If you’ve bought a home battery, you’ve probably come across virtual power plants, or VPPs. They promise to put your battery to work beyond your own home, usually in return for an incentive, credit or payment.
But VPPs can work quite differently, and the biggest sign-up bonus doesn’t necessarily tell you which one will make the most sense for your battery.
The best VPP comes down to a few practical questions: who controls your battery, how you’re paid when it exports, how much visibility you have over what it’s doing, and whether you can take control when you want to.
There’s also another option to compare. Amber’s SmartShift uses your battery’s flexibility differently, automatically responding to wholesale electricity prices while passing the wholesale value of your exports back to you.
What is a virtual power plant (VPP)?
A virtual power plant connects home batteries and other energy resources so they can be coordinated together.
Instead of thousands of batteries doing their own thing, a VPP operator can manage them as a fleet. When the grid needs more electricity, for example, participating batteries can be discharged together to send stored energy back to the grid.
For a battery owner, joining a VPP usually means allowing the provider some control over when your battery charges and discharges. In return, you receive whatever incentive or payment is offered under that VPP.
That deal varies between providers, which is why comparing VPPs involves more than comparing the number on the sign-up offer.
What should you look for when choosing a VPP?
There isn’t one VPP that will be best for every home battery. Before signing up, these are the parts of the offer worth looking at closely.
You’ve spent thousands of dollars putting a battery on your wall. Before giving someone else access to it, you’ll want to know when they can use it, what you’ll be paid and how much control you keep.
Does a VPP control your home battery?
Generally, yes. Coordinating batteries is the point of a virtual power plant, so the operator needs some ability to control participating batteries.
Exactly what that looks like depends on the VPP.
Before joining, check when the provider can charge or discharge your battery, whether you can override those decisions and whether you can choose how much energy you want to keep in reserve.
This can matter if you bought your battery partly to have more control over your household energy, or you want to keep some charge available for your own use.
How do VPPs pay home battery owners?
VPP payment models vary.
Depending on the offer, you might receive an upfront incentive, an ongoing bill credit, a special tariff or another form of payment for participating.
When comparing offers, look beyond the initial incentive and check what happens when your battery actually exports energy.
Your battery may be providing electricity at a particularly valuable time for the grid. Understanding what you receive for that energy makes it much easier to judge the overall VPP offer.
Is joining a VPP worth it?
A VPP can be one way to get more from a home battery.
Instead of only storing solar for your own household to use later, your battery can also provide energy back to the grid when it’s needed. In return, you receive the incentive or payment offered by the VPP provider.
Whether that deal is worth it depends on what you’re getting and what you’re giving up.
A generous incentive might appeal if you’re happy for a provider to manage your battery. Another battery owner might care more about retaining control or having their exports respond directly to changing electricity prices.
Reading the terms matters more than the VPP label itself.
Is Amber a VPP?
No. Amber qualifies as a VPP under government home battery rebate schemes, but it works differently from a traditional VPP.
Amber is an electricity retailer that gives customers direct access to wholesale electricity prices. SmartShift is Amber’s battery automation technology, which automatically manages compatible home batteries based on forecasts of household energy use, solar generation and wholesale electricity prices.
There is some overlap with what a VPP does because SmartShift can automatically charge and discharge your battery in response to conditions on the grid. SmartShift also qualifies as a VPP in relevant government scheme contexts.
The way the battery is managed, and where the financial value goes, is different from a traditional VPP.
How is Amber SmartShift different from a traditional VPP?
SmartShift builds a plan around your individual home.
It forecasts how much electricity your household is likely to use, how much solar your system is likely to generate and what’s expected to happen to wholesale electricity prices. It uses those forecasts to decide when it makes sense to charge, hold or discharge your battery.
That plan doesn’t sit there all day gathering dust. SmartShift recalculates every five minutes as your household usage, solar generation and market conditions change.
When electricity is cheap, SmartShift can charge your battery so that energy is available to use later. When wholesale prices rise, it can export stored energy you don’t need back to the grid.
And rather than receiving a fixed VPP payment for those exports, Amber customers receive the wholesale export price.
During rare wholesale price spikes, export prices can reach as high as $19 per kilowatt hour, or $21 per kilowatt hour in South Australia.
Do you keep control of your battery with Amber?
SmartShift automates your battery, but you can still take control through the Amber app.
If you want your battery to charge, discharge or preserve its charge, you can override SmartShift. You can also see SmartShift’s current plan in the app, including what it expects your battery to do over the hours ahead.
If you no longer want your battery managed by SmartShift, you can deregister it.
That combination of automation and control is useful if you want your battery responding to electricity prices without having to spend your evening watching the wholesale market yourself.
VPP or wholesale battery automation: which is better?
There are different ways of putting a home battery to work.
A traditional VPP coordinates your battery with a larger fleet and rewards you according to the provider’s VPP offer.
With Amber, SmartShift manages your battery against wholesale electricity prices, and you receive the wholesale value when your battery exports.
If you prefer a fixed or predictable incentive and are comfortable with the conditions of a particular VPP, that offer may suit you.
If you want your battery automatically responding to wholesale electricity prices while keeping the wholesale value of your exports, Amber gives you another model to consider.
Either way, don’t choose based on the sign-up incentive alone. Look at what happens to your battery after you join.
Frequently asked questions about VPPs
What is the best VPP for a home battery in Australia?
There isn’t one VPP that will be best for every battery owner. Compare how you’re paid, when the provider can use your battery, whether you can override it, any lock-in conditions, battery compatibility and what you receive when your battery exports energy.
What does VPP stand for?
VPP stands for virtual power plant. It connects home batteries and other energy resources so they can be coordinated together to respond to the needs of the electricity grid.
Does a VPP control my battery?
A VPP needs some ability to control participating batteries so they can be coordinated. How much control the provider has, when it can use your battery and whether you can override it depends on the VPP.
Can any home battery join a VPP?
No. Compatibility varies between VPPs and battery manufacturers, so check whether your specific battery make and model is supported.
Can I leave a VPP?
That depends on the provider and offer. Check the conditions attached to joining, including any minimum participation period or conditions attached to an incentive.
How much can you earn from a VPP?
There isn’t one standard amount. VPP providers use different incentives and payment structures, so check how you’re rewarded for joining and what you receive when your battery is used.
Is Amber a VPP?
Amber meets VPP requirements for government battery programs, but works differently from a traditional VPP. Instead of coordinating your battery as part of a fleet and rewarding you through a set VPP incentive, SmartShift optimises your battery around your home and wholesale electricity prices, with the wholesale value of your exports passed through to you.
What’s the difference between SmartShift and a VPP?
Traditional VPPs coordinate participating batteries as a fleet according to the provider’s VPP model. SmartShift builds an individual plan for your home based on forecasts of your energy use, solar generation and wholesale electricity prices, and Amber passes through the wholesale value of your battery exports.
Already have a home battery? See how Amber and SmartShift can put it to work on wholesale electricity prices.
