What is a virtual power plant?

This is a sponsored article from SustainabilityTracker.com member GloBird Energy.

We at GloBird Energy are very pleased to announce that we have successfully run a proof-of-concept test for a Virtual Power Plant (VPP).

While we only tested the concept on a small scale, it gives us a solid starting point to go bigger and work toward a more sustainable, greener, more efficient, and cheaper energy system.

Before we step you through what we did, here’s a brief explanation of the concept.

What is a VPP?

A Virtual Power Plant (VPP) is created by connecting a number of premises – households and/or commercial properties – that have both a solar photovoltaic array and a solar battery.

The batteries are connected via cloud-based technology (hence ‘virtual’ as opposed to ‘actual’) that monitors the amount of available energy and manages the timely use of any excess.

Like a traditional (actual) power plant, a VPP has the capacity to supply energy to other households and businesses.

The software that monitors, coordinates, and aggregates the pool of excess energy allows the contributing home and business owners to ensure that they have enough of the energy they’ve collected for their own use and that all excess energy can then be effectively monetised,

Rather than them all doing it independently, they have a more ‘commercially viable’ model by collectively selling power back to the grid.

The pool of energy collected and aggregated by the VPP can be traded on the national energy market (NEM) at times of peak demand. Because these are also the peak daily price points, the VPP makes more money for the battery owners than they could have got as individuals.

Cheaper power and reliable green energy is the holy grail.

What we did

When we installed rooftop solar and a battery at the GloBird building in Ringwood, in suburban Melbourne, our original intention was simply to collect the solar energy during the day and use it later when the sun goes down.

As we’ve explained previously with our “free lunch” offer, it’s great to use solar energy in the middle of the day when there’s usually plenty of it, but the trade-off is that we pay more for our energy in the evening when solar is no longer pumping through the system.

Because the battery is connected to the grid and we can control the time it charges and discharges, we saw an opportunity to go a step further.

So, we established a small proof-of-concept test for a VPP.

How we did it

Together with a technology partner we trialled a system which allowed us to coordinate the storage of and distribution from a group of batteries.

When running at scale, the system can pool the energy from a large number of batteries, however, for this initial test we had three batteries choreographed in symphony,

An automated digital request was sent to the batteries with a command to discharge at an optimal time of day.

While the scale of this test is humble, it worked a treat, and the implications are significant.

It proves that it is possible for technology to help solve the duck curve, which represents the current mismatch between the times of greatest availability of solar energy and the times of greatest demand for energy.

We now want to build on this test to contribute to the movement toward a more sustainable, greener, and more positive energy system.

We’re seeing more and more VPPs around Australia

The concept of VPPs has been around for a few years now and has started to gain some momentum over the past year or two. However, it’s fair to say that VPPs are still in their infancy.

The first VPP project of significant scale ran in Adelaide from August 2016 to September 2019, with 1,000 household systems being installed and connected over that period.

There’s an apartment complex in Fremantle’s White Gum Valley which has installed software that allows its residents to trade solar energy in real time. That one is being replicated in some other similar buildings in the area.

Townsville has a VPP that includes a dozen large commercial suppliers (such as local zinc producer Sun Metals) giving it a capacity of 135 MW.

The South Australian Government has ambitious plans to create what would be the world’s largest VPP, a 250 MW/650 MWh system connecting 50,000 low-income households, which is underway with the support of Tesla.

And there are a number of other VPPs either in the planning or early implementation stages, while various state authorities and businesses continue to gather more information on the best way forward.

For example, Solar Victoria is running a VPP Pilot Program until 31 December 2024.

So, we’re confident that VPPs are part of our future energy equation … and GloBird Energy is ready to be part of that.

This is an article from a SustainabilityTracker.com Member. The views and opinions we express here don’t necessarily reflect our organisation.