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Australian Energy Market Operator opens virtual power plant integration trial

Providers including Sunverge, Sonnen and Tesla have already been involved in various scales of ongoing VPP projects, which AEMO is inviting into the demonstration as home solar and storage ownership grows.. Image: Sunverge.

The capabilities of virtual power plants (VPPs) to provide capacity as well as frequency regulation services to the grid in Australia will be demonstrated through a new integration trial.

The Australian Energy Market Operator (AEMO), is running the 12 to 18-month trial, with funding of AU$2.46 million (US$1.75 million) through the national renewables agency ARENA, the government said at the end of last week.

The country already has a number of VPPS in operation or in the process of being set up. Dozens of distributed energy resources (DERs), typically including home solar-plus-storage and energy storage systems at commercial and industrial premises that use batteries and are configured for bi-directional power flows to the grid, are connected together and their aggregated capabilities can be called on by utilities and grid operators as required.

These so-called behind-the-meter (i.e. located on the customer side of the utility meter) resources can be managed as one resource, in many ways playing the role of conventional, centralised power plants in stabilising grids and maintaining security, supply and quality of power. AEMO is going to invite Australia’s pilot-scale VPP projects to participate in the latest demonstrator, with the likes of Sonnen, Tesla and Sunverge among the international providers participating in such schemes.

Operating the distributed energy resources (DERs) in such a way will enable AEMO to inform how it creates appropriate regulation and operational processes, while ARENA’s funding will enable the market operator to “accelerate upgrades to AEMO’s systems and processes to allow smooth integration of VPPs before they reach commercial scale”, an ARENA release said.

'Vast improvements in reliability of the network and an increase in market competition'

AEMO chief Audrey Zibelman has extensive experience of running electricity markets in the US, having been Commissioner and Chair of the New York State Public Service Commission (NYPSC) and in that role was key in developing the state’s Reforming the Energy Vision (NY REV) policy and strategy. Zibelman, who joined AEMO in 2017, said the latest initiative could demonstrate the value of grid-integrating DERs.

“Australia’s energy landscape is transforming towards a deep penetration of consumer-level renewable generation and storage capability. Our focus is on the operation of the bidirectional system to increase system security and consumer value for both VPP participants and the power system as a whole,” Zibelman said.

AEMO believes there could be up to 700MWs of resources participating in VPPs by 2022 in Australia, from less than 10MW today. The National Electricity Market (NEM), a wholesale spot market that interconnects five regional jurisdictions of Australia and supplies around nine million customers, could be a good opportunity for VPPs too, ARENA CEO Darren Miller said.

“AEMO needs visibility over VPPs and the ability to test how they operate within the market if we want to maximise the benefit both to consumers and to the system. This trial will allow us to learn how to better integrate larger scale VPPs in the coming years. As we transition to a more decentralised energy system, VPPs have an important role to play in harnessing the collective potential of consumer-owned energy assets like rooftop solar, batteries, smart appliances and electric vehicle charging,” Miller said.

“VPPs could see vast improvements in the reliability of the network and an increase in market competition which will ultimately benefit all customers.”

Elsewhere, US home PV company Sunrun was recently contracted to provide 20MW of capacity from around 5,000 residential energy storage systems to the grid in New England, while commercial and industrial (C&I) storage provider Advanced Microgrid Solutions (AMS) recently revealed that it had provided 2GWh of grid services to California utility Southern California Edison in 2018 from its own fleet of C&I systems coordinated into a VPP.

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