'Virtual' battery storage power plant to ease electricity price spikes
Mining & Resources
A 5MW battery storage ‘virtual power plant’ will be established in South Australia in a bid to stabilise volatile power prices and support renewable energy.
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The Australian Renewable Energy Agency (ARENA) has conditionally committed up to $5 million funding for energy company AGL to install 1000 centrally controlled batteries in South Australian homes and businesses with a combined 5 MW / 7 MWh storage capacity.
South Australia, which has high electricity prices, recently closed its last remaining coal-fired Northern Power Station in Port Augusta but is leading the world in renewable energy initiatives.
ARENA CEO Ivor Frischknecht joined AGL CEO Andy Vesey and South Australian Treasurer and Minister for Mineral Resources and Energy Tom Koutsantonis in the state’s capital Adelaide to launch the project.
Frischknecht said the $20 million project could point to solutions to South Australia’s grid challenges and reduce the risk of future power price shocks in the state.
He said small-scale batteries could work together to become more than “the sum of their parts”.
“AGL plans to operate the batteries as a kind of virtual power plant, installing them alongside solar PV and linking all 1000 systems with centralised monitoring and management software, Frischknecht said.
“The result is like adding a 5MW power station that can quickly deliver enough energy to power 1,000 South Australian homes where and when it’s needed most. This approach can ease local network constraints, displace gas power and complement the Victorian interconnector, especially during times of peak demand.
AGL has selected Sunverge batteries and control systems for phase one of the project. Sunverge received an ARENA-backed investment boost and its batteries are also being trialled in Queensland by Ergon Energy in another ARENA-supported project.
Mr Frischknecht said ARENA expected virtual power plants to play a significant role in the future as more renewable energy was connected to power networks.
“The approach also offers more value to customers, retailers and network companies from both the batteries and solar panels, making renewable energy more competitive,” he said.
“This project is set to be the largest demonstration of a virtual power plant in the country.
“Australia is on the cusp of a battery storage revolution as technology costs continue to fall,” he said.
South Australia leads the nation in the uptake of wind energy and roof-top solar with renewable sources accounting for more than 40 per cent of the electricity generated in the state. The State Government aims to extend this to 50 per cent by 2025.
Frischknecht said the project could provide evidence for regulatory change to enable more Australian virtual power plants.
“The knowledge would show a path to commercialisation and present lessons that regulators and other energy companies can learn from.”
AGL Managing Director and CEO Andy Vesey said the company hoped the project would demonstrate future options for Australia’s energy generation and supply mix.
“The energy landscape is rapidly changing and distributed energy services through projects like this, involving batteries, solar and the grid, can help customers manage their energy bills and provide grid stability,” he said.
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