunity to save money not the other way around. You don’t have a battery do you. Otherwise you would understand.

          • Marcus Whitley

            You can’t make money if there is no electricity to offset, in a purely economical sense battery systems are generally just thrown together, if any investigative work is done then it is purely just the Solar company looking at how much electricity you export to the grid and reccomending a battery that size.

            The value of a battery comes from either the difference between off peak and peak electricity ( If charging from grid) or the difference between your feed in Tariff and peak electricity prices ( If charging from Solar).

            If a house uses 20 kWh / day, and a battery has 10kWh of usable capacity, then the best scenario is that your battery offsets 10 kWh of peak electricity. If you have a larger solar system that offsets 2 or 3 more kWh into the afternoon than a smaller one would then you have only 7kWh of optimal battery operation.

            Batteries are nice and all but most houses are better set up with Solar + Energy Efficiency measures, at least till batteries head towards $500/kWh. Unless the government offers some sort of rebate system for batteries.

            I wrote a thesis on the economics of Residential Solar PV and Battery storage.

          • Mark Shueard

            Honestly I don’t understand your focus points but if you’re telling me ( as that’s how I read it ) that a 13.5 kWh battery will make me worse off than the current 9.9 kWh battery or similar LG 9.3 kWh then that is not correct, it’s crazy actually. If you are talking about the “majority” of people then I disagree but lets leave that at your opinion being no wiser than mine and mine no wiser than yours.

          • Marcus Whitley

            Not saying you are worse off, just saying that you are no better off or not as well off as you could be. But im talking about an average household, not a specific circumstance.

            But you are right, we aren’t even really talking about the same things, its easy for the purpose of a conversation to become completely lost when your talking in a comment section on a 2 day old news article.

          • solarguy

            If you have a larger PV system offsetting 2 or 3kwh, then you won’t bite into a 10kwh battery as much, will you!

            You could employ a smaller cheaper battery, but they aren’t that much cheaper.

          • Marcus Whitley

            I meant it in the sense of 2 or 3 extra kWh, compared to a smaller system that is already off setting a good amount of day time electricity usage.

          • Mark Shueard

            Marcus. I already have a battery and it’s 9.9 kW usable. I speak from experience I sometimes need more

          • solarguy

            Marcus, It’s not just about peak time energy usage.

          • Marcus Whitley

            Economically it is, if your battery is offsetting shoulder electricity usage then it is not the optimal economic solution. The payback on batteries is currently still quite marginal for most houses and if you throw in any sort of discount rates that viability drops quickly.

          • solarguy

            PV output has to do better than charge a battery just to offset peak usage. Sure the peak offset is very desirable, but energy is used all the way to dawn, isn’t it. 13.2kwh is not going to be used just in peak time for most households, true, but that capacity won’t go to waste in an energy efficient home, but you do need the PV output to reliably charge it most of the time. The more you don’t draw power from the grid the lower your bill is going to be, no matter what time of day.

            I designed my hybrid system to go off grid if the utilities didn’t play ball. Now not many will be able to afford to do what I have done, but more will in coming years. PV is cheap compared to batteries and a bigger array than your load needs has many advantages, pre warming or pre cooling, FIT to further reduce the bill and to provide power on cloudy/rainy days.

            However the sun doesn’t shine at night of course and if you can only afford a small battery that will help tremendously for offsetting peak charges, but a bigger battery will allow you to reduce shoulder usage on crappy days, if not eliminate it.

            I have a 9.3KW PV array and 37KWh of storage. I don’t use grid power at all, it’s there as a backup. On crap days the PV generation and the battery combine to supply my loads and those loads are reduced on those days because we don’t require as much power. My bill is always in credit, as much as $210/ quarter.

  • solarguy

    The questions are:
    How many kwhs will they take out of any given battery and how often?

    What price will they pay/kwh?

    Will AGL own/lease or sell the systems out right?

    If AGL owns the system will they take what they want, when they want?

    • Cooma Doug

      If you have a battery on the grid, you do the maths. Bid for charging at 5 min price x.
      Bid for discharge at price 2x. Also bid into fcas at 4sec response to frequency triggers.

      In 25 years this might be a quiet market and totally predictable and stable. There will be many energy sharing options evolving with certainty of profiles. I expect many products and assets will be making the money and the energy system a low cost platform for the products creating bigger business opportunity. Sunlight is free now. So is wind. The things we do with that free energy will be where the real money exists.

      • solarguy

        Oh, is sunlight free…………..bloody marvellous!!