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

AGL 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.