Enel X has launched New South Wales’ first virtual power plant (VPP) under the state’s Electricity Infrastructure Roadmap, delivering flexible energy capacity to the grid by working with businesses that agree to reduce energy use at peak times.
The program, underwritten by the NSW Government, is designed to strengthen energy reliability without the cost or delay of building new infrastructure. It operates by contracting large energy users—such as manufacturers and water utilities—to temporarily reduce electricity use when demand spikes, helping avoid blackouts and keeping wholesale prices in check.
Enel X Australia Country Manager Carl Hutchinson said, “This isn’t just a win for the grid, it’s a win for NSW businesses that are stepping up to play a critical role in keeping our grid secure while earning revenue for doing so.”
The VPP has been developed to meet NSW’s Energy Security Target and is backed by a Long-Term Energy Service Agreement (LTESA) awarded to Enel X in 2023 through a competitive tender process. The process looked at several firming options. Enel X’s approach was selected for its cost efficiency and reliability, alongside three large-scale batteries.
While the VPP serves the entire state, participation from Greater Sydney, the Central Coast, Newcastle, and the Illawarra has been strong. Businesses such as manufacturers, food producers, universities, data centres, steel and aluminium producers participate in the VPP by agreeing to adjust energy use only a few times a year when the grid needs it most.
The VPP currently delivers 95 megawatts of firming capacity—roughly the equivalent of 19,000 home batteries. This reserve is activated when renewable energy sources like solar and wind are low, or when coal and hydro generators are offline.
NSW Minister for Climate Change and Energy Penny Sharpe welcomed the launch. “The launch of these virtual power plants in NSW marks a major milestone in the state’s clean energy transformation that utilises demand response as a valuable tool,” she said.
As NSW accelerates its move away from coal-fired generation, demand response is being recognised as a practical and scalable way to manage the changing grid. Hutchinson said this approach helps the state avoid over-investing in infrastructure that might only be used during rare peak demand events.
“There is no time to waste in the transition to renewables; the VPP harnesses flexible demand, supporting the state’s shift to clean flexible supply, creating a smarter, more secure system,” Hutchinson said.
