Peter Anderson jokes that he's allergic to paying electricity invoices.
This motivated him to have solar panels installed at his residence in Sydney back in 2019.
This was what encouraged him to take an additional step and install a battery in 2022.
"What's amusing is that our solar installer, when I initially contacted her, said, 'Actually, you don't require a battery,' " Mr. Anderson recounts with a chuckle.
What I meant was, 'It’s not about requiring a battery; it’s about showing defiance and depriving power companies of revenue.'
'All seemed reasonable'
Similar to an increasing number of customers, Mr. Anderson was drawn to purchasing a battery by the attraction of a special offer.
For him, it came from one of Australia's major energy providers, AGL, offering approximately $1,000 towards the initial expenses of setting up a system.
Mr Anderson says he consented to join what’s known as a virtual power plant, or VPP, in return.
Part of a VPP involves businesses that coordinate—or aggregate—households' batteries and other eco-friendly technology utilising these devices based on the requirements of the power grid.
Mr. Anderson mentions that during the initial year following his enrollment in the program and receiving the battery, he hardly observed any difference.
He mentions that everything was quite gentle and laid-back.
It went like this: 'Here’s the deal, we assure you that we won’t do those things; instead, we pledge to perform these actions. We’ll deduct a grand from the price of the battery and enroll you in a five-year plan to ensure your participation for half a decade.'
The concept behind it was to assist in stabilising the grid during chaotic moments.
It all appeared quite sensible.
In the initial year, I doubt they even laid a hand on the battery.
Everything shifted dramatically about a year later when Mr Anderson began observing significant changes.
A shocking surprise
To begin with, he asserts that AGL thrust upon him a complex form of dynamic pricing called a demand tariff, without sufficient prior notice.
With a demand tariff, customers get billed based on their highest half-hourly usage of electricity drawn from the grid over an entire month.
These measures aim to deter individuals from utilizing electricity from the grid during peak hours; however, both consumer advocates and certain regulators argue that these policies are confusing, unproductive, and unjust.
AGL refuted the claim that they failed to offer sufficient notice, emphasizing that Mr. Anderson had received written correspondence alerting him to the upcoming changes beforehand.
In addition, Mr Anderson claims that AGL also began "depleting" his battery occasionally, which made him purchase electricity from the grid during high-price periods.
Adding to his frustration, he states that the modifications resulted in a double blow—by compelling him to purchase electricity from the grid during high-demand periods, he asserts that this increased his expenses due to the demand tariff.
AGL has disputed this claim.
"They changed the way they use the battery," he says.
It started with small sips occasionally but quickly turned into gulping it all until only five percent was left, basically draining it completely.
You could trace their actions back to the time when prices in the national electricity market surged dramatically.
Gabrielle Kuiper is a consultant who specialises in the adoption and integration of solar panels and batteries.
She says virtual power plants hold huge potential as the energy transition gathers pace and the number of households and businesses participating in them could eventually number in the millions.
And she reckons policies such as the pledge by the federal Labor government to subsidise the cost of household batteries is only likely to supercharge this trend.
[Battery grab — Solar numbers]
[Battery grab — Battery numbers]
"Currently, more than one-third of Australian households have installed rooftop solar systems; however, fewer than 10 percent have adopted battery storage solutions," Ms Kuiper clarifies.
When we amass numerous batteries along with many electric vehicles capable of returning energy to residential areas or the power grid, we will witness this transforming into a substantial component of the electrical network.
In whom to trust?
However, Ms Kuiper says experiences such as Mr Anderson's should serve as a warning about the dangers of poorly designed or managed VPPs.
For such schemes to work, she says, consumers have to be able to trust them.
"We know that there's been issues for decades now around trust in electricity, full stop," Ms Kuiper says.
"You know, the big energy retail companies, I think, are rated below banks even in terms of consumer trustworthiness.
"So, yeah, there are real challenges there."
Ms Kuiper says regulators need to ensure consumers are getting the right advice and being properly protected.
She believes there isn't enough data available to assist the typical homeowner in understanding and maneuvering through the market.
She is concerned that without this occurring, customers might not get to enjoy numerous advantages from their personal investments.
She mentions this as a newly developing concern.
It's crucial for the Australian Energy Regulator to step up and enhance transparency while providing additional details to consumers.
"I think the risk is that the aggregators, particularly the large ones, like the four main retailers, earn a very high proportion of the profits from household and businesses' energy technologies, particularly batteries, and households and businesses don't end up with good value from participating in those VPPs."
Energy giant steadfast
AGL, which is Australia's biggest energy retailer with more than 4 million customers, defended its actions in relation to Mr Anderson and its management of the VPP.
A spokeswoman rejected claims AGL ever entirely depleted the batteries of participating households, saying it was the company's policy to always leave at least 20 per cent of a charge remaining.
The spokeswoman also rebuffed suggestions Mr Anderson's tariff had been changed as part of his participation in the VPP scheme.
She mentioned that the alteration in tariffs was a distinct issue.
The spokesperson admitted that certain clients were shifted to demand tariffs in regions where applications were made, which encompasses large parts of New South Wales.
The spokeswoman highlighted that it was actually the pole-and-wire businesses—not the retailers—that initiated the tariff modifications initially.
In contrast, retailers simply reflected these changes to customers and consistently aimed to guarantee proper notification was provided.
Amid a backlash to the spread of demand tariffs, it is understood AGL is no longer applying the charge.
Instead, the company has said it is "endeavouring to maintain" customers on their existing tariffs such as flat-rates and time-of-use charges when their meters are replaced.
"AGL proudly has one of the largest growing virtual power plants in Australia," the spokeswoman said.
"Customer participation in the VPP is entirely voluntary, and by enrolling in our VPP, customers receive payment for allowing us to use their battery in this way.
A participant's battery in a VPP is never completely drained.
Reality versus rhetoric
For Mr Anderson, his own experience was bad enough to leave the VPP scheme.
In future, he says he'll manage his own energy needs.
"This is an obvious misuse of the virtual power plant solution," he believes.
"They're draining the battery to service other clients and you're left in the lurch.
Now, I reckon if you read the small print… you won’t find any guarantees for that.
However, there’s the manner in which they promote it and the attitude with which they do so, which starkly contrasts their previous behaviour.
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