What Is the State of Virtual Power Plants in Australia?
This report was originally published by the insitute for energy economics and financial analysis (IEEFA) in March 2022.From Thin Margins to a Future of VPP-tailers
Executive Summary
A Virtual Power Plant (VPP) is the aggregation of supply and/or demand response from Distributed Energy Resources (DER) such as batteries and smart appliances to participate in one or more markets.
VPPs have been lauded as a major part of the future energy mix in the Australian National Electricity Market (NEM). When the Australian Energy Market Operator (AEMO) announced its VPP demonstrations project in 2019, AEMO predicted there could be 700MW of VPPs by 2022.
This potential is some way from being realised. By the end of the AEMO VPP demonstrations in 2021, there was just 31MW enrolled, constituting a 3% market share of contingency Frequency Control and Ancillary Services (FCAS, 28MW of this in South Australia). We estimate the total household VPP fleet in the NEM is perhaps 300MW currently (Origin states it has 205MW from over 100,000 connected services, the remainder is an estimate of the sum of other aggregators).
