SA social housing to become world’s biggest VPP

VPPs are fast proving their worth. The Australian Renewable Energy Agency (ARENA) is putting an $8.2 million grant to work to create what it is touting as the world’s biggest VPP. The project will see 3,000 Housing SA homes equipped with 5 kWp rooftop solar systems alongside 13.5 kWh Tesla Powerwall residential batteries.

Tesla Motors Australia is not only supplying the batteries but coordinating the project, including the installation of the rooftop PV. It is likely that Tesla will partner with one or more solar module suppliers, having abandoned plans to manufacture conventional PV panels in the United States in 2016 – instead developing its solar tile product.

The Tesla solar+storage systems will be provided to the Housing SA tenants at zero up-front cost. Each system, integrated into the VPP, is expected to supply 80% of each household’s electricity needs – saving them 22% on their power bills.

“This project represents a significant step towards a technology and commercial model for battery and solar that requires no upfront cost or risk to the customer. Another benefit of this approach is that it is open to households that otherwise wouldn’t have access to renewable energy options,” ARENA CEO Darren Miller said in a statement.

Alongside the ARENA grant, the Clean Energy Finance Corporation has allocated $30 million in finding towards the project. Tesla is chipping in $18 million in equity. The SA Government is providing $10 million from its Grid Scale Storage Fund.

CEFC CEO Ian Learmonth added in a statement: “The CEFC is proud to be investing in Australia’s largest VPP. We expect to see decentralised battery fleet systems become an increasingly important feature of the grid of the future, drawing on fast ramping services, voltage management and synthetic inertia.

“Tenants are often locked out of the clean energy market because they are unable to install rooftop solar systems on rental properties. The SA VPP is delivering an innovative clean energy solution to Housing SA tenants, drawing on proven and cost-effective technologies.”

The 3,000-home project is an expansion of two earlier phases of the SA VPP. The previous phase saw 1,100 solar+storage systems installed. ARENA has previously supported VPP schemes in SA executed by AGL and Simply Energy.

The Housing SA VPP is a part of Tesla’s ambition to create a massive 250 MW solar VPP across 50,000 homes. The Tesla SA VPP was launched in February 2018 by the former Weatherill Government during the election campaign. While the Labor Party led by Jay Weatherill was not returned by South Australians in the election, the VPP project was not abandoned.

VPPs can be an effective way to integrate high penetration levels of rooftop solar into the electrical distribution network. By orchestrating the operation of hundreds or even thousands of residential solar+storage systems the smooth operation of the grid can be supported, while the households themselves enjoy the cheaper energy provided by the rooftop solar. Revenue models for the VPPs themselves, in particular for the provision of grid services, are still emerging and the ARENA, CEFC and SA Government support will help to overcome the high upfront costs for the batteries for the Housing SA project.