Groundbreaking trial shows how VPPs can pay for home batteries, slash costs on the grid

Network company Western Power says virtual power plants have “huge potential” to solve some of the grid’s thorniest problems, including doing away with the emergency solar switch-off button, and could remove the need for subsidies by helping batteries pay for themselves.

The observations have been gleaned from Western Australia’s Project Symphony – a unique two-year trial launched back in 2021 to demonstrate how virtual power plants, or VPPs, can support power systems and reward customers.

A collaboration between Synergy, Western Power, and the Australian Energy Market Operator with support and oversight from Energy Policy WA, the pilot was centred in the Perth region of Southern River, where more than 50% of households have rooftop solar.

Overall, 514 customers and 911 assets were recruited to the trial across four main asset types – solar PV, battery storage, air conditioning and hot water systems.

Technically speaking, the trial aimed to test the use of a VPP in four “must-have” scenarios: The supply of energy into the wholesale market; the provision of network support services; the ability to constrain rooftop solar output to zero, and; contingency raise, which is a response to help restore a deviation in frequency to normal levels.

The findings of the project, which received $8 million through the Australian Renewable Energy Agency’s Advancing Renewables Program, were published by Arena earlier this month in a more than 180-page report.

According to the report, the trial found VPPs to be technically feasible in all four scenarios, with some more immediately successful than others – and all with kinks that need to be ironed out for VPPs to be operated successfully at scale.

More broadly, the report confirms what we already know, if only conceptually: That orchestrating DER can substantially reduce system costs and help alleviate local network constraints, ultimately allowing reduced costs to be passed through to end-use customers.

In a statement from the WA government released alongside the report, it claims there is around $920 million in value that could be created through orchestration of home solar and batteries and other energy assets on its grid.

But in the “invaluable” category, Project Symphony has delivered 18 recommendations relating directly to the lessons learned, particularly around the further work required to develop the right mix of technical and commercial settings to enable VPPs to be developed in real-world settings.

The report has also underscored just how important home batteries will be for VPPs to access multiple revenue streams from the market and non-market services, in contrast to other DER assets.

Next to the batteries, the most important thing is the consumers – and getting them on board.

On both counts, Western Power’s Matthew Cheney says “relentlessly pursuing value for customer” will be essential to success.

“Sometimes it becomes rhetoric, but it’s actually crucial,” Cheney – who is Western Power’s executive manager of energy transition and sustainability – told the Australian Energy Week conference in Melbourne last week.

“Think about the EV example – if we aren’t thinking about how do we provide value for the customer then the customer might just take that vehicle-to-load or vehicle-to-grid capability and and just choose to supply themselves.

“If there’s not a value stream beyond their own use, then we might find that we don’t get the most out of those assets.”

And while Project Symphony did use rebates (around 40-50% off the cost of a home battery) to help drive participation in its trial, Cheney doesn’t think government subsidies are necessary if VPPs are done right.

“I’ve heard a lot about government battery incentives… and I think it’s acknowledged and accepted that some of those are going to be required in order to kickstart [uptake] – we certainly saw the value in the program to have that sort of incentivisation,” he told the conference.

“When we successfully provide a value stream to customers that’s ongoing – not just an upfront sugar hit offsetting the cost of the asset in the first place, but … an ongoing revenue stream for customers to either keep them engaged or at least …offset their costs – I think that’s where the real opportunity is.

“The the aim here, ultimately in the long term, is that there is not a need for the sort of upfront subsidies but, actually, these batteries pay for themselves because of participation in a virtual power plant.”

Cheney says one of the best examples of where that value might come was demonstrated in a continuation of Symphony’s platform – after the official trial was concluded, but Western Power renewed or extended some customer contracts and operated a smaller VPP through the summer period.

“A lot of the testing for Symphony was actually around the middle of last year [so it]…missed the summer period where you really see the network support service benefits,” he told the conference.

Cheney shared a chart (below) from the week leading up to the final peak demand record in February, where a pared back VPP shaved nearly a megawatt off the daily demand peak by operating daily within 90% of the the network support service contract requirements.

“We saw that megawatt shaved off the the whole [20-25MW] feeder and this was just with 150 battery assets and some air conditioners,” he told the conference.

“Imagine this on a scale beyond that. I think the potential is huge and we will certainly be pursuing subsequent stages to establish this on scale.

“And if we don’t do well in integrating these sorts of capabilities into the into the network, the downside is equally detrimental.”

At the other end of the scale, another easy sell to consumers on VPPs might be their potential to dial back rooftop solar output, remotely, to avoid larges swathes of solar systems being switched off arbitrarily in cases of emergency.

This is – as the report notes – a particularly important role that coordinated DER can play, considering the “belly of the duck curve” – or the operational demand low caused by large amounts of rooftop solar being exported to the WA grid “approaching unstable operating levels.”

Currently, WA – like South Australia – has an Emergency Solar Management (ESM) Scheme – essentially a big centralised switch-off button – at the ready to use if excess solar output sends demand dangerously low.

Cheney says constrain to zero is about, “can we create a market mechanism rather than emergency mechanism to dial back solar when we’re experiencing one of those system low periods in order to achieve stability in the in the grid?”

The Constrain to Zero scenario was tested in Project Symphony with some success, with compliance consistently between 86% to 98%, according to the report.

The report says the ability to constrain rooftop solar to zero output through a VPP could – with the right equipment and smarts – replace the emergency solar button with an “opt-in, pre-emergency service” that stabilises the grid while offering customers a financial benefit.

Cheney says partnerships were also a real success factor of the Symphony program – although he notes this could be as result of the market set-up in WA, with one retailer and one network operator – both government owned.

“The partnership approach needs to be genuine. We need to deliver on what we’re accountable for delivering, understand our roles and make room for others to do their part – and find ways to support their success rather than compete.

“A transmission-only transition is going to be more costly. And so when we think about integrated planning, whether that’s the ISP on the east coast or the whole system plan in WA, we really do need to include distribution,” he said.

“Not just as an input, but actually plan it as part of the overall system plan alongside connected assets. I think if we do that, we will absolutely have a far better chance of delivering the outcome and also delivering it at a lower cost.”