Virtual Power Plants are new so if you're still curious about how it works, check these frequently asked questions.
What's a virtual power plant?
A virtual power plant (VPP) is a network of home solar photovoltaic (PV) and battery systems working together to generate and store energy, and feed energy into the grid.
A VPP enables the provision of cheaper, solar-generated power for the households connected to it and for the wider community.
What kind of virtual power plant is being created in South Australia?
The South Australian Government is working with Tesla and electricity retailer Energy Locals to create a VPP that will eventually include 50,000 households.
It's new technology, so the VPP is being introduced as a trial with three phases.
In the first phase, which has just been completed, home energy systems – comprising a 5kW solar PV and 5kW/13.5kWh Powerwall battery –- were installed in 100 households.
Phase I was successful in reducing households' energy costs, so we're moving on to Phase II.
In Phase II, 1,000 households will have home energy systems installed, and another 320 households will share in the benefits of the VPP as program participants. Tesla has identified this 1,320-home network as being the ideal sample size to test the VPP's ability to operate at scale, while reducing power use and costs for program participants.
If the Phase II trial meets its objectives and obtains private financing, Phase III will start, scaling up to an additional 49,000 households from mid-2019.
How does a VPP work?
Energy from the installed home solar PV and battery system provides electricity for the house on which it is installed. Any energy generated by the system and not used by the household will be dispatched to the grid.
The dispatched energy will be centrally controlled to support the needs of the grid, providing additional energy to the rest of the state when it is needed.
Who's creating it?
The South Australian Government is working with Tesla and electricity retailer Energy Locals to develop and test the VPP in South Australia.
• Tesla has designed and developed the VPP, and is managing the installation of the solar panels and battery storage in South Australian homes.
• Energy Locals is the retailer that is arranging residents' supply contracts, and is customers' main point of contact about their electricity supply and their bills.
• The South Australian Government is providing grant and loan funding, through the Renewable Technology Fund, to support the trials.
What's Energy Locals' involvement?
Energy Locals will provide the energy retail services, including account management and customer support, for Phase II.
Energy Locals is an Australian start-up aiming to provide clean energy at a fixed retail margin to make it cheaper and fairer.
How much power will the VPP generate?
When the VPP is operating at full scale, it will generate 250MW and store 650MWh.
At 250MW/650MWh, the VPP will be 2.5 times the capacity and nearly five times the storage of the Hornsdale lithium-ion battery near Jamestown.
How does the VPP reduce power costs?
A VPP home energy system includes solar panels and a Powerwall battery, and the equipment needed to connect them to the grid.
When installed in your house, the system will absorb solar energy and store it in the battery. During the day, the system may produce more energy than you use. The battery will store that excess solar energy and make it available when required, even after the sun has set.
If your VPP-connected household uses more electricity than is available in your home energy system, it will draw from the grid instead. All electricity consumed by your household (whether from the energy system or the grid) will be metered and charged for through your electricity bill. VPP participants will be charged a much lower rate for electricity use.
The overall reduction in your energy bill will depend on factors such as the type of electricity retail contract you're on now and how much energy your household uses.
What are the benefits?
If you are a VPP participating household with a home energy system installed, you can expect your power bills to drop. Depending on the type of electricity retail contract you have now, your bills could be reduced by up to 30%. You'll also have access to power during a network outage.
In addition, you'll be helping other SA Housing Trust tenants who are sharing the benefits of the VPP trial and this world-first technology. By sharing your excess power, you're helping reduce their bills and those of many other South Australians.
At full scale the VPP will make electricity more affordable and reliable across the state by introducing competition to the market, adding new dispatchable supply, and boosting the security of our network.
The VPP is also capitalising on the world-class renewable energy assets we have in South Australia, and increasing the role these resources can play in our energy future.
When will it affect my power bill?
The VPP Program Offer extended to selected participants by Energy Locals is up to 30% less than the average standing retail offer in South Australia today. Program participants should notice the difference in their bills straight away. The size of the difference will depend on what kind of electricity retail contract you had before, and how much electricity you're using.
The VPP Program Offer during Phase II is only available to households selected to participate in the trial.
What are the installation costs?
If your property is chosen for Phase II of the VPP, Tesla will install the system at no cost to you.
If you are a private property owner looking to participate in the VPP, the costs to opt in to the program will be determined before Phase III is announced.
Will the home energy system work during a network outage?
Yes. Powerwall home batteries have back-up functionality. They can detect an outage, disconnect from the grid, and automatically restore power to your home in a fraction of a second. As long as your battery has storage in it at the time, you won't even notice that the power went out. Your lights and appliances will continue to operate without interruption.
If I require life-support equipment, will the Virtual Power Plant home energy system installed in my home provide me with backup power?
The Virtual Power Plant installed at your property is designed to provide back-up power in case of a network outage. However, depending on your energy use, there may not be enough stored in your battery to power your home for the duration of any grid outage in your area.
If you accept a Program Offer from Energy Locals, you will be asked to provide information about your life support equipment. Please ensure Energy Locals has this information, and is aware of any changes.
Who can take part?
Phases I and II are limited to SA Housing Trust households who have registered their interest in the VPP program, with the benefits shared among lower-income South Australians.
Subject to the trials' success, program financing, and the satisfaction of both Tesla and the government in the final program design, the full program will be rolled out to 24,000 more public housing properties and 25,000 private properties from mid-2019.
We'll be posting news about Phase II and Phase III on this website. However, if you would like to receive regular updates directly, we encourage you to register your interest via this website.
I'm a registered SA Housing Trust tenant. What happens now?
If you are a SA Housing Trust tenant who registered your interest in the VPP program before 1 November 2018, your home may be randomly selected and considered for a home energy system installation in Phase II.
About 37,000 South Australians registered their interest when the VPP project was announced in February 2018. Phase II involves 1,320 properties, so you may not be contacted about being involved until Phase III starts.
If you are one of the households randomly selected for Phase II, Energy Locals will contact you about the VPP Program Offer, which will be gradually rolled out between December 2018 and June 2019.
If you accept Energy Locals' offer, Tesla will contact you to organise a site inspection to confirm the suitability of your property.
Will the bills come from the government?
If you accept the VPP Program Offer from Energy Locals, your bills and any communication about your electricity retail contract will also come from Energy Locals.
You'll be asked to set up a monthly direct debit from your bank account or credit card, or you may wish to pay through CentrePay. If you choose Centrepay it's important that you also call Concessions SA on 1800 307 758 and let them know you've switched to Energy Locals.
Is the VPP program offer the best electricity offer for me?
Everyone should make their own decisions about the best electricity plan for their households. A simple way to do this is to look at www.energymadeeasy.gov.au and compare the Energy Locals VPP Program Offer rates with other offers available on the market. Please note that the VPP Program Offer is not open to the general public and as such will not be visible on the energy made easy website.
If you wish, you can send a copy of a recent electricity bill to the Energy Locals team at firstname.lastname@example.org and they'll run a comparison for you.
Benchmark modelling undertaken by Frontier Economics indicates that at the time of Phase II program launch in November 2018, the VPP Program Offer was the best available to residential customers in South Australia. However, you should consider your personal circumstances.
How are participants being chosen?
Phases I and II are being limited to SA Housing Trust properties with tenants who registered their interest in the VPP program before 1 November 2018.
If you are a SA Housing Trust tenant who registered your interest, your property will be among those considered for the trial. SA Housing Trust is working with Tesla to identify suitable properties. Some properties aren't suitable, because of their location and orientation, the structure type or shape, or potential shading.
Among those that are suitable, 1,000 are being randomly selected for installation in the metropolitan and regional areas. Another 320 non-installation participants are being selected to access the benefits of the VPP Program Offer.
If your property is selected, Energy Locals will contact you about the VPP Program Offer. If you accept, Tesla will be in touch between December 2018 and June 2019 about arranging a site inspection.
If the site inspection shows that your property isn't suitable for the installation of a home energy system, but you've accepted an offer from Energy Locals, you'll remain a part of the VPP program and gain the benefits as one of the 320 non-installation participants.
Properties that aren't considered suitable at this stage may be eligible for Phase III, when systems may be able to be customised for individual circumstances.
Is it compulsory for SA Housing Trust tenants to participate?
No. In the initial two phases, home energy systems are being installed in 1,100 suitable SA Housing Trust properties with tenants who have registered their interest in this program. If the project reaches the next phase, it's likely that all SA Housing Trust properties will be considered for their suitability for installation of a home energy system.
As a tenant, you can choose not to accept the VPP Program Offer, but this will prevent you from being a part of the VPP Program.. If you choose to opt out at a later date, your home energy system will remain and you will be able to choose your retailer in a normal market arrangement, but you’ll no longer be eligible for the special energy rates offered through the VPP program at any time. If this happens the output of your home energy system may be sent straight to the grid.
What if I already have solar panels?
Households with existing solar PV are not eligible for Phase II but may be able to join the VPP at a later stage.
What if power prices drop over time?
The VPP is designed to provide you and other residents with more affordable and more reliable electricity. Project partners have designed the program to ensure participants are offered the most competitive packages available.
How much is the virtual power plant costing?
The VPP is expected to cost $800 million, much of which will be funded by private investors attracted by the success of the trials.
Phase I was fast-tracked by a $2 million grant from the State Government. Phase II is being supported by a $30 million loan from the South Australian Renewable Technology Fund.
What other assistance is available for paying energy bills?
Eligible South Australians on low or fixed incomes can apply for help with the cost of energy bills. The concession amount is indexed each financial year. For 2018-19, you may be eligible to receive up to $223.01 to cover both electricity and gas payments (including LPG bottled gas). Refer to www.sa.gov.au/topics/care-and-support/financial-support/concessions/energy-bill-concessions for more information.
If you have difficulty paying your electricity bill, we strongly recommended that you contact your retailer. Retailers will work with customers regarding repayment of their bills, and may be able to offer a discounted rate if requested.
If you are a concession customer and you sign up to the Phase II VPP Program Offer, you must contact Concessions SA on 1800 307 758 about your new electricity retail contract with Energy Locals.
Should I wait for the full roll-out of the program before I buy a solar or battery system?
Tesla is exploring how properties with existing solar installations may be able to join the VPP. More will be known by the time Phase III begins in mid-2019. However, there will be no reimbursement for any costs associated with prior installations.
While all parties are working towards the success of the trials, it is also important to understand that there is a chance that the full-scale roll out of this project may not proceed.
Separately, the South Australian Government has committed to its $100 million Home Battery Scheme. The government launched this scheme in October 2018 and information can be found at homebatteryscheme.sa.gov.au
Given the number of programs available to help South Australians better manage their energy usage and costs, we strongly encourage you to fully investigate the suitability and likely benefits of any investment or participation in any programs based on your individual circumstances.
How does the VPP Program differ from the Home Battery Scheme?
The Home Battery Scheme is separate from Tesla's Virtual Power Plant and other virtual power plant programs being trialled in South Australia.
Households accessing the Home Battery Scheme will be able to choose from a variety of home battery systems and they will own the system.
The Home Battery Scheme is open to all households in South Australia and is funded by $100 million in State Government subsidies to help pay for home battery installations.
An additional $100 million has been made available by the Clean Energy Finance Corporation to finance low costs loans to households to install new or additional solar capacity.
Households interested in participating in the Home Battery Scheme program can find more information or request a quote at homebatteryscheme.sa.gov.au
I have more questions – who do I call?
Please contact the VPP hotline on 8226 2414 with any questions.