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Innovative Pilot Shows Virtual Power Plants Can Play An Important Role In Managing Winter Peaks

A collaborative pilot unlocking the potential of residential solar batteries contributing to the national grid during winter peak demand has concluded, marking a technical success with valuable insights gained.

In May 2023, Ara Ake teamed up with solar-and-battery-as-a-service provider, SolarZero, to explore how solar batteries and smart technology could help manage electricity supply shortages during peak demand periods over winter. The collaboration also involved the Electricity Authority and Transpower as the system operator.

The eight-month pilot integrated distributed energy resources (DER) at 10,000 homes with solar and battery storage using Virtual Power Plant (VPP) technology. A VPP is a network of individual energy resources, such as solar panels and batteries located in different places that generate, store, distribute and manage power collectively and share the benefits.

The amount of energy that could be generated from 10,000 SolarZero customers with solar batteries adds up to 30MW that can be fed back into the grid when supply is tight.

SolarZero Chief Executive, Matt Ward, says, "During Cyclone Gabrielle, our technology proved that solar and batteries can keep the lights on at individual houses. Alongside Ara Ake, we have now proved that solar and batteries can help keep the lights on at the national level during times of extreme electricity demand."

"An incredible amount of innovation, hard work and collaboration went into developing and running this pilot, and now that the technology has been demonstrated in action, it’s essential that market mechanisms and the regulatory environment enable this technology and empower Kiwi consumers to provide flexibility to the electricity market as we are seeing overseas," adds Ward.

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"This pilot stands out as an illustration of the multiplying impact of collaboration to accelerate the development of innovative solutions to help manage real challenges, such as security of supply during winter peaks. The lessons and insights from this pilot are now available for all interested parties to use and build upon to create a more sustainable, resilient and affordable energy system," says Dr Cristiano Marantes, Chief Executive of Ara Ake.

Although there were several tight supply periods during the pilot, none were severe enough to trigger dispatch of the SolarZero VPP. However, testing proved that SolarZero's VPP product was ready to be used and could have been triggered to charge and be market-ready when needed to offer electricity back into the national transmission grid.

Transpower Executive General Manager Operations Chantelle Bramley said that as operator of the national power system, Transpower encourages greater investment by industry in flexible power system resources.

"Flexible resources like distributed energy resources (DER), fast starting generators, grid scale batteries and the ability to control demand are critical to provide the rapid response required when the power system is tight," she said. "The SolarZero initiative provides a small but important buffer against the risk of power cuts when the electricity supply is tight by providing stored electricity back into the grid. These types of pilots will pave the way for more innovation across the industry to provide the flexibility that the system needs."

As a result of the pilot, amendments to the Electricity Industry Participation Code will take effect on 1 March 2024 in respect of the dispatch notification product to reduce barriers to participation for load aggregators.

The pilot revealed further learnings that must be considered for future integration of DER as part of the electricity market, including determining where the greatest value for DER lies. This will require continuing industry-wide engagement.

A learnings and insights report from the pilot can be read here.

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