The Australian Renewable Energy Agency (ARENA) recently announced that plans are underway for Tesla to provide 1,200 Powerwall 2 batteries to local electricity provider Simply Energy for the creation of an 8MW virtual power plant in the city of Adelaide.

The Adelaide VPP is the fourth virtual power plant announced in Australia over the past two years, the biggest of which being Tesla’s own initiative to construct a 50,000-strong 250 MW/650 MWh system in SA. The 1,200 households in Adelaide’s VPP will be able to acquire Tesla Powerwall 2 home energy storage units at a 40% discount due to subsidies. The batteries, working together with residential rooftop solar panels, are estimated to save up to 20% of Adelaide residents’ power bill, according to a Renew Energy report.

Apart from helping residents save on their electricity bills, Simply Energy CEO Carly Wishart stated that the proposed VPP is also expected to provide backup electricity to other areas. With the system in place, the 8MW VPP in Adelaide would be able to function similar to conventional diesel-powered gas or turbine plant. The Adelaide VPP can be an alternative to facilities like the Pelican Point plant in South Australia, a facility tasked to meet the area’s electricity needs when the grid needs backup.

“Simply Energy is proud to be able to deliver this innovative solution that helps our customers reduce their energy costs while also providing additional energy security in South Australia,” Wishart said.

Once completed, the proposed 8MW Adelaide virtual power plant will feature Australia’s first digital marketplace for renewable energy. The digital marketplace, dubbed as the Decentralized Energy Exchange (deX), will allow users to purchase and sell electricity generated by residential battery storage units and rooftop solar panels during peak periods.

In a blog post about the project, ARENA CEO Ivor Frischknecht stated that the proposed Adelaide VPP will be a good opportunity to demonstrate the viability of using an aggregated network of home batteries as a means to improve grid stability. The ARENA CEO is also optimistic about the potential of the deX model.

“This deployment of a further 1200 batteries into South Australia’s grid will deliver benefits to both individual customers and energy networks and demonstrate a potential model for how distributed energy resources can be operated at large scale in the future to help reduce energy prices. This trial will also demonstrate the commercial benefits of including a virtual power plant into a distributed energy market platform, such as deX.”

As we noted in a previous report, Tesla’s planned 250 MW/650 MWh VPP for South Australia recently met a possible roadblock, after newly-elected South Australia premier Steven Marshall stated that his government does not have any plans to support the project. Amidst criticisms, however, Marshall eventually took a softer stance on the Elon Musk-led company’s VPP plan a few days later, stating that he would not be putting a stop to renewable energy projects that were started by the previous administration, such as Tesla’s 50,000-strong virtual power plant.