Virtual power plants: How the energy initiative could power your home

electric power substation

With a rise in solar panels and other renewable energy sources, virtual power plants are growing in popularity around Australia as more communities take charge of their own power. 

While virtual power plants can be a bit confusing, we’ve put together this guide to explain how they work to power your home, and how you can become a part of one.

What is a virtual power plant and how do they work?

A virtual power plant, commonly abbreviated as VPP, is a community-based network that allows for power generation and storage separate from the main grid. 

VPPs work by connecting a group of homes or businesses together such that their generated power is shared throughout, and stored energy between all buildings in the VPP can be accessed by any other building within the network. 

As the network relies on its own power generation, solar panels and batteries are usually featured within the VPP, however they will usually be centrally operated collaboratively rather than privately by one individual, due to the fact that the power generated from the panels will be used all throughout the network. 

While a VPP can still be connected to the grid, the aim is to allow the community to generate and store their own power, relying less heavily on the grid and bringing down the energy costs of all members.

Excess generated power can also be sold back into the grid, bringing down the energy costs of network members even further, or potentially resulting in payments.

While some VPPs operate in small communities, others are larger in scale. The AGL Virtual Power Plant in Adelaide contains a large number of solar battery storage systems operating across 1000 homes and businesses. The batteries are able to communicate via a cloud-based control system that allows them to operate together as a 5MW solar power plant.

How do I become part of a virtual power plant?

A number of electricity retailers and specialist providers are currently running VPP projects throughout the country. 

If you’ve already got a battery system installed, the type you have will dictate which VPP program you’re compatible with. If you don’t yet have a battery system, searching what programs are available around your area can help inform your decision on what to purchase.

The next step is getting in contact with the provider or retailer that oversees the VPP you’re interested in becoming a part of. You can usually find a complete list on your state or territory government’s energy website if you don’t wish to search individual programs. 

Some VPP programs will require the installation of an energy management device, while others will require software to work with a specific model and brand of battery system, so you should prepare for the potential of some set up costs. 

Once you’re up and running as part of a VPP, however, you can expect savings on your energy bills, and you will have better control of your power.

Looking for a new energy plan? Head to our energy hub to find and compare providers in your area, or use our handy comparison tool below.

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