A virtual power plant (VPP) is a network of distributed energy resources - such as residential solar and battery systems - that all work together as a single power plant.
The solar and battery systems can be located across many neighbourhoods and centrally controlled using WiFi technology and sophisticated software to charge or dispatch energy from the batteries.
VPP operators offer a range of financial incentives and other benefits to households in return for joining a VPP. These incentives can include discounted solar and battery systems or lease-to-own plans, reward payments, low electricity tariffs, back-up protection, and credits on your electricity bill each time your battery is used by the operator during a VPP event.
During a VPP event, the operator may discharge (sell) some of the electricity in your battery and/or charge your battery (buying electricity from the grid). Some operators may use your solar and battery system to provide grid stability services by discharging and/or charging the batteries for shorter periods at rapid speed to raise or lower the frequency of electricity in the grid. Either way, the VPP operator will seek to generate revenue from trading electricity on the National Electricity Market, and reward you and the other households enrolled in the VPP for your participation.