Virtual power plants offer an opportunity for communities to harness the power of their own distributed energy resources to manage demand and bolster grid security.
Australia’s energy transformation is being driven in part by the growing adoption of distributed energy resources (DERs) such as solar panels, home batteries and electric vehicles (EVs). While these technologies offer clear environmental and financial benefits, they also present challenges in grid management.
Traditionally, electricity grids were designed for a one-way flow of power, with large, centralised power generation facilities supplying energy to consumers. However, as DERs increase, power generation is becoming more decentralised.
Homes, businesses, and even entire neighbourhoods can now generate and store their own electricity, often in the form of solar energy or wind power, and send it back to the grid.
This has led to a more dynamic and complex flow of energy, making it difficult for grid operators to predict and balance supply and demand effectively. As such, the shift towards renewable energy generation requires new solutions to ensure the grid remains both stable and reliable.
Project Edith
One such initiative is Project Edith – a pilot program led by Ausgrid, with EnergyAustralia as one of its partners. The pilot is exploring how dynamic network pricing and virtual power plants (VPPs) can improve grid stability by integrating customer energy resources into the electricity market. EnergyAustralia joined Project Edith in June 2024, bringing expertise from the perspective of an energy retailer.
Named after pioneering electrical engineer Edith Clarke, Project Edith aims to explore how customer-owned assets, including solar panels, batteries and EVs, can be integrated into the grid. The project also aims to address challenges such as grid capacity and customer participation, ultimately helping to create a more flexible, responsive, and customer-centric energy system.
At the heart of Project Edith is dynamic network pricing, which adjusts electricity prices in real time based on grid conditions. These prices vary depending on factors like demand, supply and local network congestion.
By aligning prices with grid conditions, dynamic pricing incentivises consumers to adjust their energy consumption. For example, customers might delay energy-intensive activities such as charging EVs or running large appliances when the grid is under strain. Alternatively, they might export excess energy from their solar panels or batteries during peak periods to help stabilise the grid.
VPPs are another integral part of Project Edith. A VPP is a network of distributed, flexible energy resources managed collectively to provide services to the grid. Resources such as solar panels, batteries and EVs can be used to balance supply and demand, stabilise grid frequency and provide backup energy when needed. As renewable energy sources become more common, VPPs can help manage their intermittency, reduce reliance on traditional power generation, and support a more sustainable grid.
Research and collaboration
EnergyAustralia is currently working to test how dynamic pricing can be integrated with customer energy resources, ensuring that it works effectively and exploring whether it can be scaled for widespread use.
This research phase is essential for refining the technology behind the pricing model and developing systems to optimise how VPPs can provide grid services. One of the most important objectives of this phase is to ensure that the system can handle the growing number of customer-owned energy assets and that the pricing model would be fair and effective for customers.
As a retailer in this project, EnergyAustralia is directly involved in ensuring the technical setup works smoothly between the retailer, distributor and other project participants. This includes participating in the technical trial to confirm that the necessary systems and infrastructure are in place to support the dynamic pricing model. Project partners are also developing and working to implement a standardised language and software system that ensures seamless communication between all parties involved.
EnergyAustralia is also customising its existing systems to accommodate dynamic pricing. This involves adapting current platforms that would enable real-time price signals to be delivered to customers in a way that is both clear and actionable.
Collaboration is a crucial element of Project Edith’s success. The project brings together a range of participants, including technology providers, energy retailers, and aggregators, to work on overcoming the technical challenges of integrating DERs into the grid. EnergyAustralia’s involvement has provided insights from the retail perspective, ensuring that the dynamic pricing model is customer-friendly, and that retailers’ systems are fully prepared for the challenges of integrating dynamic pricing into customer interactions.
One of the project’s innovations is location-specific pricing. This approach would tailor pricing based on the conditions of local networks, ensuring that customers receive accurate price signals that reflect the specific needs of their area. This method helps ensure fairness and improves the efficiency of the pricing model by reflecting real-time grid conditions. If the program is rolled out to customers, this could result in more transparent pricing and better incentives to help balance supply and demand during periods of high grid stress.
Future benefits
While the project is still in the research and technical development phase, the learnings from the partnership will provide valuable data that will inform future steps. It will also ensure that retailers like EnergyAustralia are well positioned to help customers take advantage of dynamic price signals and the DER-driven energy market. The aim is to create a flexible, customer-driven energy system, where participation is encouraged, and grid stability is supported through smart, real-time decisions made by customers.
As more customers adopt solar panels, batteries and EVs, it will be essential to develop systems that allow these resources to be efficiently managed while ensuring grid stability. Project Edith provides a valuable platform for testing these ideas and refining the technologies that will play a key role in the future of grid management.
EnergyAustralia’s existing offerings are already helping to integrate customer energy resources into the grid and make renewable energy more accessible, including an option for homeowners to install a solar system with zero upfront costs as part of a seven-year plan, or a BYO battery solution that allows customers to optimise their solar and battery systems. Additionally, community batteries give renters, apartment dwellers and those without home battery systems the opportunity to actively participate in the renewable energy transition.
Project Edith is an important step forward in addressing the challenges of an increasingly decentralised power grid. By exploring dynamic pricing and VPPs, the initiative aims to create a more adaptable, customer-focused energy system that improves grid stability and offers more control to consumers.
Looking ahead, Ausgrid is exploring an on-market trial in 2026 to expand dynamic network pricing to customers. As the project progresses, it will provide valuable insights into how these technologies can be scaled and implemented to benefit both customers and the grid.
