Cost-Benefit Analysis of a Virtual Power Plant Including Solar PV, Flow Battery, Heat Pump, and Demand Management: A Western Australian Case Study

Achieving the renewable energy integration target will require the extensive engagement of consumers and the private sector in investment and operation of renewable-based energy systems. Virtual power plants are an efficient way to implement this engagement. In this paper, the detailed costs and benefits of implementing a realistic virtual power plant (VPP) in Western Australia, comprising 67 dwellings, are calculated. The VPP is designed to integrate and coordinate rooftop solar photovoltaic panels (PV), vanadium redox flow batteries (VRFB), heat pump hot water systems (HWSs), and demand management mechanisms. An 810-kW rooftop solar PV system is designed and located using the HelioScope software. The charging and the discharging of a 700-kWh VRFB are scheduled for everyday use over a year using an optimization algorithm, to maximize the benefit of it for the VPP owners and for the residents. The use of heat pump HWSs provides a unique opportunity for the residents to save energy and reduce the total cost of electricity along with demand management on some appliances. The cost-and-benefit analysis shows that the cost of energy will be reduced by 24% per dwelling in the context of the VPP. Moreover, the internal rate of return for the VPP owner is at least 11% with a payback period of about 8.5 years, which is a promising financial outcome.