• Virtual Power Plant (VPP) Demonstrations

  • In this section

  • AEMO is collaborating with the Australian Energy Market Commission (AEMC), the Australian Energy Regulator (AER), and members of the Distributed Energy Integration Program (DEIP), to establish the VPP Demonstrations.

    These demonstrations are the first step in a broad program of work designed to inform changes to regulatory frameworks and operational processes so Distributed Energy Resources (DER) can be effectively integrated into the National Electricity Market (NEM), maximising value to consumers while also supporting power system security.

    A Virtual Power Plant (VPP) broadly refers to an aggregation of resources, coordinated using software and communications technology to deliver services that have traditionally been performed by a conventional power plant. In Australia, grid-connected VPPs are focused on coordinating rooftop PV and battery storage.

    VPPs can deliver multiple services to increase the potential ‘value stack’ delivered to consumers, including by participating in markets for both energy and Frequency Control Ancillary Services (FCAS), as well as entering into network support agreements with network service providers (NSPs). Currently, VPP value stacking in the NEM is in the very early stages of development and there are no VPPs delivering FCAS.

    Effective integration of VPPs, providing AEMO with operational visibility, can also help AEMO maintain power system reliability and security. AEMO currently has no visibility of how VPPs operate, however as VPPs reach greater scale in the NEM, continued lack of operational visibility could present system security risks, as VPPs can move from charge to discharge instantaneously.

    AEMO intends to establish a framework to allow VPPs to demonstrate their capability to deliver services in energy and FCAS markets. By trialling VPP operations while their aggregated fleets remain of a small scale (less than 5-10 MW per VPP operator), the VPP Demonstrations aim to inform the effective integration of VPPs into the NEM as they reach a larger scale.

    The VPP Demonstrations will:

    • Allow VPPs to demonstrate their capability to deliver the full value stack.
    • Provide AEMO with operational visibility to help AEMO consider how to integrate VPPs effectively into the NEM.
    • Allow the AEMC and AEMO to make informed changes to the regulatory frameworks, systems and processes required to facilitate the smooth integration of VPPs as they ramp up in size.

    AEMO is committed to delivering the VPP Demonstrations in collaboration with industry stakeholders. The value of this collective learning exercise increases as more VPPs participate.  

    VPP Demonstations Webinar #1 on 4 December 2018

    VPP Demonstations Webinar #2 on 17 December 2018

    Submissions