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How would a virtual power plant use my home battery?

How would a virtual power plant use my home battery?

If you’re interested in home battery storage, chances are you’ve come across the term ‘virtual power plant’.  That’s because in the last few years, virtual power plants have been cropping up all over Australia – and indeed the world.  

VPPs have captured news headlines as a revolutionary new way of generating and distributing renewable energy. They also capitalize on the increasing popularity of home battery storage systems across Australia. 

Now, with VPP credits as well as government battery rebates, the economics of home energy storage are stacking up.  If you’re keen to talk to a battery expert, get in touch. We’ve got a comprehensive range of leading battery brands to fit all budgets. 


What is a Virtual Power Plant?

A virtual power plant is like a power station but, instead of being situated in one location, a VPP is made up of thousands of home batteries, connected by software.  In return for participating in a virtual power plant, householders are rewarded with a premium solar feed-in tariff or bill credits. 

The purpose of a virtual power plant is to provide power to the electricity grid at times of peak demand – for instance, during a heatwave. By aggregating thousands of individual home batteries, renewable energy can instantly flow into the grid to provide more power when needed as well as smooth out voltage imbalances.  This provides greater grid stability and reduces the requirement for the network operators to upgrade grid infrastructure. 

Virtual power plants have tremendous potential to help Australia move to greater use of renewable energy within the electricity grid.  In a nutshell, VPPs harness the power generation capacity of millions of individual household solar power systems across Australia to provide a massive new source of clean energy.  

Right now, to be part of a virtual power plant you need to have your own solar battery, such as a Powerwall, AlphaESS or other quality battery that is accredited as VPP-ready.  If you haven’t got a battery and keen to find out more, get in touch with us for a free quote.

In time, industry experts expect that households with other forms of renewable energy storage – like an electric vehicle or electric hot water system – will also be able to participate in a VPP. 


How do batteries connect to a VPP?

The cool thing is that you don’t need any special software installed on your solar power system or your battery to connect to a virtual power plant.  All the VPP will require is the code from your battery (for example, with the Powerwall battery this is called the Gateway ID). 

Your virtual power plant provider uses this ID to connect your battery to their cloud-based software platform.  This software aggregates the data from thousands of individual batteries enabling the VPP to respond – in an instant – and provide power from those batteries to the grid.

Can any battery be part of a VPP?

No.  You must have an accredited VPP-ready battery if you want to join a virtual power plant.  

To be VPP-ready, your battery needs to do able to do three things:

  • Respond to remote requests to charge/discharge power 
  • Communicate the state of charge and voltage 
  • Help with network security and reliability 

Batteries need to meet the Australian Energy Market Operator’s (AEMO) minimum specifications.  They also need to be on the approved products list for the Clean Energy Council and relevant state bodies, such as the Solar Victoria’s Approved Product List.

If you’re wondering which batteries are VPP-ready, give us a call on 1300076527 or send us a message.  It’s a fast-changing area… you don’t want to choose the wrong battery and miss out. 


How often would a virtual power plant use my battery?

Each virtual power plant differs in terms of how often they might call on the power in your battery to support the grid.  Whilst there is no set ‘rule of thumb’, you can expect power from your battery to be used by the virtual power plant on average once or twice a week across the year – with a skew towards greater usage during heatwaves and extreme weather events.  

As an example, electricity retailer Simply Energy have a virtual power plant offering for households in South Australia, Victoria, NSW and Queensland.  In their documentation, they state there is no set answer as it “depends on how much the grid needs the support”.  They go on to say that in the last year they drew, on average, less energy from each battery “than is required to power your clothes dryer once a week for a year.”


Would I have enough power in my battery if there was a power outage? 

That depends on which virtual power plant you opt for.  If this is important, get in touch with us as we can advise on the virtual power plants in your state that guarantee to leave a reserve of power in your battery to tide you over in case there’s a blackout.  

Interestingly, some virtual power plants have no cap on the amount of power they will take from your battery. It is worth checking the fine print particularly if one of the reasons you bought a battery is to have guaranteed protection from outages. 


Does being part of a VPP shorten the life of my battery?

Some – but not all – virtual power plants retain the right to use as much power from your battery as they need.  If they are running your battery down to empty on a regular basis, this will shorten the life of most batteries. .It may even void the warranty.  

Giving a virtual power plant the right to use your battery without limitations could be recipe for disaster.  Get in touch with us if you’d like unbiased advice on which virtual power plant is going to treat your battery right. 


How do I get paid for the VPP’s use of my battery? 

There are two ways you are paid for letting a virtual power plant use your battery. 

  • A much higher solar feed-in tariff for the power drawn by the virtual power plant from your battery.  This is in addition to the normal solar feed-in tariff.  The VPP credit may be as high as 45 cents per kilowatt hour or more, whereas the average solar feed-in (for your everyday surplus solar power) is around 7 cents per kilowatt hour. 
  • An upfront discount on the cost of a battery – ranging from a few hundred dollars to several thousand dollars – depending on the virtual power plant.

Don’t forget, that in some states there are also battery rebates which can substantially reduce the upfront cost of home battery storage 


Summing up

Understanding the role your battery plays in a virtual power plant is useful when comparing the various VPP offers on the market.  It’s important to consider the impact of the VPP on your battery, particularly in terms of battery life and warranty. 

VPPs have the potential to provide an additional passive income stream, which can tip the balance in favour of home battery storage.  Uptake of VPPs is gathering pace, particularly in states where attractive VPP offers run in parallel with generous state government battery rebates. 

There’s a lot to consider when it comes to batteries and virtual power plants. At SolarRun, we’re here to help you find the best battery storage system and – if you choose – a virtual power plant offer that rewards you properly for helping make our national grid 100% renewable. 

If you’d like advice on battery storage and VPPs, get in touch for a free consultation.  

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