Virtual Power Plants - A Breakdown
The cloud-based technology aims to stabilise the grid with solar battery power.
Imagine an Australia where homes across your state form a unified, grid-supporting network using renewable energy from solar battery systems. This is the vision Virtual Power Plants, shortened as VPPs, have. It may sound a bit abstract, but we'll break down exactly what it is, how it is relevant to home and battery owners, and whether we think it's worth joining.
What is a VPP?
A VPP is a technology that aggregates independent household solar and battery systems to create a unified network that acts as a clean energy virtual power plant. The idea is to form a community-supplied, decentralised power network that supports and stabilises the electricity grid.
Australia is a global leader in rooftop solar, with a nationwide solar capacity of over 25GW. Solar batteries are beginning to increase in popularity and with over 100,000 battery storage systems installed across Australia, we are storing a collective total of 2.7GWh of solar power. Currently, most of this solar and battery-stored power is for independent use, with homeowners accessing their solar for its benefits when it suits them.
Solar and battery systems are especially beneficial during power outages - when the grid fails, excess solar that has been stored throughout the day can be accessed to power homes even through blackouts. In weather-extreme Australia, a system that provides energy independence for homes plays a large factor in the decision for solar and battery integration.
The increase in rooftop solar and home batteries provides an opportunity to change the game in mass-energy supply and support. VPP companies invite homeowners with a solar battery system to join their plans to grant access to the homeowner's stored solar when necessary. This entails sharing your stored solar if the grid were to fail - for example, if a blackout occurred, the VPP would engage its network and inject solar energy back to the grid to stabilise disturbances and support it until it was fully operational again. Some VPPs operate differently, but often you can set a limit on how much stored energy they can access, so you can ensure that there is always a certain percentage retained in the battery for your personal use and peace of mind.
The ultimate goal of VPPs is to mainstream and control large-scale solar energy, which would reduce our dependence on coal power and in effect make energy renewable and affordable.
Why would anyone want to join?
So you may be wondering, why should I give up a percentage of my stored solar power to benefit the electrical grid? Great question. There are a few reasons why it may be worth considering...
VPPs often have financial incentives for homeowners looking to sign up. Some offer a cashback or credit toward energy bills, and others provide direct payments. Financial rewards are usually dependent upon how many batteries you have or how large your battery capacity is - basically, the more you have to offer, the greater the reward.
They also often incentivise the installation of new batteries, for homeowners who have solar but no battery system connected or for those looking to increase their existing capacity. Power bill credits are usually higher when homeowners install a new battery with a certified partner installer.
Another plus is knowing that you are supporting both your community and benefiting the environment. As more homeowners sign up and solar begins to play a major role in mass-energy supply, the grid is less likely to falter at the benefit of the entire community, rather than just individual households. This will in turn also begin to drive down energy prices as renewables supplement conventional electricity and demand decreases, reducing everyone's power bill.
Apart from the financial and community benefits, those who join VPPs are also helping drive Australia's transition to renewable energy. With community-provided renewables, VPPs are enabling large-scale efforts to reduce emissions and coal-powered resources, as opposed to smaller-impact individual actions. That's not to say that a singular household doesn't make any difference (individual action is also community action), but the power of a decentralised community network would see a swift and measurable benefit for the reduction of carbon emissions.
What does it mean for me and my home if my battery is being accessed by the VPP?
When you sign up for a VPP, you are allowing the company access to your home battery and you grant authorisation to withdraw stored solar power. This does mean that you are permitting the VPP access to your supply of solar power that you would have accumulated over the day with your solar system and is likely the power you would use at night or during blackout events.
As mentioned before, there are options to set limits on how much the VPP must retain in your battery for your personal use. For example, if it is set to retain 20% of power in your battery, that should provide about 1.5-2 hours' worth of energy for your home in the event of a power outage. Unless you have disconnected from the grid entirely, or if there is a lengthy power outage, you likely wouldn't notice that the VPP has withdrawn solar from your battery.
Some VPP plans also set a maximum limit on the number of times they can access your battery within a year - this offers peace of mind to know that your system isn't being abused or constantly being drained.
In the end, signing up for a VPP does mean that sometimes there will be less stored solar for your personal use from your battery.
Has this been successful anywhere?
A great example of an effective VPP was in 2019 when a Queensland coal unit unexpectedly caused an enormous power outage after tripping offline. The outage provoked a downward spike in QLD's power supply by 748MW.
Impressively, the South Australian Tesla VPP that was only 1,000 homes strong in late 2019, "detected the frequency drop and immediately injected power into the grid from hundreds of individual residential batteries installed on SA Housing Trust properties across the state", according to the South Australian government.
The South Australian Tesla VPP stabilised Queensland's electric grid and supported it until it was back up and running at regular capacity, meaning Queensland homes and businesses wouldn't have even noticed. When this occurred in 2019, only 1,000 out of the 50,000 home goal had been completed, and it still made a huge positive impact within a state it wasn't even based in. We think that's pretty neat!
Is it worth it?
Ultimately, the question of whether joining a VPP is worth it comes down to your values and goals. If you installed a home battery and solar system because you experience frequent blackouts and need self-sourced power, maybe a VPP wouldn't align with your energy goals. If you like the idea of saving even more on your power bills while simultaneously benefiting the community for the long term, then perhaps a VPP could be up your ally.
Ask yourself the following questions: why did I install a solar and battery system? Would I be discontent with losing some self-sourced solar? How much do I rely on the battery? Do the financial, environmental, and societal benefits outweigh the reduced energy independence?
Depending on your answers, we think you'll discover whether joining a VPP is right for you and your home. We recommend doing your research to find out more about VPP plans in your area and which one aligns best with your goals. Have more questions though? Our friendly solar experts would be happy to have a chat. Use our contact form below to have one of our team get in touch.
Want to find out more about the benefits of home solar batteries? Read here.
Or click here to learn whether installing a battery to your existing solar system is right for you.
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