The playing field for VPPs is defined by the current regulatory system. This is currently under review, but as we speak the current options for VPPs to generate money are explained below.
1. Selling power at peak demand periods:
The most common and obvious source of revenue for a VPP is to sell power by discharging batteries at times of peak demand. While you have a fixed rate or fixed time of use rates for energy from your electricity retailer, the wholesale market is constantly moving.
The wholesale electricity price usually fluctuates between 4c per kWh and 10c per kWh, but at different trading intervals within the year the price can jump much. For example on the 17th May 2021 the wholesale electricity price was around $6 per kWh at 6pm in NSW, VIC and SA.
At this point all VPPs in each of those states would have discharged as much power into the grid as possible earning $6 per kWh. They can offer a very attractive rate back to the participants of the VPP for each kWh they contributed and still make a reasonable revenue.