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Australian energy company AGL has fully acquired South Australia’s Virtual Power Plant (SAVPP), from Tesla, which will provide the company with access to a network of residential solar and battery systems.
AGL has acquired the SAVPP, one of Australia’s largest VPPs, first established in 2018 with support from the SA Government and ARENA.
It is comprised of distributed solar capacity and about 7,000 Powerwall home batteries from Tesla, the users of which announced their intention to sell in September, 2024.
More batteries are expected to be installed this year as the company looks to develop the country’s largest social and community housing VPP.
The solar and battery assets will be coordinated to work together, and also used to help stabilise the electricity grid where required.
AGL says they will also explore ways to expand the benefits of the model to more energy users, including social and community housing residents across Australia.
Commenting in a release was AGL chief customer officer, Jo Egan: “SA social and community housing residents participating in this programme will continue to receive significantly discounted energy prices.
“This innovative model of a virtual power plant means we can extend the benefits of the energy transition to more customers, in a really smart and simple way.”
According to Egan, the deal follows on from the company’s existing community support to address cost of living pressures. Egan added that the VPP will help with the company’s FY27 target of 1.6GW of decentralised assets under orchestration.
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VPPs are connected groups of solar-powered batteries owned by households and small businesses. Connecting to a VPP allows them to generate revenue on an ongoing basis by selling the excess energy stored in their battery when demand on the grid is high.
VPPs also reduce demand on the electricity grid, which makes the state’s energy supply more stable and less prone to outages. This prevents price spikes and drives down the price of electricity.
AGL – which operates in numerous territories in Australia, including New South Wales – announced the acquisition a month following announcements from the state of VPP incentives and initiatives.
It’s time for utilities to evolve for the new energy customer says AGL’s Jo Egan
In June, the Minns and Albanese Labor Governments doubled the incentives available for NSW households and small businesses to instal a solar battery and connect it to a VPP by doubling the incentive for households and businesses to connect.
The increased VPP incentive will replace the NSW home battery installation incentive which has been doubled by the Commonwealth programme.
Then, one week later, the Minns Labor Government launched the state’s first large-scale VPP under the NSW Electricity Roadmap, which they say will help manage the reliable supply of electricity during peak periods to avoid blackouts and price spikes. This is the first of three that will be operated by Enel.
The VPP projects are among four projects underwritten by the NSW Government as part of the Roadmap’s first firming tender in their bid to connect more renewable energy.
The three VPPs will involve 21 businesses at 108 sites across Greater Sydney, Central Coast, Newcastle and Illawarra.
Major power users, including heavy industry, factories, retail, universities, data centres and food producers, will be orchestrated to use less energy at the same time, which has the same effect as bringing a physical power plant online.
When all three are operational by summer, they will have a combined capacity of 95MW of demand response.
