An innovative project in regional Victoria to design and trial a two-way energy market has shown that voluntarily coordinated consumer energy devices through virtual power plants (VPP) can provide electricity and other services to local networks, market participants and wholesale energy markets, helping support the grid and unlock greater value for all consumers.
Project EDGE is a collaboration between AEMO, Ausnet Services and Mondo, with support from the Australian Renewable Energy Agency, to demonstrate how to facilitate efficient and scalable trade of electricity services from coordinated distributed energy resources (DER), including small scale rooftop solar, batteries and controllable energy devices, such as hot water systems. Other participants in the trial include Rheem, Discover Energy and AGL.
More than 320 residential and commercial/industrial customers took part in an 11-month trial providing 3.5 megawatts of flexible capacity from over 400 DER devices that were coordinated in real-time by three different VPPs. The VPPs operated to customer preferences and shared the benefits with them directly.
The three-year project involved extensive technical research, market trials and consumer consultation, with key findings shared with industry and policy makers to develop pathways for distributed energy resources to improve electricity reliability, security and affordability for consumers.
AEMO Executive General Manager System Design, Violette Mouchaileh, said: “AEMO is a strong advocate for enabling small-scale energy resources to participate in energy markets and reward consumers for the flexibility services they provide.”
“Project EDGE highlights a way forward for coordinating distributed energy resources market participation at scale, which will contribute to improve electricity reliability, grid-security, and ultimately affordability.
“Importantly, the findings of the three-year project will be available for industry and policy makers to consider as we transition to net zero while building power systems that benefits all consumers,” she said.
The project successfully coordinated DER operations between all participants, demonstrating end-to-end technical feasibility of DER to accelerate the transition to net-zero while maintaining energy security and reliability. It also demonstrated that VPPs can provides services to local networks, in addition to AEMO wholesale markets.
ARENA CEO, Darren Miller, said: “We’re excited by the positive findings from Project EDGE. ARENA is always looking for new ways to evolve the electricity grid and maximise the value of DER to the benefit of consumers and the grid.”
“The study highlights the benefits of developing a marketplace for consumer assets and how integral these will be in Australia’s energy future.”
AusNet General Manager Network Strategy & Planning, Rod Jones, said: "The EDGE trial has given us the opportunity to see the potential of Consumer Energy Resources (CER) to unlock more value for our customers and strengthen our future energy network to accommodate more renewable energy.”
Mondo General Manager for Distributed Energy, Dhammika Adihetty, said: “One of the aims of Project EDGE was to demonstrate the full potential of solar and storage assets installed at customer premises.”
“This initiative has enabled us to demonstrate how businesses and individuals can reduce energy costs by joining a Virtual Power Plant while also playing a role in transforming the energy sector,” he said.
Independent Cost Benefit Analysis findings from Deloitte Access Economics, based on Project EDGE findings, show that greater coordination of active DER in the NEM will result in an incremental benefit of up to $5.15 - $6.04 billion over the next 20 years in reduced cost to all electricity consumers, and an additional societal benefit of $3 billion in emissions reductions.
Critical to the benefits, as shown through the consumer research, is that half of respondents were interested in joining a VPP, with almost a quarter extremely interested. Additionally, only a small number (3%) had extremely or somewhat negative opinions about VPPs.
This indicates that as DER increases and more consumers have access to clear information on the potential benefits of joining VPPs, positive opinions about VPPs may translate into interest in joining VPPs.
As part of Project EDGE, additional published reports on Customer Insights, DER Data Exchange and Dynamic Operating Envelopes are available on AEMO’s website. For further information, please get in touch the team at DERprogram@aemo.com.au.
ENDS