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Virtual power plants - the next step in your solar journey?

A virtual power plant, or VPP, is a network of residential solar battery systems that work together to form a single power plant. VPP networks are a service offered by energy suppliers to harness the extra power and resources available from homeowners set up with solar panels plus solar battery storage. The virtual power plant is centrally controlled by the VPP provider using Wifi technology and software that analyses, manages, collects and distributes the available power as required. Many batteries such as the Tesla Powerwall 2 and Sungrow HV are capable of being connected to a VPP.

Benefits of joining a VPP

A homeowner signs up to a VPP program in return for incentives and payments for the use of their solar installation resources. For example, providers may offer an additional payment on top of your normal feed-in tariff and you may be offered discounted electricity rates. Exact benefits depend on the schemes being offered by the individual VPPs and can be seen in the table at this handy link by Solar Quotes. Choosing the right VPP for your solar and battery installation can reduce your solar investment payback period significantly.

Another advantage of being part of a virtual power plant is that the provider will be running sophisticated software to manage the virtual network. This means your personal solar installation will be fully optimised and continuously monitored so you can rest assured you’re getting the most from your investment.

VPP role in solving grid issues

There are two dilemmas posed by the widespread use of solar installations and the increasing use of solar batteries:

  • The first problem is the issue of over-voltage. A solar inverter has to be running at a higher voltage than the electricity grid to push power into the grid. However, at peak energy generation times the voltage of the grid rises because of the amount of power available and individual solar installs stop delivering power to the grid. For the homeowner, this means lost revenue during opportune times. As the number of solar installations in our communities grows this is becoming a more common issue.

  • Secondly, as more of the community becomes self-sufficient by installing solar batteries there is the temptation to leave the grid. But what happens when not enough people are paying to use the grid to support the maintenance and upkeep of this mammoth community resource? The grid will be a necessary infrastructure for society into the foreseeable future, but there are real concerns around how to keep it functioning.

Distributed energy resources like VPPs provide a solution to both issues and are helping to build a modern electricity grid that will support the growth of renewable electricity into the future. A virtual power plant network provides grid stability by enabling the distribution of excess power to homeowner batteries at rapid speed to lower the voltage of electricity in the grid during peak times. VPP’s are also being rolled out to operate in the FCAS (Frequency Controlled Ancillary Services) market, which provides assistance to the grid via frequency control of the batteries output.

Additionally, VPPs also mean that rather than becoming a society of isolated solar installations, homeowners stay connected to the grid and become part of the National Electricity Market. Sustainable power can then be generated, stored and distributed at optimal levels for the benefit of the whole community.

It’s been estimated that solar is on track to exceed total grid-wide electricity demand for significant periods of time as soon as 2025. That is, as a society we will be collecting more sustainable power than we use for certain periods of time. If we have a resource like VPPs to store this power for use later when demand is higher than supply … then we’ve made another step forward in reducing Australia’s electricity costs and greenhouse gas emissions.

Get in touch today to discuss battery options suitable for your solar installation that will make you eligible to join a virtual power plant in your area.