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Scoping Australia’s virtual power plant potential

Posted on May 6th, 2019 in News

With an already large and rapidly growing number of distributed solar & battery systems, the role for virtual power plants (VPPs) on Australia’s National Electricity Market (NEM) could be enormous. The table below – from an article by SwitchDin – provides an overview of the potential for battery-based VPPs on the NEM. In a high growth scenario, VPPs could constitute up to 11 gigawatts (GW) of dispatchable household battery capacity – meeting as much as 25% of forecast maximum operational demand on the NEM.

But even a business as usual (BAU) growth scenario shows Australia hitting 3.4GW of battery-based VPP capacity by 2040 – enough to meet nearly 8% of maximum demand on the NEM. The opportunity will be larger with demand response management (e.g. curtailing use of air conditioners, pool pumps and other equipment) also incorporated into the VPP envelope.

SwitchDin notes, however, that VPPs can – and will – do more than ‘just’ wholesale energy trading; they will also be deployed to deliver crucial network support services to stabilise the grid on location and time-specific bases. While outside the scope of this article, this aspect of VPP function will have comparable importance to energy trading in the years and decades to come.

(Read SwitchDin’s full article here, or check out their VPP capacity estimator tool here.)