Generac Grid Services Blog

Postcard From the Future: VPPs in Australia

Posted by Peter Asmus on Sep 25, 2019 11:30:37 AM

Guest blogger Peter Asmus of Navigant Research writes about the evolution of the virtual power plant market in Australia. 

Australian consumers boast one of the highest per capita consumption rates of electricity in the world (even greater than the U.S.). These consumption levels translate into flexible load resources ideal for aggregation and optimization into virtual power plants (VPPs).

What is a VPP? Think of it as a conglomeration of many distributed energy resources (DERs -- loads, but also generation, batteries and electric vehicles -- that can be combined into a pool whose sum of parts’ value is far larger than these DER assets offer individually. With sophisticated artificial intelligence software, these resources scattered across the grid can be combined “virtually” to provide the same services as a traditional 24/7 power plant -- but at much lower and environmental cost.

Blackouts, skyrocketing retail power prices and sizable increases in renewable energy generation have created the “perfect storm” in Australia, requiring new answers to reliability, flexibility and cost challenges. In Australia, concepts such as prosumer-based VPPs that incorporate residential rooftop solar photovoltaics (PV) coupled with energy storage have been called into immediate commercial applications.

An outage in August 2018 underscored how new technologies that are fundamental to VPPs may be able to help prevent such blackouts in the future. In this case, twin lightning strikes and the sudden corresponding failure of two transmission lines posed a threat that could have again led to widespread outages. While communities in NSW and Victoria were indeed blacked out, and big consumers such as aluminum smelters and other industrials were cut off, the blackout never spread, thanks to renewable-rich regional grids supported by advanced battery technologies. Then an extreme heat wave in January 2019 led Australian Energy Market Operator (AEMO) to ask Alcoa Australia, the largest electricity customer in Victoria, to slash power consumption to keep the grid up and running, highlighting the value of demand response and other VPP-related grid services to maintaining grid reliability.

The key lesson learned? These blackouts, the impact of rooftop solar PV on network reliability, the decline in coal generation and rapid uptake in large scale wind and solar generation all underscored the need for AEMO to have greater visibility into the grid. This evolution in more granular control is now often referred to as distributed energy resource management systems (DERMS). AEMO views VPPs co-optimized through DERMS applications as having the potential to fill an emerging reliability gap in available resources that could impact approximately 66% of Australia’s population. Thanks to new software platforms, grid operators such as AEMO now have tools that can enable increased uptake of renewable energy while also maintaining a reliable grid network.

Another way to look at why Australia might lead global adoption of VPPs and DERMS is comparing it to other individual countries on the basis of decentralization. Australia emerges as the global leader in just a few years, and then maintains a major leadership role beyond 2030 (See Figure 1.1).


Figure 1‑1.    Decentralized Energy Ratio, Selected Global Country Markets

AGL Energy Limited is Australia’s largest utility and is moving forward with an VPP aggregating the rooftop solar PV and battery systems (from Tesla, SolarEdge and LG Chemical) of 1,000 households in Adelaide, South Australia. The VPP will rely upon Enbala’s ConcertoTM platform to orchestrate and optimize coordination of these DERs to maximize the overall benefits, across customer, wholesale markets (capacity and ancillary) and network service value streams. While not the largest VPP in terms of capacity or customer number in Australia, it could be considered the most sophisticated due to variety of vendor assets involved and grid services rendered. 

To read more about the growing VPP market in Australia and its potential impact on the global utility market, read the newest white paper from Navigant Research and Enbala.  

Read the paper

Topics: photovoltaic, Solar, DERs, DERMs, demand response, virtual power plant, flexible load, VPP, energy storage, Navigant Research, Enbala, Nuclear, PV, AGL Energy

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