The Australian Renewable Energy Agency (ARENA) has committed $2.46 million for the Australian Energy Market Operator (AEMO) to run a virtual power plant (VPP) integration trial that will look to demonstrate the operational capabilities of VPPs to deliver energy and frequency control services.
To further support the penetration of distributed energy resources into the Australian electricity grid, and to help consumers get the most from their generation, ARENA also announced a commitment of $10 million to accelerate the deployment of new software that will allow consumer energy assets to be registered and visible to the grid.
The concept of virtual power plants is not a new one to Australia.
Just last week Ausgrid, the largest distributor of electricity on Australia’s east coast, with distributed energy leader Reposit Power, launched a 1 MW trial VPP which will encompass 233 customers across 170 suburbs around Sydney, the Central Coast, and the Hunter region of New South Wales.
Simply put, VPPs are defined as a network of distributed power generating units that, together, make up a larger whole, one which can rival a more traditional power plant. VPPs can be made up of combined heat and power (CHP) units, wind farms, or solar parks, but are more commonly being designed to make use of residential solar + storage systems.
Specifically, the solar energy stored in residential battery systems can be tapped by a system operator and drawn into the grid as necessary, helping stabilise grid fluctuations and volatility, or just providing necessary electricity.
The announced ARENA funding will go towards running a VPP integration trial over a 12 to 18-month period which will focus on demonstrating the operational capabilities of VPPs to deliver energy and provide Frequency Control Ancillary Services (FCAS).
AEMO will invite existing pilot-scale VPPs around Australia to participate – including the 8 MW ARENA-funded AGL and Simply Energy pilot-scale VPPs in South Australia, originally announced back in March of 2018, and which will utilise Tesla Powerwall 2 battery storage units.
Participating VPPs will operate their portfolio of distributed energy resources to deliver electricity, system security, and local network support services while the funding will help to accelerate upgrades to AEMO’s systems and processes to allow for a better integration of VPPs before they reach the commercial scale.
Currently, VPPs are being built at small, pilot-scale sizes of between 5 MW to 10 MW, but AEMO expects there may be up to 700 MW worth of VPP capacity by 2022. Further, as the pilot-scale projects prove themselves viable, the technology will involve and larger VPPs will likely begin to emerge.
“AEMO needs visibility over VPPs and the ability to test how they operate within the market if we want to maximise the benefit both to consumers and to the system,” said ARENA CEO Darren Miller. “This trial will allow us to learn how to better integrate larger scale VPPs in the coming years.
“As we transition to a more decentralised energy system, VPPs have an important role to play in harnessing the collective potential of consumer owned energy assets like rooftop solar, batteries, smart appliances and electric vehicle charging. VPPs could see vast improvements in the reliability of the network and an increase in market competition which will ultimately benefit all customers.”
“Australia’s energy landscape is transforming towards a deep penetration of consumer-level renewable generation and storage capability,” added AEMO Managing Director and CEO Audrey Zibelman. “Our focus is on the operation of the bidirectional system to increase system security and consumer value for both VPP participants and the power system as a whole.”
The VPP trial will likely be supported by the Decentralised Energy Exchange (deX) software platform, developed by Australian energy technology company GreenSync, which on Friday benefited from a further $10 million funding grant from ARENA.
Designed to allow consumer energy assets to be registered and visible to the grid, the deX software platform will be technologically agnostic and open to all technology providers, networks, and retailers, as well as market bodies.
Specifically, deX aims to become a digital marketplace that allows home and commercial building-based energy assets and appliances such as solar PV installations, batteries, smart air conditioners, and hot water systems, to bid into the market to be used for a range of grid services such as managing frequency, providing energy for the wholesale market, and reducing network constraints.
“Studies indicate that virtual power plants could account for 700 MW of capacity by 2022 and consumer-owned distributed energy could account for up to 45 per cent of all generation within two decades,” said ARENA’s Darren Miller.
“In a rapidly evolving energy market and growth in consumer energy, GreenSync through their deX platform is addressing vital issues with DER including physical integration and visibility with the grid, ensuring network limits are considered when dispatching, and achieving financial market integration to ensure value is maximised for consumers that own DER.
“The deX platform is an exciting project for ARENA in that this project was initially developed at an A-Lab session in consultation with energy companies, was piloted and is now in the final stages of being rolled out as a commercial product that could change the way energy is bought and sold in the future.”
“We welcome this investment that enables the Australian electricity industry to transition to a decentralised energy system,” added GreenSync CEO Phil Blythe.
“As Australia is leading the charge with this technology globally, GreenSync sees a significant export opportunity for this and other innovative energy technologies in the deX ecosystem to meet the challenge of powering our grids by 100% renewables.”