Impact of Battery Storage on Residential Prosumers Considering Residential Virtual Power Plants: An Australian Case Study

Abstract

Battery storage systems have recently emerged as a key solution to provide system support to ensure a secure and reliable power grid. As the cost of battery storage reduces, and with government incentives, its uptake in residential prosumers has significantly increased in recent years. The result is that customers can support the grid by joining a virtual power plant (VPP) program. In this paper, an Australian case study is presented on how participation in a VPP scheme could lead to improving the security and reliability of the grid during high demand- or contingency events. Furthermore, data-informed recommendations to policymakers are provided. The methodology focuses on optimizing residential battery storage for maximum prosumer benefits and then compared to the economic benefits of prosumers participating in residential VPP based on data analysis of the power magnitude of photovoltaic systems and battery storage of VPP trials. An economic analysis on the benefit of participating in the VPP scheme is presented using a payback period, internal rate of return and the net present value of the cashflow. The main finding is that residential VPP schemes provide a range of benefits to the grid and the prosumer. It is recommended that policymakers consider developing VPP subsidy programs and implement necessary policy directives to encourage participation in such schemes.

Keywords: Knowledge Discovery, Energy Storage Systems, Economic Analysis, Energy Consumption, Smart Meter.