In a major move just before Christmas, the Australian Energy Market Commission (AEMC) introduced a groundbreaking reform allowing virtual power plants (VPPs) to compete directly with large-scale generators in the Australian energy market.
This new determination is expected to result in significant cost savings, lower emissions, and reduced energy prices for consumers. By integrating VPPs, industrial demand response systems, and aggregated batteries into the market, the reform creates a more streamlined operation, enabling these resources to participate alongside traditional power stations.
Historically, challenges arose due to the lack of mechanisms to forecast how these distributed resources respond to daily price fluctuations, which in turn raised operational costs for the Australian Energy Market Operator (AEMO).
AEMC Chair Anna Collyer emphasized the transformative nature of the reform, comparing it to providing the electricity system with a pair of “glasses” that allows it to see and respond to the actions of retailers and customers previously invisible to the market.
“This reform enhances market efficiency by creating new opportunities for both energy suppliers and users to participate in ways that weren’t possible before,” Collyer said.
