Exemption for entities participating in AEMO's Virtual Power Plant Demonstration Program
- Project Released: 19 Dec 2019
- Project Closes: 30 June 2021
- Contact: Julie Dixon
AEMO has established the Virtual Power Plant Demonstration Program (VPP Demonstration) to understand and mitigate system security risks that can arise from virtual power plants operating invisibly within the national electricity market. The VPP Demonstration commenced on 1 December 2019 and will run for 12-18 months.
The Commission has considered the intended benefits of the VPP Demonstration and submissions from AEMO and organisations interested in participating in it, and has determined to grant enrolled participants an exemption from the requirement to be licensed for the purposes and duration of the VPP Demonstration. The exemption has the approval of the South Australian Minister for Energy and Mining and has been granted with conditions, including an expiry date of 30 June 2021 or upon the conclusion of the VPP Demonstration (whichever is the earlier).
For the duration of the VPP Demonstration, the Commission will be gathering information about the operation of virtual power plants, with a view to determining whether the current licensing framework established by the Electricity Act 1996 (SA) will apply in the usual way upon the conclusion of the VPP Demonstration, such that these “generating plant” will require an electricity generation licence to operate in South Australia.
The Commission welcomes submissions from stakeholders about the application of the licensing framework contained in the Electricity Act 1996 (SA) to virtual power plants operating outside of the VPP Demonstration.
Current status is Initiate
AEMO has established the Virtual Power Plant Demonstration Program (VPP Demonstration) to understand and mitigate system security risks that can arise from virtual power plants operating invisibly within the national electricity market.
Commencing on 1 December 2019, and running for 12-18 months, the VPP Demonstration will assist AEMO determine what systems and capabilities are needed to support efficient virtual power plant participation at a large scale in future, while maintaining system security. It will explore the capability of virtual power plants delivering frequency control ancillary services and develop AEMO’s understanding of how these “generating plant” respond to energy market price signals.
The Commission has considered submissions from AEMO and organisations interested in participating in the VPP Demonstration, and has determined to grant enrolled participants an exemption from the requirement to be licensed for the purposes and duration of the VPP Demonstration. Based on submissions, the Commission determined that:
- A purpose-driven, time-limited exemption was an appropriate regulatory option in these circumstances, which allows the VPP Demonstration to proceed as scheduled and will assist the Commission in gaining a better understanding of the legal, operational and technical structures of virtual power plants (in parallel with the VPP Demonstration).
- Given any intending participant must go through an enrolment process managed by AEMO, which requires participants to ensure any plant, equipment and consumer interactions related to the VPP Demonstration comply with the requirements of the National Electricity Rules, National Energy Customer Framework, and other applicable laws, and the Commission has imposed a range of conditions on those participants, there are appropriate protections in place.
- To the extent that the VPP Demonstration informs operational, policy and regulatory approaches to the integration of virtual power plants, the long term interests of South Australian consumers are likely to be enhanced.
As the manager of the VPP Demonstration, AEMO will provide regular reports to the Commission on the following matters for its duration:
- Information about any new VPP Demonstration participants as their enrolment is approved by AEMO (including some corporate and technical information about the participant)
- a notification if any of the participants exit the VPP Demonstration
- information about any material changes to the scope or scale of operations undertaken by a participant, or the VPP Demonstration generally
- any indicative results or findings that become available during the VPP Demonstration that are relevant to the South Australian conditions, and
- information about any adverse incidents that impact upon consumers, participants or South Australia’s power system during the VPP Demonstration, including information on how any impacts are being rectified and the risk of reoccurrence is being mitigated.
A copy of the exemption document, which outlines the specific conditions that an enrolled participant of the VPP Demonstration must comply with, can be accessed below.
In addition, the Commission welcomes submissions from stakeholders about the application of the licensing framework contained in the Electricity Act 1996 (SA) to virtual power plants operating outside of the VPP Demonstration. Please see below details on how you may make a submission.