AGL’s Vesey sees virtual power plants “all along the grid”

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AGL sees virtual plants in CBD buildings and manufacturing sites, as well as suburban homes, and says Australia will lead the world in energy innovation.

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AGL Energy’s plans to roll out “virtual power plants” around Australia will extend beyond clusters of homes and small businesses to institutional buildings and the manufacturing industry, the utility’s chief Andy Vesey has revealed.

smart grid

Speaking at the Disruption and the Energy Industry conference cohosted by RenewEconomy in Sydney on Tuesday, Vesey said centrally controlled networks of rooftop solar and battery storage, such as AGL is set to trial in South Australia, would be a key ingredient of the energy system of the future – a system that would be centred around the consumer.

The South Australian project, announced by AGL at the beginning of the month, will comprise a centrally controlled network of 1,000 residential and business battery storage systems with a combined total of 5MW capacity that will both store rooftop solar power and help manage grid stability in the state.

But Vesey said the utility was now actively seeking more locations well suited to the development of virtual power plants, as well as expressions of interest from consumers – and not necessarily AGL customers – interested in participating in them.

AGL-CEO-Andy-Vesey-Image-AGL
AGL Energy CEO Andy Vesey

“Anybody who’s potentially interested in participating in the future virtual power plant you can go to (AGL’s website) and register your information; say you’re interested.

“Why? Because as we build these things out we need to know where people who want to participate are, because where you put these plants are going to be important.”

For companies like AGL, the importance of VPPs lies mostly in their ability to “orchestrate all those batteries and rooftops” to the benefit of distribution business to defer capital investment. But as Vesey points out, there a multiple benefits for multiple parties.

“We can also orchestrate the delivery of that energy into the market to avoid the volatility that occurs. We can also, for the benefit of wholesalers like me have another risk management tool, because I now have a 5MW distributed peaking plant.

“And the consumer never knows the difference. They’ll always have the value of their solar rooftop, they’ll always have continuous energy, they won’t know whether they’re pulling on their batteries, whether their charging, or selling energy to the market… they’ll be absolutely blissfully not concerned because of the quality of the service and value that they will receive from it.”

Vesey said that South Australia had been chosen for the first demonstration of the technology for its unique position – not just in Australia but globally – of high renewables penetration, a rapidly shifting generation profile and volatile power prices.

“This will be the largest VPP in the world,” Vesey said. “Why? because the innovation will happen in this market first. Why? Because you have two of the key ingredients for innovation: you have very competitive energy markets and high energy prices.

“You don’t have that same combination anywhere in the world. So where should innovation occur? It will happen in this market first.”

And he said AGL had plans to extend the VPP model beyond the South Australian example to other, larger-scale applications.

“We would love to be able to – and we probably will, watch this space – do it in institutional buildings… as well, because they’re different. And we’re looking to do this on a manufacturing scale. We want to make sure we have the ability to deploy these all along the grid, where they have value.”

Vesey said that the power in the value chain in the electric industry had shifted to the consumer, and the sooner the incumbent industry “got this” the better off it would be.

“People say it’s innovative, but we know we had to do it,” he told the conference. “It starts and ends with the consumer, and the consumer will in time be the one that controls the entire system based on the decisions and consumption they mark on a daily basis.”

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17 Comments
  1. Daniel 3 years ago

    Great to see a proactive utility. This can be done throughout every level of societies organisation, as well as utilities. Load management can happen onsite, for example matching solar generation to onsite loads. It can involve one generator, many generators onsite or many generators throughout a distributed network. It can be a property, group of residences or an industrial precinct. So can we see some examples please? We don’t need big grandiose examples. Any examples of load management and smart software being implemented in our communities will be inspiring. If a case study works and it achieves a reasonable system payback, then it’s interesting. Some readers may be interested in different levels of scale and others may be interested in a specific sector – residential, agricultural, commercial, industrial, community infrastructure, town, city council, state or interconnected grids. I think readers will be interested in seeing a strategy that works and getting a financial winner for RE that they themselves are considering implementing.

    • kristian handberg 3 years ago

      BuildingIQ have a range of local success stories, and are notable as having originated locally before going global backed by corporate investors like Siemens.
      I’m sure there’s others, particularly facilities that are responding to network demand charges.

      • Daniel 3 years ago

        Sounds like the cutting edge of change. The local team leader solar installer around here is also looking at minimising demand charges in bigger installs and making systems responsive to the solar day. He has his bosses house setup to heat water, clean the pool and heat the cement slab during the solar day.

      • Daniel 3 years ago

        Perhaps your in a position to submit articles to RenewEconomy?

        • kristian handberg 3 years ago

          I have done previously, but time, fatigue and corporate constraints make it a bit tricky these days 😉

          • Daniel 3 years ago

            I don’t know if this is relevant to your work, though I think the local guy here is just using relay control outputs of an inverter/charger, to turn loads on and off hence sequence them consecutively around the solar day. He uses Selectronic. Inverter/chargers seem evolving to multiple relay outputs, AC and DC, and better software to manage them..
            http://download.selectronic.com.au/brochure/BR0008_05%20SP%20PRO%20GO%20Series%20Datasheet.pdf

          • kristian handberg 3 years ago

            I know someone who is doing a research project with Selectronic so I’ll join the dots – thanks for the heads-up

          • Daniel 3 years ago

            There’s tens of thousands of dollars involved. Its around optimising behind the meter, load matching with onsite generator/s, sizing batteries. The load matching can save needing a bigger battery as well as the inverter/charger having a preprogrammed limit on its external AC input. Bigger systems and multiple brands are beyond me though. Although that’s what this team leader does.

          • Daniel 3 years ago

            I’m an electronics technician retrained as a Social Worker though I did my own property and a recreational vehicle in PV/storage. I think this is really important, as it tunes the system payback, making the difference between a viable system and one which isn’t. Best wishes.

  2. Andy Saunders 3 years ago

    Is it just me who feels a bit queasy about this? The consumer is interested in minimising their imports/import cost, the utility is interested in minimising the peaks, and in not compensating the consumer very much. I can foresee situations where the utility gains a great deal, and the consumer loses out (without being compensated)…

    • Daniel 3 years ago

      Vesey would like to “orchestrate all those batteries and rooftops” …”because I now have a 5MW distributed peaking plant” however anyone can do this at any level of scale anywhere.

    • Interested Spectator 3 years ago

      I think you are spot on – its a good conceptual move – the devil will be in the detail – the retailer or provider that can do this and demonstrate how the benefits are shared between the provider (eg AGL), the consumer (who is in fact an investor) and others will be key. As “investors” consumers will want to see their return maximised or they will go with someone else – the business that tries to keep all the benefit to themselves will be quote “ripe for disruption”

      • Daniel 3 years ago

        If there’s time of use meters and time of use tariff charging, then the onsite inverter/charger could feed back power to the grid during the optimal tariff, and I think there is now inverter/charger brands with the software to do it. I think the software my inverter/charger is currently running only feeds back power when the batteries are full though better software could feed back power at the optimal time of day if it is available and suits.

  3. Daniel 3 years ago

    IMHO the need of networks to take control of our batteries is BS.

    Onsite inverter/chargers could for example, export during the evening peak and buy back during an overnight off-peak. Time of use metering and different export rates for peak and off peak rates from the grid would be needed though that’s all. Networks would argue they need to take control, however how much do their peak network loads really vary from day to day? Surely their need is simply dealing with a peak of summer air conditioning and the same in winter with heating. Is it really more complex than that. I can’t see a need for the complex level of management needed for networks to take control. The fact is PV/storage + wind reduce the peak power of their generators and the situation is constantly improving as more is installed. I think we’re being seduced into the idea of a smart grid exchanging power in milliseconds, when the battery is the storage which prevents this millisecond exchange by storing charge and delivering peaks – onsite and throughout networks if they install their own batteries. Both customer and grid can have their own batteries and hence be equal partners in any relationship – not one with utility level dominance.

    • solarguy 3 years ago

      Bravo Daniel, my understanding exactly. What they won’t like the public to know is that for any given battery, cycling it twice a day will halve it’s life, approx.!

      Yes they need to install their own batteries for peaks and critical peaks. And you can bet they won’t pay a decent amount for pilfering our batteries.

      Indeed lock the gate!

      • Daniel 3 years ago

        I think the article implicitly suggests the idea of a smart grid is a bit of a misnomer. It is just load shifting or matching distributed generators to the AC loads. Everyone is in the same boat with heating in winter and AC in summer, so I can’t see a way around the problem of accurately sizing PV/wind with storage. So to me a smart grid is a bit of a misnomer with false premises and expectations. Adequate RE + storage is the answer..

  4. Daniel 3 years ago

    AGL taking control of the software on our inverter/chargers will soon become like losing control of our mobile phones and all the bloatware on them. It’s really difficult maintaining control of my phones CPU and battery, so it does what I instruct it, not what third parties wish to use it for. When are we going to say no to corporate theft of our hardware’s resources been bit by bit eaten up? Our inverter/chargers are a computer and we need not have its software being controlled by external corporations. The idea of networks switching appliances on and off in our homes/businesses/factories is ridiculous!!! Who would own these corporations? Do we know? We need equal not subservient relationships. We need control the CPU in our inverter/charger! Be better if we had more control of the CPU in our phones as well.

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