Work

Impact of battery storage on residential prosumers considering residential virtual power plants: an Australian case study

Year: 2026

Type: article

Abstract: As energy systems transition toward decentralization and decarbonization, residential prosumers are playing an increasingly vital role in grid stability and energy market participation. However, the economic viability of investing in battery energy storage systems (BESS) and joining virtual power plant (VPP) schemes remains uncertain, particularly under real-world operating conditions where battery dispatch is optimized for grid objectives rather than prosumer benefit. Although a growing body of research examines VPP optimization and grid-level services, relatively limited attention has been given to evaluating the economic feasibility of prosumer participation using empirical operational data.. This study addresses that gap by using empirical data from a residential VPP trial involving 750 Australian households to evaluate the economic performance and dispatch characteristics of residential battery systems under real VPP control. A clustering analysis is used to characterize battery operational patterns, and a techno-economic framework assesses investment viability across twelve scenarios that vary electricity tariff structures and battery degradation assumptions. Financial performance is evaluated using payback period, net present value, and internal rate of return. The results show that VPP participation combined with government incentives can reduce the payback period by up to five years and improve annual energy bill savings by approximately 20 percent. However, under low tariff conditions and without targeted incentives, residential battery adoption remains economically challenging. These findings highlight the importance of aligning VPP incentive structures with prosumer economic viability to enable sustained participation and realize broader system-level benefits.

Source: Energy and Buildings

DOI: 10.1016/j.enbuild.2026.117323

Authors: Nameer Al Khafaf, Mahdi Jalili, Richardt Wilkinson, Brendan McGrath

Institution: RMIT University

Language: English

Topic: Smart Grid Energy Management

Subfield: Electrical and Electronic Engineering

Field: Engineering

Domain: Physical Sciences

SDGs: Affordable and clean energy, Industry, innovation and infrastructure, Climate action

Open Access status: hybrid

Estimated APC paid: $4,260