Electricity retailer Nectr is offering a “never before seen” feed-in tariff of 50c/kWh for energy sent to the grid between the hours of 4pm and 9pm, but only for customers who sign up to its new virtual power plant.
The deal, which also dangles a one-off $100 sign-up credit, marks the third VPP offering from Nectr – a subsidiary the South Korean-based, multi-billion-dollar solar and battery maker Hanwha Group.
Hanwha rather dramatically pulled its QCells solar and batteriy business out of Australia in February of this year, citing the “extreme market competition” driven by record-breaking panel price drops.
Nectr, however, is powering on in the Australian retail market, with around 35,000 customers across five National Electricity Market states and territories: South Australia, Victoria, ACT, New South Wales and Queensland.
Nectr says the aim of the new BEE Super FiT VPP is to “take the hassle out of energy sharing,” with the retailer using its smart energy algorithms to manage the export or dispatch of energy from a compatible solar and battery system.
According to the fine print, this means handing over most (if not all) of the control over the battery to Nectr, which is kind of the whole idea of VPPs, but not always an easy sell to customers who have invested in solar and storage to regain control over their power supply.
“Nectr will participate in VPP markets and dispatch energy from a customer’s battery to the grid, as per the terms and conditions of the plan,” a footnote on the release says.
“This may limit the customer’s ability to change/control battery operations.” (Although the website notes that for batteries with back-up capabilities, it will always ensure there is a 20% reserve charge to use in case of power outages.)
This might sound like a leap of faith to some, but Nectr managing director, Tae Hong Kim, says this is the VPP plan that customers have been calling for – “and we have listened.”
“As home battery uptake continues to grow in Australia, we’re bringing innovative and industry-first deals to Australian customers to help them save money and have the peace of mind that their unused energy is never wasted,” Tae Hong Kim says.
“While VPP technologies are relatively new in Australia, homeowners across the country are laying strong foundations for a successful transition to renewables by investing in home solar and battery and joining a VPP plan to help share energy when it is needed most.”
No doubt, the offer of the 50c/kWh feed-in tariff – by far the most generous solar FiT that One Step Off The Grid can find among other retailers in the same states – aims to help build faith with customers.
But as One Step Off The Grid has explained in the past, highest is not always best. In this case it should be noted that Nectr’s market leading FiT is only on offer for five hours of each day, and at a time that may not suit the load profiles of some households. The prices offered for electricity supply should also be weighed up.
To this end, Nectr has also launched a “Savings Estimator” for solar and battery owners, on the Nectr website, that totes up the potential savings of participating in the VPP, according to the specific energy consumption and system details of each solar and battery owner.
“The BEE Super FiT is groundbreaking, and it’s something that we have designed specifically for our Aussie customers, because it demystifies earnings potential of individual battery owners by joining a virtual power plant,” Myung Shim, Nectr’s head of channel partnership tells One Step Off The Grid.
Looking beyond the 50c/kWh FiT and the $100 sign-up fee, the VPP pays a much lower feed-in tariff (FiT) outside of the 4-9pm window of 1.85c – 4.4c/kWh and charges retail electricity “recharge rates” of between 18.6c/kWh-33.74c/kWh, depending on the time of day and the network provider.
It is on offer to households with a solar system of no more than 13.4kW, with a battery of no less than 9.5kWh of storage capacity, and compatible with batteries from either AlphaESS, Qcells, SolarEdge, Sungrow or Tesla batteries. The website notes that it is currently working on incorporating Enphase and SolarEdge into the VPP.
Of the other two VPPs Nectr has on offer, the Plan BEE deal is designed to caters to customers who prefer “a more traditional, DYI approach to their batteries.”
In this case, Nectr says its algorithms optimise customer batteries “from time to time,” trading up to 500kWh per year on the wholesale market.
At the other end of the spectrum is a “set and forget” VPP called BEEyond, that Nectr says is designed for battery owners “ready to go all-in.” In this case, participants pay a quarterly membership fee for a set 1000kWh supply that it says “could” work out at 3c/kWh.
The key difference with the new offering appears to be the increased transparency and the application of time-of-use tariffs for electricity delivered both to and from the grid.
Shim says the feedback from Nectr’s customers on the Plan BEE VPP is that it’s difficult to work out whether the lump sum they are paying is fair compensation or the energy they are exporting from their battery.
“And that also comes back down to the fact that consumers are very familiar in Australia with solar FiT but they’re not really, I guess, up to [speed] on dispatch scenarios in an FCAS market or arbitrage market.”
The launch of Nectr’s new virtual power plant (VPP) comes as the Australian energy market rule maker, the AEMC, prepares to make changes to regulations that would allow consumer-owned resources to bid into the spot market, set prices, receive dispatch instructions and earn revenue for grid services.
In a draft determination published last week, the AEMC said the changes could mean customers resources, including VPPs, “will be as technically capable as any other generator,” including coal and gas plants.
The AEMC also points to recent modelling indicating that VPP market participation, alone, could result in cost savings of $834 million between 2027 and 2050, thanks to the more efficient provision of energy security and reliability services.
“By making price-responsive behaviour visible, we’re allowing the market to operate more efficiently. It’s like giving the system a pair of glasses – suddenly, it can see and respond to consumer actions that were previously invisible,” AEMC chair Anna Collyer said.
“This improved visibility will lead to more efficient generation use, lower system costs, and potentially reduced energy prices for all consumers. It’s a win-win that doesn’t require changing behaviour, just smarter market operation.”
Sophie is editor of One Step Off The Grid and editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
