The world’s largest battery storage ‘virtual power plant’ (VPP) is set to land in South Australia, boosting grid stability, reducing power price volatility and supporting renewable energy.
AGL Energy Limited (AGL) has announced the launch of the plant, which will ultimately involve 1000 connected batteries installed in homes and businesses in South Australia. It will be capable of storing 7MWh of energy, with an output equivalent to a 5MW solar peaking plant.
The VPP works by using a cloud-connected intelligent control system that allows the batteries to be directed in unison. The vast majority of the time this will help consumers to self-consume their stored solar power during peak demand periods, benefiting both them and the broader community to manage peaks in electricity demand.
If the batteries are operated independently (outside of the connected system) they cannot be relied on to provide grid services. When working together at this scale, they can be used to provide grid stability services by discharging at a time that will be of greatest benefit for the customer and the community.
The Federal Government is partnering with AGL in the demonstration project via The Australian Renewable Energy Agency (ARENA) and leading US-based energy storage and management company, Sunverge.
AGL managing director and CEO Andy Vesey said the project will be the largest of its kind in the world.
“It offers consumers the opportunity to be part of the world’s largest virtual power plant, giving them greater ability to consume more of the energy generated from their own rooftop solar systems, lowering power bills, reducing emissions and purchasing a battery at a significant discount,” Mr Vesey said.
“We believe it will demonstrate alternative ways to manage peaks in energy demand, contributing to grid stability and supporting the higher penetration of intermittent, renewable generation on the grid.”
The project will cost approximately $20 million, with ARENA providing conditional approval of $5 million.
“This project is core to AGL’s strategy of being a manager of distributed energy resources. It also leverages our investment in Sunverge and helps us to continue to improve the digital customer experience,” Mr Vesey said.
South Australian Treasurer and Energy Minister Tom Koutsantonis has encouraged others in the private sector to also consider how dispatchable renewable energy technology can be used to deliver electricity around-the-clock.
ARENA CEO Ivor Frischknecht added the project could point to solutions to South Australia’s grid challenges and reduce the risk of power price shocks in the state.
“Australia is on the cusp of a battery storage revolution as technology costs continue to fall. ARENA is at the forefront of figuring out how batteries can best support renewable energy to provide affordable, reliable and sustainable power,” he said.
“ARENA expects virtual power plants to play a significant role in the future as more renewable energy is connected to our power networks. The approach can ease local network constraints in South Australia, displace gas power and complement the Victorian interconnector, especially during times of peak demand.”
The project will be rolled out in three phases over about 18 months. Customers participating in the project will be able to purchase a heavily discounted 5kW/7.7kWh energy storage system including hardware, software and install. In the first phase, running until April 2017, the first 150 customers based in metropolitan Adelaide will be able to purchase a Sunverge 5kW/7.7kWh energy storage system.
For customers with sufficient excess solar generation, this is expected to result in a seven year pay-back period. Consumers who don’t have solar already will be able to purchase an appropriately-sized solar system packaged with their battery.
Later phases will see an offering to narrower zones within metropolitan Adelaide where peak demand management and other network support services can be demonstrated.
It’s also hoped the project can demonstrate how relationships between electricity networks, retailers, consumers and the market operator can create new sources of value and stability in a renewable energy future.