Explainer: Virtual Power Plants – why should I join?

Virtual Power Plants or VPPs are front and centre in the energy sector right now, and top of mind for forward-thinking solar and battery owners wanting to maximise the potential of their systems.

It’s no exaggeration to say VPPs are currently laying the foundations of a new era of energy in Australia. They offer a road to a more sustainable and reliable energy future, plus better environmental outcomes.

What is a Virtual Power Plant?

A VPP is a network of energy sources, including home solar and battery systems, that are managed through a centralised platform. At different times throughout the day, the demand for electricity increases. This could be due to several factors including peak consumer usage, weather events, fossil fuel generator outages or general underperformance of the grid. When demand is high, VPP operators or electricity retailers such as Nectr are requested to contribute to stabilising the demand. As a VPP operator Nectr taps into its network of connected customer battery systems to redistribute stored, unused energy into the grid when its needed most.

The main goal of VPPs is to optimise the generation, storage and consumption of energy across the network. Cutting-edge VPP technologies use algorithms that leverage real-time data to balance supply and demand, improve grid stability and reliability, and push more renewable forms of energy into the grid.

Why should I join a Virtual Power Plant?

Potential savings: When excess energy stored in battery systems is redirected to balance supply and demand of electricity within the grid, customers have the potential to earn through high Feed-in-Tarrif (FiT) VPP plans. In addition, by researching and comparing VPP plans from different retailers, solar and battery owners will realise that there are other savings and incentives on offer. Credits on energy bills, in addition to one-off sign-up rewards are available.

Incentives and finance options: Governments are offering rebates and incentive programs for homeowners to install batteries and participate in a VPP network at point of purchase of batteries. There are also industry partnerships that are helping homeowners kick start their solar and battery journey, such as Nectr’s partnership with Plenti to offer affordable finance options and green loans

More reliable energy: VPP technologies help optimise energy use to balance supply and demand. This means that during peak times, excess energy stored in battery systems can be redirected when and where it's needed most. This ensures that precious solar energy stored in home batteries connected to VPP networks is never wasted. A more stable energy grid also reduces the likelihood of blackouts.

Supporting a more sustainable future for your neighbours and community: Rooftop solar is generating an abundance of solar energy and has been outpacing coal-fired energy generation. Thanks to households that have invested in a solar and battery system, and connected to a VPP, Australia’s energy grid is less reliant on fossil fuels and edging closer to meeting its climate goals.

Future-proofing energy needs: VPPs are the start of a new era of energy in Australia. When you participate in a VPP you are at the forefront of the latest technologies, essentially future-proofing your household to adjust to varying market conditions that may arise in the future and changes in your consumption behaviour. By participating in a VPP, household energy is used as efficiently as possible to maximise savings and ensure precious energy is never wasted. Plus, energy sharing also benefits the broader community and environment.