FAQS

1. What is a virtual power plant? How does it work?

A virtual power plant is created by a network of home solar photovoltaic (PV) and battery systems all working together to generate, store and feed energy back into the grid. This is similar to the ‘big battery’ at Jamestown, but instead of being in one location, the systems are spread over thousands of houses.

Energy from the home solar and battery systems installed as a part of this virtual power plant will provide electricity for the house on which they are installed. Any excess energy generated by the system will be automatically dispatched to the grid. This dispatched energy will be centrally controlled to meet the needs of the grid, providing additional energy to the rest of the state, when it is required.

2. Who can take part in this project and when?

50,000 home energy systems - comprising 5kW solar photovoltaic (PV) and 5kW/13.5kWh Powerwall 2 batteries, plus a smart meter - will be progressively rolled out over a 4.5 year program.

Starting with those who need it most, the program will begin with trial installations on 1100 Housing Trust homes. Initial phase 1 installs have already occurred, and will continue throughout 2018 and 2019.

The first installs in private properties will commence from 2019 subject to the success of the trial phases.

How installations will be prioritised will be determined during the trial phases. Criteria may include geographical spread for installation efficiency combined with optimising the security of the distribution network.

Tesla will review all properties to determine whether or not they are able to support a system and participate in the program. Some of the key considerations are whether or not the property is physically able to accommodate the solar PV and battery, the orientation of the property for solar access, and any potential shading of the solar PV. Renewal SA will also provide advice on suitable properties to ensure installations complement existing regeneration programs.

Households interested in participating in the program should register their interest at www.virtualpowerplant.sa.gov.au.

Once you have registered your interest you will receive periodic updates regarding the rollout of the virtual power plant. A registration of interest does not guarantee that a system will be installed at your home, or that a system will be installed at your home in advance of others.

If public interest extends beyond our initial estimates, the program may be able to be extended further.

3. How big is this virtual power plant?

A 250MW/650MWh power plant (which is how big the virtual power plant will be at the end of the 4.5 year schedule for installation of 50,000 systems) can meet around 20% of South Australia’s average daily energy requirements (or power approximately 75,000 homes).

By comparison, it is 2.5 times the size of the world’s largest lithium-ion battery, the ‘Tesla Powerpack (100MW/129MWh).

4. What percentage of a household’s overall energy needs will the energy system supply? How much will I save?

The 5kW solar PV and 5kW/13.5kWh Powerwall 2 home energy system is expected to provide a significant proportion of a household’s energy consumption.

A self-powered home combines solar energy and Powerwall to independently power a home day and night. During the day, solar panels may produce more energy than the home uses. Powerwall stores that excess solar energy and makes it available on demand, even after the sun has set. Through the Tesla app, households will have full visibility of their energy use.

If the household consumes more electricity than is available from the energy system, it will draw from the grid instead.  All electricity consumed by the household (whether from the energy system or the grid) will be metered and charged for through the household electricity bill. The benefit for the household in being a part of the virtual power plant is that it will be charged a significantly reduced rate for its electricity use.

Analysis by Frontier Economics shows the virtual power plant is expected to lower energy bills for participating households by 30%. The overall reduction in energy bills will vary depending on individual circumstances, including the type of plan that they are currently on, and the level of household energy consumption.

5. Who will be sending the electricity bills, Tesla or the government?

Tesla and the South Australian Government will be seeking a retailer from the market to join the project as the official Program Retailer. This retailer engagement process will begin shortly with the aim of a Program Retailer being in place from mid-2018. Electricity, and all communications regarding bills will be through the Program Retailer.

6. What if power prices reduce over time anyway?

The intention is for the program to always provide customers with more affordable electricity, not to lock customers in to an arrangement that would negatively impact them.

Tesla and the South Australian Government will be engaging with the electricity retail industry to identify the most appropriate retailer to ensure program customers benefit from the cheapest electricity in the State. More information will be available in mid-2018 when a Program Retailer has been engaged.

7. Why are they being installed into Housing Trust homes initially?

This program will first lower electricity costs for those who need it most. If the program is extended beyond the initial trial phases, through the use of a Program Retailer, the power generated from the energy systems on Housing Trust homes will be aggregated and the benefits distributed to all Housing Trust tenants who sign up with the Program Retailer (even those whose homes aren’t suitable for the installations).

8. Is participation in this program compulsory for all Housing Trust tenants?

No. The initial phase will see 1100 systems installed at Housing Trust properties. Should the project move to the final phase, it is envisioned that all Housing Trust owned properties that are suitable for installation of the home energy system will have them installed.

Tenants can choose not to opt into the retailer program (or opt out later). In this case the tenant’s electricity, and all communications regarding their bills will continue to be through their selected retailer as a normal market arrangement.

Housing Trust tenants that don’t want the systems installed at all will be able to advise Housing SA of this so that their concerns can be taken into consideration. It should be noted that by choosing an alternate retailer, the tenant would miss out on the reduced rates associated with participation in the program.

9. Who will own and control the virtual power plant?

The virtual power plant will be privately owned and operated – the process for financing the majority of the costs of the program will commence later this year. Approximately half of all systems will be installed on Housing Trust properties, with the South Australian Government providing access to these properties to fast track the deployment of the virtual power plant.

Tesla is responsible for the installation of the systems and will liaise directly with households although, in some cases households will be contacted by Housing SA first to discuss suitability of property. Once the systems are operational, most ongoing communications regarding the virtual power plant will be made through the Program Retailer.

10. How much is this going to cost households?

All systems installed at Housing Trust homes will be done at no cost to tenants.

All electricity consumed by the household (whether from the energy system or the grid) will be metered and charged for through the household electricity bill at a rate significantly below those available in the market.

Analysis by Frontier Economics shows the virtual power plant is expected to lower energy bills for participating households by 30%. This is based on a comparison against the average price currently being paid by customers in South Australia (approximately 40c/kWh).

For privately owned properties opting in during phase 3 or beyond, packages may be available that provide options for upfront payment in exchange for further reductions in energy bills, or transferred ownership of the systems to the household after an agreed period of time. This will be determined during the initial trial phases of the project.

11. Do all 50,000 homes need to be signed up to the program before residents will see reduced energy bills?

No. Although 1100 homes will have the home energy systems installed as a part of the trial phases of the program, their power will be aggregated through the virtual power plant software and the benefits distributed to all Housing Trust tenants that sign up. This will model and demonstrate the expected operation and value of the broader system and provide data to stakeholders and investors about how the virtual power plant will work.

It is also expected that the selected Program Retailer will be able to offer a transitional retail offer to households that have registered interest in the program, providing some savings to these households even before they are incorporated into the program.

12. Will it work in a blackout?

Yes, this is an additional benefit for households that have the systems installed. Powerwall can detect an outage, disconnect from the grid, and automatically restore power to your home in a fraction of a second. As long as the battery has storage in it at the time, you will not even notice that the power went out. Your lights and appliances will continue to run without interruption.

13. What will the virtual power plant project actually achieve?

The virtual power plant will benefit all households and businesses in South Australia.

As a whole, the virtual power plant could add up to a new 250MW/650MWh, dispatchable power plant that can meet around 20% of our state’s total average daily energy requirements, adding competition to the market and putting downward pressure on everyone’s energy bills. In addition, the virtual power plant will provide security services through the distribution network (like the Tesla Powerpack ‘Big battery’), helping keep the power on during events or disturbances in the network.

The key objectives of the virtual power plant are to:

  • Provide significant cost savings to consumers participating in the program
  • Demonstrate the ability of a virtual power plant to deliver savings to households and improve the resilience of the grid
  • Introduce competition into the South Australian energy market, placing downward pressure on energy prices
  • Establish a new, dispatchable renewable energy power plant, providing energy when it is most required

Provide significant employment opportunities for installers and opportunities for involvement by South Australian manufacturers.

14. How much is the government spending on the virtual power plant?

The virtual power plant is being fast-tracked by a $2 million grant and $30 million loan from the Renewable Technology Fund. The total value of the project is currently estimated at approximately $800 million which will come from investors. Proposals under the Renewable Technology Fund were received through an open call for proposals in September 2017. The virtual power plant proposal by Tesla, in addition to a range of other projects, represented significant value and warranted investment by the Fund.

15. How does this work with the new energy discount offer with Origin Energy?

The Government of South Australia recently negotiated a reduced rate for concession holders in South Australian with Origin. Further information regarding this offer has been posted to all concession holders, with further information available here - www.originenergy.com.au/originvaluesa.

Households that have signed up to the energy discount offer with Origin are still able to participate in the virtual power plant program. Those customers are already receiving discounted electricity, and we anticipate further reductions under this new arrangement.

16. How will this benefit other people having difficulty paying electricity bills?

The virtual power plant itself will benefit all households and businesses in South Australia. As a whole, the virtual power plant could add up to a new 250-megawatt, dispatchable power plant that can meet around 20% of our state’s total average daily energy requirements, adding new competition to the market and putting downward pressure on everyone’s energy bills.

During phase 3 of the virtual power plant project, the general public will also be able to opt in to the program. Households interested in participating in the program should register their interest at www.virtualpowerplant.sa.gov.au.

17. What other assistance is available for paying energy bills?

Eligible South Australians on low or fixed incomes can apply for help with the cost of energy bills. The concession amount is indexed each financial year. For 2017-18, you may be eligible to receive up to $217.90 to cover both electricity and gas payments (including LPG bottled gas). Refer to www.sa.gov.au/topics/care-and-support/financial-support/concessions/energy-bill-concessions for more information.

It is also strongly recommended that households contact their retailer when facing difficulty paying electricity bills. Retailers will work with customers regarding repayment of their bills, and may be able to offer a discounted rate if requested.

18. Can households that already have solar still be involved?

Households that already have solar may be able to participate in the program at a later stage. Tesla, in conjunction with the Program Retailer will review all properties to determine whether or not they are able to support a system and participate in the program.