Australia Leads Again with New Mixed-Asset, Multi-Market VPPs

By Pamoda Wijetunge, Regional Head ANZ

Pamoda Wijetunge

Australia is one of the world’s hot spots for energy innovation. Once a pioneer in deploying renewable energy in remote and isolated power systems on the western side of the country, the focus here has recently shifted to the east coast, where the nation’s largest cities are interconnected with a robust grid facing its own unique set of challenges.

As my colleague Peter Asmus noted in a blog published this past May, Australia is leading the way with market conditions ripe for the creation of virtual power plants (VPPs). While these aggregations of distributed energy resources (DER) come in various forms, AutoGrid is now offering a more advanced version of VPPs ideally configured to meet the needs of Australia’s evolving energy markets.

Wild and Getting Wilder: The Australian Energy Crisis
Today’s unpredictable extreme weather events take their toll on power grids and the availability of both traditional and newer energy sources. Demand patterns are also changing as domestic heating and transportation quickly electrify. Throw in Australia’s highest per capita rooftop solar PV systems, bushfires and rolling blackouts, and the need for new solutions becomes urgent. These factors lead to electricity price volatility, rising wholesale energy costs and increased competition for customers among energy retailers. The recent shift in market rules from a 30-minute to a 5-minute bid window greatly accelerates trading volume and pricing risks (and more importantly, opportunities.)

As an example of how wild things can get, consider this. On June 15, 2022, the Australian Energy Market Operator (AEMO) took the unprecedented step of suspending the entire National Electricity Market (NEM) spot market. This move was the climax of a multitude of events causing wholesale electricity prices to skyrocket. When AEMO set a price cap, generators decreased electricity production and the country went into a supply crisis. AEMO then suspended the market and ordered generators to produce enough to meet the demand. The June Market Freeze is just one example of the volatility that market participants deal with every day.

Evolving on the Edge: Mixed-Asset VPPs
The solution? Mixed Asset, Multi-Market VPPs. Let’s start with the concept of Mixed-Asset VPPs. VPPs started in the U.S. with demand response and in Europe with 24/7 service to overcome intermittent renewables. Today, advances in artificial intelligence and market reforms are enabling any DER asset – whether load, supply or energy storage – to be aggregated together into a nimble, flexible, synergistic resource. VPPs are moving in this direction globally and can scale as long as digital platforms can accommodate the intricacies of local energy markets and support open standards.

But controlling multiple DER assets is only half the battle. Today’s VPPs also have to deliver revenue from multiple wholesale markets, while also co-optimizing for behind-the-meter local customer value streams.

The goal is to extract the maximum flexibility from each type of DER asset – whether a heat pump, EV charger, battery or rooftop solar PV system. Not all assets are created equal. Some DERs are a better fit for contingency frequency services. Others may be better suited for addressing voltage deviations or simply providing capacity.

No Electrons Left Behind
AutoGrid’s Flex™ software expands your portfolio of energy flexibility by aggregating every house, C&I premise, renewable asset, battery, and electric vehicle onto one platform. With a mixed-asset virtual power plant, you can take advantage of portfolio-level benefits, such as increased capacity, greater flexibility availability, reduced risk, and economic optimization of your portfolio.

By leveraging advanced predictive controls, Flex computes available flexible capacity at each service point for each five-minute market interval. It ensures the best economic outcome for market participants (and their customers) by optimizing your DER portfolio across all market products while also delivering on local value streams, such as customer bill savings.

The Bottom Line?
Don’t just rely on regulators to fix the problem next time. Hedge your exposure with AutoGrid’s VPP platform if you want to reduce customer churn, mitigate energy price volatility and maximize new revenue streams from growing portfolios of DER assets. Unlocking the full value embedded in DER assets is only possible with advanced and open-source digital software platforms. Now is the time to step into the future with Mixed-Asset, Multi-Market VPPs.