A pilot virtual power plant in South Australia has produced its first progress report.

The power plant aims to boost the South Australia grid, like Tesla's battery plant has done.

Storing and releasing power has reduced residents's power bills by up to 20 percent.

Tesla’s extreme Australian makeover continues with a new “ virtual power plant ,” part of the continent's overall program to encourage these collections of renewable resources. Tesla is just the first to make and report on a virtual power plant for the program.

Like the large energy storage facility Tesla operates in South Australia, the goal of the virtual power plant is to both collect energy and store it to be fed back into the grid. The pilot virtual plant is distributed across the rooftops of 1,000 low-income homes in South Australia, and Tesla says its goal is to eventually have 50,000 solar rooftops there. That number might sound small, but South Australia only has about 1.6 million residents.

Each home has photovoltaic panels on the roof and a Tesla Powerwall system—a home solution that stores solar power from panels and releases it as needed—to store the energy. The Powerwalls are then networked to secure and share collected solar energy. Like distributed computing and cloud storage, the network is what makes a collection of individual pieces into, in this case, a “power plant.”

By hosting panels that feed into the virtual plant, low-income South Australians are seeing up to 20 percent drops in their energy bills, according to a new report from the Australia Energy Market Operator.

In a way, this single smaller plant is a test balloon that has helped both Tesla and Australia’s energy industry figure out best practices and decide what policies and procedures the overall power plant project needs.

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The Australian energy industry hopes having good market data and access to renewables storage will mean smoothing out events like, for example, black- or brownouts caused by high-cost, high-demand summer heat.

This model sounds novel, and certainly it’s high profile for Elon Musk’s company to outfit 1,000 low-income homes with panels and Powerwalls. But the distributed energy model, where consumers sell renewable energy back to the grid, has been a major incentive in the solar industry for years. In 2013, Quartz reported that U.S. power utilities were uniformly raising rates to customers in proportion to the growing number of homes with solar panels:

“And the more the utilities raise rates, the more it will make sense for customers to switch to distributed solar or use less energy, meaning less revenue for the power companies, meaning higher rates, and so on in a vicious cycle. Investors in power companies—especially the bond markets that fund their long-term capital projects—will demand more return, leading to higher rates, accelerating the ‘death spiral.’ Or at least that’s how the utilities paint the situation.”

In Australia, utilities have been thinking about and planning for this turn of events for years. Partnerships like South Australia’s relationship with Tesla, which are boosted by government investment and tax incentives, can help utilities adjust their business model so they don’t need to gouge customers as punishment for choosing renewable energy.

Utilities are often both monopolistic and publicly traded , which is a bizarre dynamic for the people whose work keeps the lights on.

Tesla’s virtual power plant is just the first, and officials say other providers are entering the Australian program now.

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