• Virtual Power Plant (VPP) Demonstrations

  • In this section

  • AEMO is collaborating with the Australian Renewable Energy Agency (ARENA), 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. 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.

    AEMO is establishing 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 aim to:

    • 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.

    Arena funding announcement April 2019

    AEMO has secured funding from the Australian Renewable Energy Agency (ARENA) for its Virtual Power Plant (VPP) demonstrations to advance the integration of Distributed Energy Resources (DERs) in Australia’s electricity network. AEMO's full media statement can be seen here.

    In November 2017 AEMO published a consultation paper to seek feedback on a proposed framework for the VPP Demonstrations.

    AEMO held two stakeholder webinars to facilitate further discussion on the consultation paper prior to a deadline for written submission. The details for these webinars, and the non-confidential written submissions received are below.  

    VPP Demonstations Webinar #1 on 4 December 2018

    VPP Demonstations Webinar #2 on 17 December 2018

    Submissions