When the National Electricity Market (NEM) was established, generators provided both energy and stability services. Consumers were passive, using energy when needed. In the 1990s it was difficult to foresee that households would be able to provide energy or ancillary (balancing) services.
However, in recent years there has been rapid adoption of solar photovoltaic (PV) and we are now seeing a surge in electricity storage. Solar combined with battery systems and intelligent software such as Reposit’s GridCredits technology, mean consumers can now own personal power stations. These can sell energy and stability services to the National Electricity Market.
For a long time, the Grid has existed as a top-down distributed system – distributing power in a single direction. Because of the adoption of PV and battery systems the grid shape has evolved and is no longer distributing power in a single direction. This has introduced new challenges for retailers and networks including:
- Building costly new infrastructure;
- Power quality in distribution grids;
- Wholesale market volatility; and
- Lack of balancing plants
Virtual Power Plants (VPP) offer solutions to retailers and networks who face these challenges.
Virtual power plants are a cluster of distributed generation systems that can deliver peak load electricity or load-aware power generation at short notice. They can be made up distributed energy systems in homes or businesses, who use these systems for supplying their own needs when the VPP is inactive.
But VPPs can have a dark side.
- VPPs can be used to take energy from consumer’s energy systems without notice or payment. This is energy that has been generated and stored by the PV panels and batteries paid for and owned by the consumer.
- VPPs can be used to lock customers into very long term retail energy contracts. This undermines decades of reform that has resulted in a competitive retail electricity market. Reduced competition in this market may push up prices and slow innovation.
- VPPs can lock retailers and networks into only one brand of battery. Big battery brands are encouraging networks and retailers to adopt their proprietary VPP technology. This has the effect of locking other battery brands out of the VPP, reducing choice and competition from the market.
Reposit believes in VPP’s that deliver a fair outcome for consumers, networks and retailers. It’s like the eBay of energy – where consumers and utilities trade with each other in a transparent market. With Reposit, a consumer is always free to change retailers. And with Reposit, any battery is free to join the VPP.
VPPs have the capability to be the foundation of a clean, reliable and cost-effective electricity grid. Reposit believes that creating a fair, open market is the only way for them to fulfil this capability.