Sunverge Energy, a provider of intelligent energy storage systems for residences and small businesses, announced it is partnering with Australia energy retailer AGL and the federal government's Australian Renewable Energy Agency (ARENA), to develop the world's largest Virtual Power Plant (VPP).
"This project is the world's largest, the first of its kind and an innovative solution to both help customers manage their energy bills and at the same time contribute to grid stability," said AGL Managing Director and CEO Andy Vesey. "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."
How a Virtual Power Plant Works
Using cloud-based software, the VPP directs energy storage units to operate in unison to meet peak energy demand across an entire community or service area, helping consumers utilize their own rooftop-generated solar or stored solar power during peak demand periods and reduce their power bills.
Energy storage systems not part of a VPP are unable to provide services to the grid or to benefit from the intelligent energy management provided by the grid. By contrast, when storage systems operate as part of a VPP the ultimate result is a stronger and more reliable power grid, more efficient energy management and greater value and long-term bill reductions for consumers.
The AGL virtual power plant will be capable of storing 7MWh of energy, with an output equivalent to a 5MWp solar plant, enough power for 1,000 homes. It will also provide greater grid stability, demonstrate alternative ways to manage peaks in demand and support the higher penetration of intermittent, renewable generation on the grid.
The project will be rolled out in three phases over a period of approximately 18 months. In the first phase, running until April 2017, the first 150 customers in metropolitan Adelaide will be eligible to purchase a discounted Sunverge SIS 5kW/7.7kWh energy storage system for AUS $3,500, which includes hardware, software and installation.
For customers with sufficient excess solar generation, this is expected to result in a seven-year payback period. Consumers currently without solar will be able to purchase a solar system of the appropriate size for their needs 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 is 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.
The overall project cost is approximately AUS $20 million, with ARENA providing conditional approval of $5 million as part of its Advancing Renewables Program, which aims to support the penetration of renewables on the grid.
"The AGL and ARENA Virtual Power Plant is remarkable today, but in five years' time large-scale VPPs will be everywhere," said Ken Munson, co-founder and CEO of Sunverge Energy. "By helping to build a stronger, more efficient and more reliable grid, VPPs deliver tremendous value to utilities, their customers and the environment."
Sunverge has deployed hundreds of Solar Integration Systems in Australia and New Zealand, reducing peak load 48 percent and providing more than 6,100 hours of backup power over the past 12 months. Sunverge and AGL have partnered on storage installations in Australia since 2015, and earlier this year AGL became an investor in Sunverge.