The Australian Government is supporting the Australian Energy Market Operator (AEMO) to run a virtual power plant (VPP) integration trial that will explore how a network of small-scale solar PV and battery systems can be collectively controlled and fed into the electricity grid.

Around 2.5 GW of new rooftop solar is being installed each year. Integrating this new generation capacity so that it can be managed by AEMO and contribute to, rather than detract from, grid stability is increasingly important.

VPPs can save consumers money while turning a collection of separate, fluctuating power sources into one smooth, reliable energy source. VPPs can provide increasingly valuable market services such as frequency control, reactive power and voltage control (FCAS).

The trial will focus on the capacity of VPPs to deliver energy and keep the grid stable, and AEMO will engage with other virtual power plant trials already underway around Australia.

This project is the first phase in AEMO's strategic plan to integrate distributed energy resources into energy and FCAS markets. AEMO forecasts a rapid expansion of up to 700 MW of VPPs operating in the NEM by 2022.

Through the Australian Renewable Energy Agency, the Government is providing $2.46 million towards the $4.9 million project which will run over a 12 to 18 month period.

The trial aligns with the Government's commitment to deliver more affordable and reliable power.