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Tesla works with Australian government to build virtual power plant

Steve Rogerson
February 13, 2018
The Australian government is working with Tesla to create what it claims will be the world’s biggest virtual power plant. The plan is to roll out a network of at least 50,000 home solar and battery systems across South Australia.
Beginning with a trial of 1100 Housing SA properties, a 5kW solar panel system and 13.5kWh Tesla Powerwall 2 battery will be installed at no charge to the household and financed through the sale of electricity.
Following the trial, which has now started, systems are set to be installed at a further 24,000 Housing Trust properties, and then a similar deal offered to all South Australian households, with a plan for at least 50,000 households to participate over the next four years.
“What this project will do is connect thousands of solar and battery systems to make one giant, coordinated virtual power plant,” said energy minister Tom Koutsantonis. “Once again South Australia is at the global forefront of renewable energy and storage technology. Labor will always stand up for South Australians, and this project will lower power bills by 30 per cent for those that need it most, before being made available to a broader network of customers.”
Tesla is to establish a service hub at Tonsley so local technicians can monitor and service the powerpacks in Hornsdale, along with the superchargers that have been installed across the state, and the residential Powerwall installations. The hub has the potential to service Tesla batteries throughout Asia Pacific, and will create additional local jobs.
A registration of interest was opened this month for members of the public who wish to participate in the programme. The government is due to release a market notice for a retailer to deliver the programme, with a preference of bringing a new player into the market.
Analysis by Frontier Economics shows the 250MW plant is expected to lower energy bills for participating households by 30 per cent. Additionally, all South Australians will benefit from the increased generation in the South Australian energy mix, with lower energy prices and increased energy stability.
“We know that people in social housing can often struggle meeting their everyday needs and this initiative will take some pressure off their household budget,” said social housing minister Zoe Bettison. “I am very pleased that this government is able to back South Australia’s housing trust tenants through providing cheaper power through this exciting programme.”
The state government is assisting the rollout with a $2m grant and $30m loan from the Renewable Technology Fund. This announcement is the next phase in the government’s Energy Plan, which is already making South Australia more self-sufficient through the world’s largest lithium ion battery and the solar thermal plant.
The virtual power plant will be the biggest of its kind in the world, eclipsing Canberra’s Reposit Power virtual power plant, which connects 250 homes and businesses to the grid.
A recent report by the Australian Energy Market Commission said that energy prices in South Australia were expected to fall by approximately $300 over the next two years for the average household.
“More renewable energy means cheaper power for all South Australians,” said premier Jay Weatherill. “My government has already delivered the world’s biggest battery, now we will deliver the world’s largest virtual power plant. We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefitting with significant savings in their energy bills. Our energy plan means that we are leading the world in renewable energy and now we are making it easier for more homes to become self-sufficient.”