AGL Energy to create the world’s largest virtual power plant

AGL Energy to create the world’s largest virtual power plant

AGL Energy (ASX:AGL) is planning to create what will be the world’s largest “virtual power plant”, using 1,000 connected storage batteries installed in homes and business in South Australia.

The batteries will feed off solar panels on rooftops to alleviate bottlenecks on the grid and help decrease price spikes.

AGL’s partner Sunverge, will use its storage batteries that would usually cost around AUS$16 million if purchased outside of the project, but householders will be able to buy them for only $3,500 under the heavily-subsidised programme.

AGL will provide $9 million to the project, in addition to $5 million in federal government funding for the $20 million demonstration project, which will provide participants with discounted batteries.

The solar-powered batteries will be able to store 7MW hours of energy, with output equivalent tot a 5MW solar plant.

The project aims to help customers manage their energy bills and contribute to the stability of the grid.

Andrew Vesey, AGL’s managing director said the project would soon be expanded to include other suppliers of storage batteries, but Sunverge had been chosen because it fitted the technical and quality requirements.

“This is the equivalent of rainwater tanks for electricity,” added Tom Koutsantonis, South Australian Treasurer. “This gives us the ability to turn a dumb grid into a smart grid.”

Vesey said households were likely to save around $500 a year off their energy bills by participating in the programme.

Around $5 million of the project costs will be provided by Australian Renewable Energy Agency (ARENA), while Sunverge is providing $1.5 million.

Ivor Frischknecht, ARENA’s CEO said the project could point to solutions to the “challenges” in South Australia’s grid and reduce the risk of power shocks, in addition to help ease constraints in the grid and displace expensive gas-fired power.