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Highlights

  • AGL acquires South Australia's Virtual Power Plant (SAVPP) from Tesla, gaining access to a network of ~7,000 home batteries.

  • The move supports AGL’s transition from coal, with a target of 1.4 GW battery storage in the next year.

  • The program delivers discounted energy to residents and will help stabilise the electricity grid.

AGL Energy Ltd (ASX:AGL) has acquired the South Australia Virtual Power Plant (SAVPP) from Tesla Inc (NASDAQ:TSLA), bolstering its transition to clean energy and expanding its battery storage footprint across the country. The deal, announced on Friday, forms part of AGL’s broader strategy to exit coal-fired power generation and reach net zero carbon emissions by 2035.

The SAVPP is one of Australia’s largest virtual power plants. It comprises a network of around 7,000 Tesla Powerwall home batteries, most of which are installed in social and community housing across South Australia. Additional installations are planned for 2025, according to the company.

AGL did not disclose the financial terms of the acquisition.

The SAVPP system connects rooftop solar installations and home battery units to operate as a coordinated virtual power source. This allows AGL to distribute energy, support grid stability, and offer residents access to heavily discounted energy pricing. The company said it is actively exploring ways to extend the program to more customers in the future.

“We know that upfront costs of installing solar and batteries can be a significant barrier for many, and we are focused on how we can make these more accessible,” said Jo Egan, AGL Chief Customer Officer, in a statement.

The acquisition aligns with AGL’s ambition to deliver 1.4 gigawatts of grid-scale battery storage projects over the next 12 months. Virtual power plants such as SAVPP play an increasingly important role in modernising Australia’s energy infrastructure, particularly as the country accelerates efforts to replace traditional fossil fuel generation with renewable sources.

The SAVPP not only enables greater use of rooftop solar and residential battery storage but also provides flexibility to the broader energy system by feeding power back into the grid during peak demand. It acts as a distributed energy resource that can be rapidly scaled up and integrated into national decarbonisation efforts.

With this acquisition, AGL incteases its position in the decentralised energy market.