Estimating avoided dispatch costs and the profile of VPP operation a methodology report

SA Power Networks (SAPN) asked HoustonKemp to estimate the value of grid-sourced energy that would be displaced by relieving constraints in SAPN’s distribution network to allow for greater exports from solar PV and reduced constraints on the operation of virtual power plants (VPPs). We estimated this value as the marginal cost of the generator that would be displaced by allowing solar PV or VPPs to export to the network.

We also developed a model of the operation of a VPP that could be used to estimate the periods in which the operation of a VPP may be constrained under the current network configuration.

This report was submitted to the AER as part of SAPN’s revenue proposal for 2020 to 2025 regulatory control period.

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