AEMO virtual power plants
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The Australian Energy Market Operator (AEMO) has released a report on its Virtual Power Plant (VPP) Demonstration program, aiming to share its knowledge with industry.

The report shows that consumer devices, when aggregated and coordinated, can contribute to a secure electricity system and reward participating households.

In Australia, VPPs are typically focused on coordinating distributed energy resources (DER) like rooftop photovoltaic (PV) systems, battery storage and controllable load devices, such as air-conditioners or pool pumps, through the market.

Beginning in July 2019, AEMO’s VPP program was established to understand and share insights on the operational capability of VPPs, exploring the ability of aggregating DER to deliver services to the grid and unlock new value for consumers.

AEMO’s Executive General Manager, Emerging Markets and Services, Violette Mouchaileh, said: “Our report highlights how our first VPP participant, the SA VPP, performed during several events in the National Electricity Market (NEM).

“This included immediately charging and discharging batteries in response to frequency deviations following a contingency event to maintain stable NEM frequency levels, and responding to energy market signals by batteries pre-charging in anticipation of elevated prices and discharging during the elevated price event,” Ms Mouchaileh said.

“As a result of accessing aggregated and controllable DER through VPPs, the power system is supported by the provision of additional power when needed.”

To further understand the experience of residents participating in VPPs, AEMO, in partnership with the Australian Renewable Energy Agency (ARENA), is undertaking a customer insights survey to existing VPP Demonstration customers.

“The VPP Demonstrations represent an excellent opportunity to build understanding of how consumers experience being part of a VPP and to identify how future VPPs could improve consumers’ experiences of VPP participation,” Ms Mouchaileh said.

The consumer experience encapsulates the initial sales and marketing process, installation of equipment, operation in a VPP and  perceived/realised value delivered.

Lynne Gallagher, interim CEO of Energy Consumers Australia, said the VPP Trial was important because it would not only help answer technical questions about the new technology, but also how to make it work for people and how they use energy in their homes and businesses.

“Energy is deeply embedded in the way we live our lives, and bringing consumers into the innovation process is a critical part of developing successful new energy services,” Ms Gallagher said.

Moving forward, the VPP Demonstrations will continue to gain learnings regarding the effectiveness of VPPs adding value to the power system. AEMO will continue to monitor and analyse participants’ responses to events on the power system. 

The addition of other participants will enrich the current data set and allow for more analysis to be carried out and a deeper understanding to be gained.

In Australia by 2040, AEMO’s Draft 2020 Integrated System Plan forecasts that 63 per cent of coal-fired generation will retire, the equivalent annual electricity needs of all Australian homes and a proportion of businesses. 

Meanwhile, DER generation capacity is expected to double or even triple, with rooftop solar to provide 22 per cent of total energy, between 32GW and 50GW.

Further, AEMO estimates that embedded battery storage capacity, including VPPs, will total between 17GW and 30GW. What this shows is that Australia is a world leader in DERs, paving the way for VPPs to significantly contribute to Australia’s future energy system.

Read AEMO’s report on its Virtual Power Plant Demonstration program here.

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