A battery in a garage doesn't displace a gas peaker. A battery in a virtual power plant does.
Australia's shift away from coal depends not only on solar panels and batteries, but on whether millions of households are willing to surrender a measure of control over those batteries to the collective good. The Australian Competition and Consumer Commission has warned that without a dramatic rise in enrollment in virtual power plants — networks that coordinate home batteries as a unified grid resource — the nation will be forced to build expensive gas-powered backup infrastructure, eroding the very savings the renewable transition promised. At the heart of the challenge lies something older than technology: the difficulty of persuading individuals to trust institutions with something they own, for benefits that are shared but not always visible.
- Federal rebates have tripled home battery installations, yet only 3% of east-coast households have them — and just one in four of those has joined a virtual power plant.
- The ACCC warns that without 50%+ enrollment among battery owners by 2050, Australia will spend billions on gas-powered peaker plants, pushing electricity costs higher for everyone.
- Industry insiders say the barrier is not technical but psychological — consumers haven't been shown clearly enough what they gain by handing grid operators control of their home batteries.
- A competing view holds that price signals alone may already be nudging battery owners toward grid-friendly behavior, potentially reducing the need for formal virtual power plant enrollment.
- The debate is narrowing toward a decisive fork: either trust and participation scale up fast, or expensive backup infrastructure fills the gap the coal plants will leave behind.
Australia's renewable energy transition is running into an unexpected obstacle — not a shortage of solar panels or batteries, but a shortage of households willing to let power companies control the batteries they've already installed. The Australian Competition and Consumer Commission has raised the alarm: if enrollment in virtual power plants doesn't accelerate sharply, the country faces a costly detour through gas-powered backup infrastructure.
Virtual power plants are cloud-based networks that coordinate thousands of home batteries simultaneously, orchestrating synchronized discharges during supply crunches to stabilize the grid. Participating households receive bill credits in return. Australia's 25-year energy blueprint calls for roughly 26% of households to have batteries by 2050, with more than half of those enrolled in virtual power plants. Today, only 3% of east-coast households have batteries at all, and just 24% of those have joined a virtual power plant — well short of what planners say is needed.
Robbie Campbell, CEO of Plico, which operates a 5,000-household virtual power plant in Western Australia, puts it plainly: a battery sitting idle in a garage does nothing to displace a gas peaker plant. The problem, he argues, is trust — too many in the industry have failed to explain to consumers what they stand to gain. "Show them the money, show them how it's made, and they'll stay in a virtual power plant."
Not everyone shares the ACCC's alarm. Analyst Tristan Edis argues that market-driven electricity tariffs are already nudging battery owners toward grid-friendly behavior — charging cheaply at midday, discharging at peak evening prices — without formal enrollment. He suggests the energy market operator may be underestimating how much coordination is already happening organically through price signals alone.
The disagreement carries real stakes. If the ACCC and Campbell are right, Australia must urgently convince millions of households to cede battery control to virtual networks — or accept the expense of gas backup that undermines the transition's promise. If Edis is right, the market may already be threading the needle. Either way, the coal plants are retiring on schedule, and the window for getting the answer right is closing.
Australia is racing to replace coal-fired power plants with renewable energy, but the transition is hitting an unexpected bottleneck: not enough people are letting power companies control their home batteries. The Australian Competition and Consumer Commission has sounded an alarm about what could become a costly problem if enrollment in so-called virtual power plants doesn't accelerate dramatically in the coming years.
The setup is straightforward. Over the past year, federal government rebates triggered a threefold surge in household battery installations. These lithium-ion systems store cheap solar energy generated during the day and release it after sunset, when electricity demand peaks. For the households that have installed them, the savings are real—lower power bills. For the broader grid, the effect has been measurable too: evening peak prices have fallen as reliance on coal and gas has eased. But here's the catch: most of these batteries are operating independently, each household optimizing for itself rather than for the grid as a whole.
Virtual power plants change that equation. They are cloud-based networks, typically run by power retailers or technology companies, that coordinate thousands of household batteries simultaneously. When the grid faces a supply crunch, the system can orchestrate a synchronized discharge across all connected homes, creating a single, massive power source that stabilizes the network. In return, participating households receive bill credits. The ACCC argues this coordination is essential to the nation's energy future. According to the Australian Energy Market Operator's 25-year blueprint for transitioning away from coal, around 26 percent of households will need batteries by 2050, and more than half of those—meaning roughly 13 percent of all households—will need to be enrolled in virtual power plants to keep costs manageable for everyone.
The numbers today tell a different story. Only about 3 percent of east-coast households have batteries installed. Of those battery owners, just 24 percent have joined a virtual power plant. That's a participation rate sitting well below what planners say the country needs. Without a dramatic shift, the ACCC warns, Australia will be forced to invest billions in alternative grid-scale infrastructure—particularly gas-powered generators known as peakers, which are expensive to build and operate. Those costs would ripple through electricity bills for all consumers, undermining much of the savings the renewable transition was supposed to deliver.
Robbie Campbell, chief executive of Plico, a company that installs batteries and operates a 5,000-household virtual power plant in Western Australia, frames the problem bluntly. A battery sitting unused in someone's garage, he says, does nothing to displace the need for a gas peaker plant. A battery enrolled in a virtual power plant does. Right now, he observes, most are sitting in garages. The barrier isn't technical. Campbell identifies it as a trust problem. Too many in the industry, he argues, have failed to educate consumers about how these schemes work and what they stand to gain. "Households aren't going to subsidise the grid out of goodwill," he said. "Show them the money, show them how it's made, and they'll stay in a virtual power plant."
Not everyone shares the ACCC's pessimism about the current trajectory. Tristan Edis, head of analysis at energy consultancy Green Energy Markets, points out that retail electricity offerings are increasingly designed to encourage battery owners to charge during cheap midday hours and discharge during expensive evening peaks, capturing a premium feed-in tariff in the process. These market-driven incentives are proving popular without requiring formal enrollment in a virtual power plant. Edis suggests the energy market operator's assumptions about how uncoordinated batteries behave may be too gloomy. Perhaps, he argues, Australia won't need as high a participation rate in virtual power plants as previously thought, because individual households are already being nudged toward grid-friendly behavior by price signals alone.
The tension between these views will shape Australia's energy costs for years to come. If Campbell and the ACCC are right, the nation faces a choice: either convince millions of households to hand over battery control to virtual power plants, or accept the expense of building and running expensive backup gas infrastructure. If Edis is right, the market may already be solving the problem without requiring such dramatic coordination. Either way, the window for action is narrowing. The coal plants won't wait.
Notable Quotes
A battery sitting in a garage doing its own thing doesn't displace a gas peaker—a battery in a virtual power plant does. Right now, most of them are sitting in garages.— Robbie Campbell, CEO of Plico
Households aren't going to subsidise the grid out of goodwill. Show them the money, show them how it's made, and they'll stay in a virtual power plant.— Robbie Campbell, CEO of Plico
The Hearth Conversation Another angle on the story
Why does it matter whether a battery is in a virtual power plant or just sitting in someone's garage?
Because a single battery can't stabilize the grid. But thousands of them, coordinated to charge and discharge at the same moment, can absorb or release massive amounts of power exactly when the system needs it. That coordination is what lets you avoid building expensive gas plants.
So it's not about the technology—it's about getting people to opt in?
Exactly. The technology works. The problem is trust and understanding. People don't know what they're signing up for, or they're skeptical about handing control to a power company. They need to see a clear financial benefit.
What happens if enrollment stays low?
Australia has to build more gas-powered backup plants. Those are expensive and slow to build. The costs get passed to everyone's electricity bill, which defeats the whole purpose of going renewable.
But some experts think the market is already solving this without virtual power plants?
Yes. Retail electricity companies are offering premium rates for evening discharge, which naturally encourages battery owners to behave in grid-friendly ways. It's incentive-based rather than coordinated, but it might work.
So what's the real deadline here?
The energy market operator's 25-year plan assumes half of all battery owners will be in virtual power plants by 2050. We're nowhere near that now. The longer enrollment lags, the more expensive the alternative infrastructure becomes.