AGL’s new virtual power plant to cover four states

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AGL has unveiled a new residential battery program, a backbone of a virtual power plant that will spread across four states – Victoria, South Australia, New South Wales and Queensland. Australia’s biggest utility will launch the offer in July.

The VPP will aim to offer a 12-month contract for customers who are AGL electricity customers with an eligible battery installed. By joining the program and providing VPP services at times when the energy system needs it, customers will be able to earn an additional $280 in the first year to put towards their electricity bill, comprising a one-off $100 sign-on bonus and $45 each quarter.

On top of this, AGL will also be introducing a customer offer for sale and installation of residential batteries, beginning in South Australia, offering an upfront payment of $1,000 towards the cost of their battery for participating in the VPP program for five years. AGL notes that further details and full terms and conditions will be available shortly.

“Right now, generally customers can only use their solar systems to meet their own energy needs and sell any surplus back into the grid,” AGL CEO Brett Redman said during a speech at Australian Energy Week. “The AGL Virtual Power Plant unlocks new benefits for customers, a partnership that allows customers to provide services to AGL to support the grid at times when energy is needed.”

With almost 25% of standalone homes, around 1.7 million in total, powered by solar, the Australian Energy Market Operator estimates Australia will see 150,000 residential battery systems installed by 2025. As customer needs and state subsidies evolve, AGL says it is looking to expand offers of battery sale and install to other states.

Previously, AGL started building a 5 MW/12 MWh VPP in Adelaide in 2016 and brought it online in 2017, with the help of $5 million in funding from ARENA. The VPP is using Tesla Powerwall 2 batteries and the LG Chem RESU 10h-SolarEdge combination.

As they represent an additional revenue stream leveraging a system that already has a sunk cost, VPPs are appealing to a wide range of stakeholders, including utilities, energy suppliers, and solar+storage system owners. In Australia, big utilities have shown strong interest in orchestrating distributed energy resources into VPPs.

Aside from AGL, Origin Energy is looking to connect solar and battery systems of up to 650 residential and commercial properties across the state into a 5 MW VPP in Victoria, while Simply Energy is building a 8 MW VPP in Adelaide and another one in South Australia in the first such initiative since the launch of the South Australia Home Battery Scheme.