The Victorian government is now supporting six different two-year Virtual Power Plant (VPP) pilots delivered through Solar Victoria as part of its Solar Homes program. It has approved five battery brands to participate in the six distinct VPPs which it says will give participants “guaranteed financial benefits and additional consumer protections not widely available in the general market.”
The government-backed program is capped at 2000 rebates with the state government saying households that sign up to the pilot prior to June 30, 2022 and install a battery will receive a rebate of $4,174.
The program’s five approved battery providers include Tesla, Mondo, Reposit, Sonnen and Arcstream.
These five brands have all “signed on” to the six approved pilot VPPs which the government says will offer different incentives, such as discounts on hardware, reduced energy bills or regular compensation for taking part. Some are available state-wide, while others are tailored to a specific region.
It is not clear however specifically what kinds of beefed up protections or financial returns each VPP stream will offer its participants, though this added security and returns is presumably part of the VPPs’ government-backed rather than purely commercial nature.
VPPs essentially aggregate fleets of residential batteries, combining their capacity so they are able to meaningfully trade on energy spot markets and the frequency control ancillary services (FCAS) market. In doing so, they open up new ways of earning money to households with batteries, above and beyond simply exporting on a set tariff.
VPPs are interesting for governments too though because they allow for communal use of residential home batteries, creating a solar sponge effect which means the grid is less congested during the day because aggregated batteries fleets can soak up surplus electricity and then feed that solar energy back into the neighbourhood grid in the evening when it’s needed.
Many have flagged that Australian households willing to invest in batteries are motivated by the promise of having greater energy independence – which would suggest they wouldn’t be too enthusiastic about signing their independence devices over to a third party. These hypothetical concerns seem to be far less of a problem in reality, with VPPs enjoying rapid uptake in Australia.
Purely commercial unsubsidised VPP programs already make economic sense in Australia, according to Simply Energy General Manager Ryan Wavish. Nonetheless, governments across the country continue to invest in VPP trials because of their potential to help the physics of electricity grids, says Andrew Mears, the founder of SwitchDin – one of Australia’s leading VPP technology providers.
Battery uptake in Victoria
The Victorian government says its Solar Victoria’s battery rebate program has supported more than 8000 Victorian households to install batteries. Nearly half (3914) of those approvals for battery installs came in the last half of 2021 alone, it said.
“Victorians have overwhelmingly embraced solar and now we are seeing people increasingly turning to batteries. VPPs are the evolution of this, designed to maximise the use of this clean energy, so everyone can benefit,” Solar Victoria CEO, Stan Krpan, said.
“The Virtual Power Plant pilot will connect Victorian households, so that they can create and share power, save money on energy bills and increase the resilience of the grid, together.”
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