South Australia has joined the United States and Canada in trialling a virtual power plant (VPP) linking lithium-ion storage, via a remote server control system which handles the output of the batteries through energy management software.
The Australian Renewable Energy Agency (ARENA) and US-based energy storage and management company, Sunverge, have partnered with AGL in the South Australian initiative, which is expected to be the largest in the world. Earlier this year AGL announced that it had invested $20 million in Sunverge to “enhance its energy storage management capabilities and help accelerate the adoption of energy storage in the Australian market”.
The South Australian VPP project is aiming to comprise of 1,000 centrally controlled battery storage systems with the combined storage of 7MWh of energy, the equivalent of a 5MW solar peaking plant.
The cost of the project is expected to be $20 million, with ARENA providing $5 million in funding. The batteries will be heavily subsidised, with some batteries receiving a subsidy of up to 80 per cent[i] with a payback of seven years for households with adequate solar panels. AGL will manage the batteries en masse at critical times to manage peak load or perform non-network grid services.
The project will be rolled out in three phases over 18 months. The first phase will run until April 2017 and is aimed at metropolitan Adelaide with customers able to purchase a Sunverge 5kW/7.7kWh energy storage system. The second and third phases will be offered in narrower zones within metropolitan Adelaide with the aim to demonstrate peak demand management and other network support services.
Each battery will be connected through a remote server, or “cloud-connected intelligent control system”. This will allow a remote operator to control the output of the aggregated batteries through energy management software.
The benefits of the VPP will be measured through customer savings, deferred network augmentation, reduced usage of peaking plants and contribution to grid stability. Customer savings are realised through increased self-consumption of electricity generated behind the meter and, depending on the tariff structure, decreased usage during times of higher energy prices. Phases 2 and 3 will showcase the network support services capabilities of the project, with aggregate dispatch able to offer grid services. Grid services occur through the constant and reliable supply of electricity when needed. A larger project could result in deferred network augmentation.
According to Bloomberg energy newcomers such as Apple Inc. and EnerNOC Inc. in the US, along with legacy power providers, including RWE AG and E.ON SE in Germany, are “scrambling for ways to squeeze more out of the intermittent power flows that come from solar panels. They’re combining battery and information technologies to help manage when electricity is delivered”. And Bloomberg New Energy Finance is predicting significant growth in the market for home and business energy storage devices[ii].
The South Australian project joins other pilot programs, including:
The demonstration programs are part of the overall testing of energy storage systems and their applications. Ergon Energy has conducted a 12-month research project into existing battery storage systems and highlighted the growth in their availability and development. In March 2014, 40 companies offered residential battery energy storage systems; that number has now increased to 70[v].
[i] THE HON JOSH FRYDENBERG MP, MEDIA RELEASE: “CREATING A FUTURE ENERGY FRAMEWORK WITH BATTERY STORAGE”, https://www.environment.gov.au/minister/frydenberg/media-releases/pubs/mr20160805.pdf, 5/8/2016
[v] Australian Institute of Energy, “NEWS, Vol 34, No 2”, http://www.aie.org.au/AIE/Publications/Energy_News__Journal_/AIE/Publications/Energy_News.aspx
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