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The World’s Largest Virtual Power Plant will have a network of 50,000 rooftop solar and battery systems, and a capacity of 250MW, Tesla claims
In a bid to promote renewable energy usage and lower energy consumption bills, the Australian Renewable Energy Agency (ARENA), on behalf of the Australian Government, issued funding of US$8.2 million to Tesla Motors Australia, ARENA announced in a press release last week.
The $60.6 million South Australian VPP project has also secured funding of $10 million from the South Australian Government’s Grid Scale Storage Fund in ongoing payments, $30 million in debt finance from the Clean Energy Finance Corporation, and an $18 million equity injection from Tesla, the statement said.
The funding is aimed at enabling Tesla to ramp up its efforts in building the world’s largest Virtual Power Plant (VPP) in Australia.
A VPP is a centrally-managed cloud-based network of battery systems installed behind the meter, that can be collectively controlled through the Tesla app to monitor energy usage and to deliver benefits to households, energy retailers and the local network.
The most valuable auto-maker in the world, Tesla will use the fresh funds to deploy residential batteries and rooftop solar systems across 3,000 social housing properties in Adelaide, owned by social housing services provider Housing SA, in Phase 3A of the project, the press release noted.
According to the statement, Tesla will install a 5-kilowatt rooftop solar system and a 13.5-kilowatt-hour Powerwall battery system at each property, providing approximately 80% of the average household energy needs, with no cost for installation charged to the tenant.
In a previous phase of the project that was supported by the South Australian government, 1100 solar and battery systems were installed by Tesla. Together, the two phases provide 20 megawatts or 54 megawatt-hours of residential energy storage to be used in a ‘centrally controlled’ VPP trial.
The 3000 additional solar and battery systems to be installed during this phase will also participate in the VPP trial of the Australian Energy Market Operator (AEMO), which manages electricity systems across Australia, in order to export excess energy to the National Electricity Market, and thereby offer grid stability, the statement noted.
The latest installations are part of Tesla’s aim to build the world’s largest VPP in Australia comprising 50,000 solar and storage systems across both social housing as well as private properties, the statement added.
Tesla’s VPP project is set to benefit social housing tenants, who generally cannot benefit from renewable energy, with the project offering electricity at 22% lower rates than the market price, thus promising cheaper household electricity bills and a more resilient electricity grid, the statement added.
“This project represents a significant step towards a technology and commercial model for battery and solar that requires no upfront cost or risk to the customer,” ARENA CEO Darren Miller said. “Another benefit of this approach is that it is open to households that otherwise wouldn’t have access to renewable energy options.”
ARENA had previously supported VPP projects in South Australia that were led by AGL and Simply Energy, according to the press release.
More than 2.5 million households are already equipped with rooftop solar systems in Australia, while over 60,000 homes have battery storage systems installed, the statement noted.
A 2017 report by Energy Networks Australia (ENA) estimates that between 30% and 45% of Australia’s electricity will be supplied by consumer-owned generators by 2050, for which, network companies will pay $2.5 billion per year to customers for network support.
By 2050, approximately, $16 billion per annum in grid infrastructure investment may be avoided by the use of VPPs, the report states.
VPPs also effectively bring down electricity costs, resulting in a total cumulative reduction in grid expenditure of $101 billion by 2050, the report added. Therefore, VPPs would be important to Australia’s future energy security and stability, Miller noted.
“As rooftop solar and home battery storage increases in Australia in the coming decades, virtual power plants potentially have an important role to play in harnessing distributed energy in a way that maximizes the benefit to the customer as well as the electricity system as a whole,” he also said.
“By supporting this pioneering project, ARENA is excited to help support the evolution of virtual power plants that can provide dispatchable power and essential grid stability powered by clean energy technology, at scale,” he added.
Header image courtesy of Tesla Australia