A Virtual Power Plant can make your business real money

One of the challenges facing Australia in the transition to renewables is grid stability. Burning fossil fuels offers a steady and reliable supply of power, while popular renewables like wind and solar depend on unpredictable weather conditions for their output.

VPPs will play a very important role in those moments when the sun doesn’t shine, the wind doesn’t blow or there’s an oversupply of power in the grid.

During periods of peak demand, virtual power plants can step up, drawing on distributed energy assets to top up any shortfall. Reducing risk of blackouts and brownouts. They also offer an innovative way to consume or store spare power when renewables produce more than we need.

Benefits of joining a VPP include:

• Earn or save money. Get paid for exporting energy to the grid, absorbing excess energy from the grid or by reducing energy usage during periods of peak demand.
• Contributes to grid stability. A stable and dependable energy supply minimises brownouts and blackouts.
• Support the energy transition. VPPs play a crucial role in reducing our dependence on fossil fuels.

As part of a VPP you’ll be paid for helping to stabilise the grid. The help you provide can come in many forms. Your business might provide energy, store excess energy (for example, batteries during periods of high solar generation) or switch off or reduce energy consumption as needed.

You can be paid a price determined by the wholesale energy spot market or offer to have your services on standby during times of high demand – earning money via the FCAS market.

The Australian Energy Market Operator (AEMO) runs what is known as Frequency Control Ancillary Services (FCAS) markets – it’s a group of power assets on standby to respond quickly when the grid is unbalanced.

As part of a VPP you could be paid to have your assets on standby to help the grid to remain stable. It’s win/win.

The National Electricity Market (NEM) generates a spot price for electricity that reflects supply and demand – a price which updates every five minutes. Sudden changes like extreme weather or interruptions to supply can cause spikes in energy costs.

Hydro’s VPP can give you access to the spot market price to sell your excess electricity (or load reduction capability) when prices look good.

Demand Response is a way for utility companies and grid operators to manage and balance supply and demand of electricity during times of high demand or low supply. It incentivises consumers to change their patterns of energy use – for instance temporarily reducing load when the grid is struggling to meet demand.

To enable Demand Response, Hydro’s VPP uses AI to optimise your assets and automation for rapid response – so you generate maximum revenue while we work within the parameters set up for your business. We also offer the option of an Opt-in/Opt-out function so you can override the automation when needed – at the click of a button.

There are essentially two different groups of assets that can participate in a VPP – they interact with the grid slightly differently.

• Assets that can generate or store power include things like solar panels, generators and batteries that can push energy into the grid, when it’s needed. Batteries are a special case as they can also be charged off the grid and store energy when supply is high, keeping it for a rainy day (when the grid needs a top up).
• Assets that consume energy also have a role to play in VPPs. Large HVAC systems, pumps, datacentres, cold stores and the like are controllable loads. They sit ready to be turned on and off (or up and down) so that they consume more or less energy, depending on the supply and demand on the grid. Their flexibility makes them useful for finessing the balance of the grid.

To join Hydro Tasmania’s Virtual Power Plant you’ll need to get in touch with our team to discuss your assets and figure out if you’re eligible – we'll arrange a back-cast to give you an idea of what you may have been able to earn in the past year or two. From there, we’ll come to an agreement setting out how we’ll operate so it doesn’t disrupt your business. Once setup is complete you can start getting paid.

You’ll receive ongoing support and access to a VPP customer portal, where you can monitor the status of your assets, gain insights on their trading performance, and keep an eye on the wholesale energy market. And if you have a retail contract with Momentum Energy, you’ll get your own account manager.

Your business is responsible for maintaining your energy assets.

It’s possible to include diesel generation as part of Hydro’s VPP, but there are a few conditions. Your diesel generator will either need to use biodiesel or your emissions will need to be offset – to keep things greener.

Your business will always come first – the last thing anyone wants is for your core operations to be disrupted in any way that you don’t want us to. We’ll work around the needs of your business. We’ll always work within your operational parameters, and the warranty conditions of your assets.

Ah, the million-dollar question. (Or maybe not quite a million). We can’t predict the future. However, we can utilise revenue back-cast modelling to offer insights into potential earnings based on the past 12 months or more. Request a backcast.