Virtual power plants (VPP) are in the competition watchdog’s scope to ensure the runaway success of the federal battery rebate doesn’t lock consumers into unfair aggregation contracts.
Concerns include households being locked into VPPs based on physical infrastructure, a situation the Australia Competition and Consumer Commission (ACCC) is still fighting in relation to payment systems on mobile phones.
“We would be concerned to hear that everyone in [an electricity] distributor’s area would only be able to be offered a VPP from that distributor. So the distributor was bundling the distribution service with that service,” ACCC chair Gina Cass-Gottleib told Renew Economy on Thursday, on the sidelines of the Carbon Market Institute conference.
She compared the situation to another of the ACCC’s bugbears, where contactless payments on iPhones and Google phones in Australia can only be made through the companies’ proprietary wallets.
In the case of energy, she suggested that European-style rules may need to be introduced if competition among VPPs begins to reduce as big players concentrate their market share.
The EU’s 2022 Digital Markets Act forced Apple and Google to provide app developers with fair access to smartphone functionalities, including the NFC chips that allows contactless payments. This means a payment can be made via a bank’s wallet as well as the phone company’s.
Other obligations include not self preferencing a company’s own products against competitors’ products, and not withholding technology upgrades to products a consumer brought with them rather than bought through a VPP bundle.
On a positive note however, Cass-Gottlieb also says there is more competition in VPPs than in electricity distribution, which she says is already mitigating the first concern.
SolarQuotes lists 14 VPP operators around the country in July, with a range of terms from the Tesla/Energy Locals offer which only works with Tesla batteries, to Amber which offers access to wholesale energy market pricing and individual control. Engie requires households to use it as a retailer but pays a fee for service to participants.
The other worry for the ACCC is price and terms transparency around bundling.
VPP solar-battery bundles already exist for households in Australia, with Reposit already operating an offer and a collaboration between Alinta Energy and consumer renewables specialist National Renewable Network announced last week.
Cass-Gottlieb’s concern is that consumers know what they’re buying into.
“They may very well offer a bundle and a bundled price. What we want to see is that there can be a competing offer,” she says.
“It will compete on price. It may compete on other terms and services, but we are hoping that we see genuine competition here.”
The risk of the ACCC not keeping an eye on unfair VPP terms is that Australians with home energy resources are burned by the experience and leave aggregators for good, or refuse to buy into the concept to start with.
With even the energy market operator now saying consumer energy resources are critical to shifting the grid to 80 per cent renewables, disaffected homeowners who refuse to join VPPs would be a disaster for that outcome.
VPPs already have a trust problem, as One Step Off The Grid has reported on frequently, as schemes designed to favour the operator rather than the consumer leave a bad taste in Australians’ mouths.
