The Australian Renewable Energy Agency (ARENA) announced Friday that it had conditionally committed up to A$5 million in funding for Australian energy group AGL to install 1,000 centrally controlled batteries in South Australian homes and businesses with a combined 5 MW/7 MWh storage capacity.
ARENA CEO Ivor Frischknecht said the $20 million project could lead to solutions for South Australias grid challenges and reduce the risk of power price shocks in the state.
Australia is on the cusp of a battery storage revolution as technology costs continue to fall, Frischknecht said, adding that ARENA was at the forefront of figuring out how batteries can best support renewable energy to provide affordable, reliable and sustainable power. When small-scale batteries work together they become more than the sum of their parts.
AGL plans to operate the batteries as a kind of virtual power plant, Frischknecht added. The company will install them alongside solar PV and link all 1,000 systems with centralized monitoring and management software.
The result is like adding a 5 MW power station that can quickly deliver enough energy to power 1,000 South Australian homes where and when its needed most. This approach can ease local network constraints, displace gas power and complement the Victorian interconnector, especially during times of peak demand.
AGL has selected Sunverge batteries and control systems for phase one of the project. Sunverge received ARENA-backed funding and its batteries are also being trialled in Queensland by Ergon Energy in another ARENA-supported project.
ARENA predicts that virtual power plants will play a significant role in the future as more renewable energy is connected to Australias power networks.
The approach also offers more value to customers, retailers and network companies from both the batteries and solar panels, making renewable energy more competitive, Frischknecht said.
The AGL project is set to be the largest demonstration of a virtual power plant in the country. South Australia, home to some of the highest levels of solar and wind in the world, is an ideal proving ground.
The project could also act as a catalyst by providing evidence for regulatory change to enable more Australian virtual power plants.
ARENA added that its funding support depends on the negotiation of a funding agreement, which will include comprehensive knowledge sharing outcomes.
The knowledge would show a path to commercialization and present lessons that regulators and other energy companies can learn from, Frischknecht added.
AGL Managing Director and CEO Andy Vesey added, The energy landscape is rapidly changing and distributed energy services through projects like this, involving batteries, solar and the grid, can help customers manage their energy bills and provide grid stability."