AEMO has secured funding from the Australian Renewable Energy Agency (ARENA) for its Virtual Power Plant (VPP) demonstrations to advance the integration of Distributed Energy Resources (DERs) in Australia’s electricity network.

As part of AEMO’s broader DER program, the VPP demonstrations will provide evidence-based learning towards the integration of DERs, which have the potential to harness scalable consumer value and power system reliability and security in the National Electricity Market (NEM).

In general, a VPP is an aggregation of DERs, such as rooftop solar systems, batteries and controllable-load devices, operated using software and communications technology to provide energy and network services traditionally performed by a conventional power plant. 

Australia’s reliance on conventional power plant is transitioning, with AEMO’s Integrated System Plan (ISP) projecting that the NEM will host up to 21 GW of rooftop photovoltaic (PV) capacity by 2040 in a neutral scenario, and 56 GW in a high growth scenario. This will make rooftop PV the highest capacity generation technology in the NEM by 2040 under the high DER scenario.

“As our 2018 ISP reports, Australia’s energy landscape is transforming towards a deep penetration of consumer-level renewable generation and storage capability,” said AEMO’s Emerging Markets and Services EGM, Violette Mouchaileh.

“This is driving the need to enable the grid for two-way electricity flows from households and businesses into the poles and wires network.

“Importantly, the demonstrations will give AEMO, for the first time, operational visibility of VPPs to accelerate the shared learning on how to safely and efficiently integrate, operate and regulate these emerging technologies into the NEM,” she said.

Under the demonstration program, VPP participants will operate their DER portfolios to deliver a range of services that contribute to power system stability and local network support services.

These DER services include consumers participating in the Frequency Control Ancillary Services (FCAS) and energy markets, as well as network support agreements with network service providers (NSPs), like demand management. 

“AEMO recognises ARENA’s valued contribution to this pioneering program to achieve our purpose to provide reliable, secure and affordable energy for all Australians into the future,” she said.

Alongside the demonstrations, AEMO is collaborating with the energy sector to develop a national register and technical standards for DERs, along with a recommended model to transition to a two-way electricity grid, integrating DERs to deliver better outcomes for all customers through the Open Energy Networks process.

AEMO is currently developing the enrolment documents, terms and conditions for participation and will publish these details shortly on the VPP Demonstrations website. You can read ARENA's media release about this exciting announcement here.