Tesla to add batteries and solar to another 3,000 low income houses in world leading VPP

South Australia has launched phase three of its Tesla home battery-based virtual power plant, extending the scheme to another 3,000 public housing properties and kicking off a “world-first” deal to procure a Big Battery’s worth of grid support services.

Energy minister Dan van Holst Pellekaan said on Friday that the latest $60.6 million expansion of the Tesla VPP would take the scheme to 4,100 Housing SA properties across the state, and on track to reach the ultimate goal of 50,000 South Australian homes, both public and private.

For the Housing SA tenants, the scheme installs a 5kW rooftop solar and 13.5kWh Tesla Powerwall 2 battery system at no cost, and provides the household with a flat-rate electricity tariff priced 22% lower than the Default Market Offer, whether from the battery or the grid. It will be retailed through Energy Locals.

For the state, Phase 3 of the SA VPP will bring together roughly 20MW of rooftop solar energy and 54MWh of combined battery storage to act as a single “power plant,” that can send excess solar to the grid and offer voltage and frequency support, as well as synthetic inertia.

“In a world-first, home batteries will provide the grid stability services that South Australia has lacked since the closure of the Northern Power Station, to address the legacy of instability that we inherited,” said van Holst Pellekaan.

“This will deliver at a household level what we are also delivering through the 50% expansion of the big battery at Hornsdale Battery to address these legacy issues.”

This function comes at a critical time, as South Australia and the Australian Energy Market Operator struggle to address the increasingly urgent problem of integrating the state’s word-leading rooftop solar capacity.

As RenewEconomy has reported, South Australia is on track to become the first gigawatt-scale grid in the world where the growing amount of rooftop solar effectively eliminates grid demand – which sounds like a good thing, but has been a major cause for concern for AEMO.

The scramble to head off potential negative impacts from a solar-soaked grid has led to a number of proposed quick-fixes and market reforms, some of them – such as the proposal to charge solar households for exports to the grid – controversial.

On the less drastic and more consumer-inclusive front, the establishment of solar and battery-based virtual power plants is expected to play a key role in helping to manage the state’s huge solar resource in a way that can benefit all parties.

“Having rooftop PV and household batteries linked through a Virtual Power Plant creates the equivalent of a grid-scale battery in our suburbs and towns, which will complement the four other grid-scale batteries already operating in South Australia,” van Holst Pellekaan added.

“Tesla’s vision is to grow this VPP to include 50,000 homes across South Australia and has already started adding private households in addition to the Housing SA tenants participating in the project.”

In its own statement, Tesla said the SA VPP was the first virtual power plant in Australia to help stabilise frequency levels in the grid and, as of August 2020, was one of only two in Australia to do this.

For its part, Tesla is contributing $18 million to the expansion, alongside $10 from the state government, an $8.2 million grant from the Australian Renewable Energy Agency (ARENA) and a $30 million loan from the Clean Energy Finance Corporation (CEFC).

CEFC CEO Ian Learmonth – perhaps grateful for the well-timed opportunity to demonstrate the mandated purpose of the green bank – said the CEFC was proud to be investing in Australia’s largest VPP.

“We expect to see decentralised battery fleet systems become an increasingly important feature of the grid of the future, drawing on fast ramping services, voltage management and synthetic inertia.”

Learmonth also took the opportunity to note the program’s benefits for households who would not otherwise be able to access solar or battery storage.

“Tenants are often locked out of the clean energy market because they are unable to install rooftop solar systems on rental properties,” he said.

“The SA VPP is delivering an innovative clean energy solution to Housing SA tenants, drawing on proven and cost-effective technologies.”