Tesla is participating in a massive ‘Virtual Power Plant’ using its Powerwall in South Australia and the first phase of the system is already proving successful according to a new report.

Tesla Virtual Power Plant

The project is the biggest of its kind and it would dwarf any other stationary energy storage deployment if it is ever completed.

It came around after Elon Musk visited South Australia following the launch of its giant battery system in the state.

Musk gave an interview during which he was informed of the significant hardship that Australia’s high electricity prices are putting on families.

Visibly affected by the issue, Musk vowed that Tesla would “work harder” to help solve the problem.

A few months later, Tesla announced that it reached a deal with the South Australian government to install solar arrays and Powerwalls on up to 50,000 homes.

The deal was jeopardized after a new government was elected in the state a few weeks later, but they have since come around and confirmed that they will be moving forward with Tesla’s initiative as long as it is financed successfully.

In July of 2018, Tesla deployed the first 100 Powerwalls with solar for the new virtual power plant and focused on reducing the cost of electricity for low-income households.

A few months later, the project moved to its second phase and Tesla started deploying 1,000 more systems as part of the virtual power plant.

Insight Report for Tesla’s Virtual Power Plant

The Australian Energy Market Operator, the agency behind the project, has released an in-depth insight report on the virtual power plant.

They reported that the virtual power plant was successful in helping in a series of events, including frequency response.

Like this example that happened in December:

“During this event, the NEM experienced both high (>50.15Hz) and then low (<49.85Hz) frequency events within 45 minutes of each other. The SA VPP responded immediately in both cases to first charge the batteries to lower system frequency, and then discharge the batteries to raise system frequency, shown in Figure 3 below.”

Here’s the chart they are referring to:

Over the study, which was just a few months, AEMO determined that the virtual power plant participants earned $225,000:

“Energy Locals, as the market participant for the SA VPP, has been able to earn revenues by participating in the six contingency FCAS markets. Total revenue over the first four months of their involvement (from 13 September 2019 to 12 January 2020) is $225,000. Note that the SA VPP increased its registered capacity from 1 MW to 2 MW on 19 November 2019.”

In the report, Tesla provided some feedback about the results:

“The AEMO VPP trial has provided significant opportunities to demonstrate the capability and revenue earning opportunities for aggregated DER and VPPs operating in the NEM; specifically, the capability of aggregated assets to rapidly respond to frequency deviations and provide critical system security services. This has also meant VPPs are able to access revenues from markets that aggregated assets, particularly smaller aggregated assets, have traditionally been excluded from. The VPP trial has enabled this by:

  • Allowing bi-directional, behind-the-meter aggregated DER assets (such as battery storage) to provide frequency services as both generation and load.
  • Requiring one high-speed (50 millisecond) meter per jurisdiction to cater for appropriate compliance data on a sampling basis when providing contingency FCAS.

The VPP Demonstration has already delivered learnings that have enabled AEMO to release interim arrangements that allow the provision of frequency services as both generation and load, outside the VPP Demonstrations. This is the case if VPPs can meet the current Market Ancillary Services Specification (MASS)6.”

Tesla also made several recommendations to improve the project as they start deploying more volume.

Here’s the report in full:

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