Virtual Power Plants have been touted as the future of Australia’s grid. A grid with high penetration of distributed energy resources will inevitably need some coordination to stably operate. Electricity retailers have some ambitious targets for VPPs, which they appear to be relying upon to replace their coal generators when they close. But it seems early adopters of energy storage systems aren’t willing to hand back to retailers their expensively-purchased independence.
The size of the Australian market for energy storage systems is difficult to calculate. SunWiz has to piece together multiple data sources in order to figure it out. The size of the VPP market is even more difficult to establish. SunWiz investigation into the VPP market size drew upon interviews with manufacturers, VPP operators, AEMO, and combined it with other data-driven market research. The task is made more difficult by varying definitions of what a VPP is – as some batteries are remotely controlled for an individual’s benefit, but not necessarily orchestrated with other batteries.
Electricity retailers aren’t so concerned about definitions. Origin reported in early 2022 it had over 100,000 connected services in its ‘Loop’, which clearly can’t be all batteries when the cumulative national tally for home ESS was 140,000 installations at that time. Origin’s Annual Reports point to a 450MW in its Origin Loop, whereas AGL has 200MW of power ‘under orchestration’. We suspect this means this includes some C&I loads and residential deferrable loads. While this doesn’t meet the usual definition of a VPP, to manage supply-and-demand retailers need some flexible loads, even if they can’t produce power on demand like a battery.
The 2023 SunWiz Annual Australian Battery Market Report dives deeply into the VPP market, and concludes that 14% of Australia’s home energy storage systems are connected to a VPP. To obtain a copy, head to https://www.sunwiz.com.au/battery-market-report-australia-2023/