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What is a Virtual Power Plant?

A Virtual Power Plant (VPP) organises and aggregates selected distributed energy resources (DER) to generate and store electricity at a local level. Australia is home to several VPP trials, including in South Australia, Tasmania and Canberra.

Traditional power plant

A “traditional” power plant, such as a gas or coal-fired power station, provides a central point where electricity is generated. Power is then transported to local electricity distribution networks where it is used by homes and businesses.

Virtual Power Plant

A VPP can bring together roof-top solar PV, batteries and electric vehicles, or larger generation systems installed at commercial and industrial facilities and even community-scale batteries which are shared across an area.

VPPs are centrally coordinated to provide the same services to the electricity system as traditional centralised generation. This can help to keep supply and demand for electricity in balance for everyone.

Watch this short video

Learn the basics about VPPs, including how they work and how you could benefit.

The benefits of Virtual Power Plants

Cost benefits

In some cases, VPPs can help customers unlock more value from their distributed energy resources (such as their solar PV or battery) through compensation for services.


VPPs are sometimes referred to as ‘decentralised’ energy systems. These can help to keep the electricity network stable by storing and sharing renewable energy between a community. 

Cleaner energy

VPPs could allow more solar PV systems to be installed on our electricity network so we can continue to transition to a cleaner and greener electricity system.