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Virtual Power Plants Explained

In this article we explore the inner workings of VPPs in an attempt to help homeowners decide if this system will benefit them.

Is a Virtual Power Plant (VPP) Right for Me?

So, you’ve got your solar and battery system – check! Now you’re thinking about joining a VPP, but don’t even know where to begin? Well, this article will help you navigate the process – exploring the concept of VPPs, what they are all about, how they can differ from one another and helping you choose the right option so you can start earning some extra cash!


What is a VPP?

A VPP is a collection of home solar batteries that can provide on-demand battery power to support the electricity grid in times of need. Basically, when the grid needs more power, it is drawn from home batteries instead of burning more fossil fuels. In return, households receive a payment.

The objective of a VPP is to help stabilise the grid, prevent blackouts, and lower overall electricity costs. This is achieved by distributing the power generated by the individual batteries and is generally done during peak times of the day where a lot of electricity is needed at once. An example of a peak time is after work when the majority of people are in their houses using electricity to cook and clean.

As a household, you don’t need to do anything but sign up and receive your payments! VPPs are controlled via a web-based network, so everything happens automatically.

VPPs a win-win-win-win; the grid gets the power it needs, less fossil fuels are burnt, energy prices remain lower and participating households receive extra cash!


How do VPPS work for homeowners?

ShineHub offers a bunch of different VPP options, but there’s one thing they all have in common – the customer always wins. Every time that the grid draws power from a household’s battery, they receive a payment in return. The payment received will always be above the average price of electricity.

There are other VPPs available that operate under different structures. Some schemes offer a one-off upfront payment for joining, but do not offer ongoing payments, for example. It’s important to understand the different VPP options available and choose one that offers you maximum benefit now and into the future.


Why should I join a virtual power plant?

Well first and foremost – VPPs are a great opportunity for you to make some extra money from your household battery. But, VPPs also help benefit others in your community. Peak energy prices make electricity more expensive for everyone. By providing a lower cost alternative with on-demand battery power, VPPs help to bring down costs for everyone - not just those who have solar.

VPPs also have a vital role to play in our transition to 100% renewable energy. In order to make 100% renewables work, there needs to be renewable energy available on-demand - to fill the gaps that happen when the sun doesn’t shine or the wind doesn’t blow. VPPs are a solution to this.


How do I apply for a VPP in SA, VIC, or NSW?

First of all, you need to make sure you have a compatible battery. At the moment, ShineHub’s VPPs are only compatible with Alpha-ESS batteries.  

The rest is easy – it’s free to join, there are no contracts involved and we do all the hard work for you! Just contact one of our solar experts by clicking here and we can get you all set up.

VPPs are managed online. Right now, you can login to ShineHub’s online portal to monitor your energy usage and storage. When you sign up to a VPP, you will also be able to see each time your battery utilised by the grid alongside the payments you receive as a result. 


ShineHub’s VPP options in SA, NSW and VIC

1.    ShineHub Community VPP, with any retailer of your choosing

·      Every time power is drawn from your battery, you receive a payment from ShineHub

·      The payment amount is fixed at 0.45/kWh

·      On top of that, you also receive your normal solar feed-in tariff from your energy retailer (usually around $0.10/kWh to $0.15/kWh)

·      You can be with any energy retailer of your choosing, but you must have an Alpha-ESS battery


2.    Virtual Power Plant offer in partnership with Powershop

·      Every time power is drawn from your battery, you receive a payment from Powershop

·      This payment is a variable market price which is between  $7.052/kW

·      The variable price will always be higher than the going rate for power

·      This option is only available for Powershop customers with an Alpha-ESS battery 


ShineHub’s VPP in NSW, in partnership with Ausgrid

·      Every time power is drawn from your battery and sent to the grid, you receive a 0.45/kWh payment from ShineHub

·      On top of that, you also receive your normal solar feed-in tariff from your energy retailer (usually around $0.10/kWh)

·      You can be with any energy retailer of your choosing.

Want to learn more about how you can reduce, or even eliminate your electricity bills with solar, batteries, and VPPs?  Book a time to chat with us here and in a few minutes you'll know if a battery or a virtual power plant is right for you.

Alex Georgiou
Alex is a home energy expert with experience across virtually every area of the industry, ranging from energy efficiency and smart home gear to the latest solar and battery technologies. As co-founder of ShineHub, he is responsible for delivering the best digital experience in the industry for customers as well as managing customer-facing communications.
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