Discover Energy and VPPs

Virtual power plants and real benefits

Demand response at small scale is a hot topic and one in which Discover Energy’s Chris Cormack is leading the charge.

EVERYONE LIKES A REWARD and Discover Energy

likes being the provider, delivering benefits to Virtual Power Plant customers who shift electricity demand to alleviate pressure on the grid. Everyone’s a winner.

And that was the topic of Chris Cormack’s address at the Smart Energy Conference in May in which he presented the bright future for the community and the grid as VPPs become more widespread, and how small-scale networks like Discover Energy’s have the smart technology to manage responses while providing alternative generation sources.

It’s a future that could not be too far off, given AEMO’s projections that half of all Australian households will have distributed energy resources by 2030.

“If that does materialise we will be pretty happy,” said Chris who across two decades has held senior roles at AGL Energy and AEMO at the cutting edge of the energy transition.

He’s now overseeing the drive to position Discover Energy at the forefront of the market, and his enthusiasm for all things storage and VPPs is palpable. The company’s VPP program currently boasts more than 2,000 customers across the mainland states and, since its 2018 launch, has enjoyed a meteoric rise with month-on-month growth averaging 23 per cent and year-on-year growth at a phenomenal 539 per cent.

One of the biggest selling points in the VPP experience is the increasing value of solar and battery storage counterbalanced by the decreasing value of feed in tariffs as experienced by customers across the board, Chris said. “Getting a battery actually makes sense these days but then by being able to trade excess capacity, households are getting a better return on investment, and those who work with companies like Discover Energy and become part of a VPP can pay off the battery sooner.”

Importantly they are also providing services to the grid, he said “FCAS (frequency control ancillary service) is an important service that effectively keeps the grid running at those really important times when there are interconnector issues, and voltages and frequency drops.

“So VPP participants are getting paid while also providing a social good – a social service.

“This is the future for the industry.”

How it works

Discover Energy runs a similar model to One Stop Warehouse (both entities founded by Anson Zhang and Jeff Yu) by relying on a wide network of independent installers to present the case and close sales of the solar and battery system, and facilitate the finance associated with that.

The Discover Energy VPP model’s energy plan includes the ability to manage trading using sophisticated algorithms and integrations with inverters, with a 50:50 profit share.

“The VPP is effectively open to a number of different technologies, about 80 per cent of the inverter and battery brands on the market integrate with our API (application programming interface), this is the software that talks from ‘our side’ to the actual battery inverter,” Chris explained.

“Although we’ve developed a way to integrate with the majority of brands on the market we’re also trying to be an open source by allowing our customers to bring their batteries and we provide

Chris Cormack addressed the Smart Energy Conference in May, describing a bright future for the community and the grid as VPPs become more widespread

the VPP plan and effectively allow them to trade the capacity of their battery.

“The algorithm discharges the battery down to the minimum set by the battery owner and the rest can be traded, or customers can trade energy on their own behalf.

“We are now optimising things like network tariffs and working with different distribution networks around Australia so batteries can charge or discharge from the network when it makes [financial] sense,” he said.

Demographics

The VPP community is quite diverse, he said, and becoming more widespread with most of the big retailers now operating some sort of VPP.

“Our customers are more energy engaged, generally these are people who have probably had solar for a while and who then made the big step of installing a battery and want to play a part in that kind of energy transition.”

Cost curves

Discover Energy is working with battery manufacturers to reduce costs, and collaborates closely with One Stop Warehouse to facilitate the downward trend.

“We are keen to see battery prices fall and that is slowly starting to occur but it needs to accelerate for the investment to make more sense for consumers,” Chris explained.

The team also works with a network of installers and finance partners to put together attractive offerings for consumers to hasten the transition, and is exploring opportunities to bring more customers on to FCAS.

More to come

Discover Energy has also turned its sights to the role of electric vehicle chargers (see page 6) and beyond that is focusing on EV charging demand response for hot water, heating, pool pumps and more.

“We are really integrating much more of what are controllable flexible assets and in terms of that being the future it is conceivable that 20 or 30 per cent of consumers would have large enough flexible assets to want to be part of something like a VPP,” Chris said

We canvassed his opinion on the short-term outlook for the industry under the ALP.

“Their electric vehicle policy is a bit more expansive and we definitely support the proposal for more community batteries and are working on several such projects right now,” Chris said.

“In all I believe the renewable energy transition will accelerate much more quickly under Labor.” www.discoverenergy.com.au

IMAGE: EVAN MACLEAN