As Australia prepares for the staggered shutdown of its coal fleet, which turns out most of the electricity we all use, enormous expectations are held out for the stabilising effect of storage. It’s an enormous task. In its 2020 Integrated System Plan, the Australian Energy Market Operator says it expects between 6 and 9GW of “dispatchable resources” should do the trick.

One of the three categories AEMO has focused on is “shallow storage”, which includes residential batteries connected via virtual power plants and two-hour large-scale batteries. “The category of storage is more for capacity, ramping and frequency control ancillary services than it is for energy value,” the AEMO report says.

Energy generator and retailer AGL was one of the first movers in this space in 2016 when it started to install batteries for customers in Adelaide, South Australia, who agreed to allow it access to their stored solar energy in return for payments.

It took a while for AGL to hit its target of 1,000 participants in its VPP, a reflection of the difficulty in explaining to its customers the value of taking a part in providing grid stability to everyone else in the state. But as the energy transition becomes better understood, AGL has announced it is ready to expand its VPP with the launch of solar battery sales and installations for residential customers in Queensland, NSW and Victoria.

“Last year [the VPP] was expanded to include customers from other states with a solar battery, but this is the first time we have sold and installed batteries at scale outside South Australia,” said AGL general manager decentralised energy resources Dominique Van Den Berg.

Customers in Queensland, NSW and Victoria and will be able to buy Tesla batteries or LG Chem batteries with SolarEdge hardware at discounted prices, Van Den Berg said, with two payment options: buy a battery outright or spread the purchase over five years and pay from $177 a month.

“By joining AGL’s VPP program, customers receive payments for allowing AGL access to their batteries at key times during the year to help improve grid reliability, making the decision to invest in batteries more attractive,” she said.

Expanding the VPP will help AGL achieve its target of having 350MW of distributed and demand response assets under orchestration by 2024.

“AGL is investing not only in small scale batteries like those in the VPP but also grid-scale batteries to provide the firming capacity that the energy market needs for the transition from coal to renewables and the decarbonisation of the economy,” she said.

Not alone

Other providers are gearing up to satisfy the requirement for storage in the NEM. Tesla also expanded its VPP in South Australia recently with news that solar and battery storage systems will be installed on 3,000 social housing residences in the state, additional to the 1,000 units already connected to it.

Housing SA tenants who sign up for a special low electricity tariff will have 5kW in rooftop solar and a 13.5kWh Tesla Powerwall system installed at their home at no cost to them.

The program is supported by a $30 million investment by the CEFC, an $8.2 million grant from ARENA, $10 million from the South Australian Government’s Grid Scale Storage Fund and an $18 million equity contribution from VPP operator Tesla.

With the additional 3,000 homes, the extended SA VPP will be able to generate an estimated 20MW in solar energy, with 54MWh of combined battery storage.

AEMO has forecast that rooftop solar could provide 22% of Australia’s total energy by 2040, representing as much as 50GW. At the same time, embedded battery storage capacity, including VPPs, will make up as much as 30GW of energy, paving the way for VPPs to significantly contribute to Australia’s future lower cost, low emissions energy system.