Virtual power plants are vital components in a grid powered by renewable energy. Popular uptake is essential to their success, but new research shows more work is needed to get consumers on board.
As Australia works towards its renewable energy targets, one solution that is emerging as a crucial component is the virtual power plant. These interconnected networks of rooftop solar panels, batteries, and other related energy technologies resemble ‘pop-up’ power plants and hold immense potential for supporting the transition to renewable energy.
But key to making these virtual power plants a reality is consumer adoption. Deakin Business School's Better Consumption Lab recently conducted a two-year study, diving into consumer attitudes towards virtual power plants and uncovering the factors that can make them an appealing proposition for all.
Lead researcher at Deakin's Better Consumption Lab, A/Prof Josh Newton, set the context for the project.
“From the perspective of achieving net-zero emissions, there's a whole range of things that need to happen to help Australia decarbonise its energy sector,” he says. “We need to shift the profile of generating capacity within Australia away from coal-fired power plants, for example, to renewables.”
A/Prof Newton says another priority is to look at what happens as households and businesses start to adopt batteries and how we incorporate them into the power grid more holistically.
“Once you start to disperse this storage capacity across a huge number of households, there are some potential benefits for being able to increase the resilience of households and the national electricity market,” he says.
“It means that if you have a power outage, households can still maintain their access to electricity, even though the broader grid has fallen over “
Another benefit is the ability to share power with other households.
“Once households sign up to a virtual power plant, the electricity they generate and store can be made available to other nearby households,” says A/Prof Newton, adding that this can provide grid resilience in the event that the grid is disrupted by storms or bushfires.
Virtual power plants can also help to balance electricity supply and demand.
“Most of these batteries are attached to rooftop solar panels,” he says. “These batteries can therefore store the power that solar panels generate in the middle of the day, when fewer people need it, and make it available for both the house and the broader community at night or first in the morning, when household demand for electricity is greatest”.
A/Prof Newton and his team were part of Project EDGE, a nation-leading project that tested several virtual power plants.
Deakin’s Better Consumption Lab assisted by studying consumer attitudes towards these virtual power plants.
“In other words, do consumers want this? Do they understand this? Are they going to sign up and join a virtual power plant?” says Dr Newton.
“Our findings were that, no, most consumers don’t necessarily want it right now. They're not leaping up and down saying, ‘Yeah, I want to join a virtual power plant’ because they don’t yet see them as an attractive value proposition.”
Consumers still need to be convinced that a virtual power plant could benefit them and their household, says A/Prof Newton.
“That's the big missing piece right now,” he says. “But our research has helped us understand the opportunities that exist to make them more attractive for people to join.”
A/Prof Newton acknowledges that while increasing awareness will be important, it is not the primary hurdle.
“The chief barrier is financial. Once a consumer sinks thousands of dollars into purchasing a battery, they become very protective of the power stored in that battery, and the financial rewards they get for joining a virtual power plant are often deemed insufficient to offset that initial outlay,” he says.
Another issue is convincing consumers to give an energy company access to the power stored in their battery.
“Building that trust is crucial, because virtual power plants require third-party access to consumers' devices and energy reserves,” he says.
A/Prof Newton says Deakin’s Better Consumption Lab is taking a holistic approach to moving towards these energy changes. "It’s important for us to try to understand consumers’ decision-making, their perceptions, and then align that with what is feasible through technology – that’s foundational for creating attractive market-based offerings," he says.
The Lab's efforts also involved students in real-life problem-solving, says A/Prof Newton:
"We had our students looking at how to encourage people to sign up for a virtual power plant as one of their assignments,” he says. “This approach not only benefits students but also helps industry partners gain fresh insights into marketing strategies.”
Looking to the future, A/Prof Newton sees transformation happening slowly but surely.
"In 50 years, the overwhelming majority of customers with batteries will probably be part of a virtual power plant,” he predicts. “It will be seen as bread and butter, a logical choice given the value it brings to households and the environment."
“But, in the next decade, the focus lies on increasing adoption rates for renewable energy technologies and virtual power plants.”
With its multi-disciplinary expertise and commitment to practical learning, Deakin University is dedicated to playing its part.
Read the full report of the Better Consumption Lab’s findings. To find out how you can study consumer behaviour and research visit our Marketing discipline page.