Australian Energy Market Operator Invites Consumers to Participate in Virtual Power Plant

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Sophie Vorrath of One Step Off the Grid describes a virtual power plant program designed to unlock new value for Australian consumers who have invested in distributed energy technology.

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By Federico Rostagno/Shutterstock.com

Plans to harness consumer distributed energy resources and trial using them in service to the greater grid have gained ground last week, with the Australian Energy Market Operator opening registrations to participate in its virtual power plant demonstration program.

The program, which won $2.46 million in funding from the Australian Renewable Energy Agency in April, will test the potential for resources like rooftop solar and battery storage to provide scalable energy and network services traditionally the preserve of big power generators.

The trial is also part of a broader effort to unlock new value for Australian consumers that have invested in distributed energy technology, including an estimated two million rooftop solar households, while also creating a more efficient and affordable power system.

“As the independent energy system and market operator, we believe DER growth can empower consumers to contribute scalable value to our future energy system by joining virtual power plants that actively participate in Australia’s electricity markets,” said AEMO’s head of emerging markets and services, Violette Mouchaileh, on Wednesday.

“Registrations are open, and we encourage VPPs to register to accelerate the shared learning on how to safely and efficiently integrate, operate and regulate these emerging technologies into the NEM.”

ARENA, which has backed a number of virtual power plant trials around the country, says it also sees VPPs as playing a key role in future grid efficiency and stability.

“More than two million Australia households have already taken up rooftop solar, and tens of thousands are adding home batteries, so it is going to be increasingly important to have the ability to coordinate and control these distributed assets – as well as other distributed assets such as smart appliances, solar hot water systems, pool pumps and electric vehicles,” said ARENA CEO Darren Miller.

“This trial is a crucial first step towards that,” he added.

“ARENA has played a role in funding some of South Australia’s largest VPP trials with AGL and Simply Energy and has supported Greensync’s deX platform. We look forward to seeing the end results of the applicants in the AEMO VPP integration trial.”

Just last week RenewEconomy reported that the second stage of South Australia’s Tesla-inspired virtual power plant was over-subscribed, and the government looking at the design of a 250 MW third stage.

State energy minister Dan van Holst Pellekaan said more than 1,100 households had signed up to the program, which delivers rooftop solar and a Tesla Powerwall 2 battery to mostly low income households, delivering a 20% cut in electricity prices for those who need it most.

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The call for registrations in the AEMO VPP trial also builds on collaboration between the market operator, the Australian Energy Market Commission (AEMC), the Australian Energy Regulator (AER) and industry members to establish the framework to support these VPP demonstrations.

This includes new draft AEMC rules to allow demand response to enter the wholesale electricity market.

The AEMC in July released draft proposals that would allow major energy users – like smelters and refineries – to be paid more easily for reducing demand on the power system.

As Giles Parkinson reported, market reform on DR is regarded as equally significant to the recent decision to switch the settlement periods from 30 minutes to 5 minutes, another rule change designed to address market rorts by the incumbent generation fleet and to encourage technologies such as DR and battery storage.

This blog originated on One Step Off the Grid and was reposted with permission. Author Sophie Vorrath is the pubication’s deputy editor. 

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