AGL Energy buys South Australia's Virtual Power Plant from Tesla

July 4 (Reuters) - AGL Energy AGL.AX said on Friday it had acquired South Australia's Virtual Power Plant (SAVPP) from Tesla TSLA.O, as the Australian power retailer looks to ramp up its battery storage capacity to drive green energy transition.

The deal comes as AGL seeks to fulfil its promise of exiting coal-fired generation and achieve net zero carbon emissions by 2035, targeting 1.4 gigawatts of grid-scale battery storage projects in the next year.

The acquisition of SAVPP, one of the largest virtual power plants in Australia, will allow AGL to access a network of residential solar and battery systems comprising of about 7,000 Powerwall home batteries, with more expected to be installed this year.

SAVPP is a network of solar and Powerwall home battery systems, installed on South Australian social and community housing which will now be owned by AGL.

Under the program, customers will receive significantly discounted energy prices and the company will be exploring ways to expand the program to more users, it said in a statement.

"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," AGL Chief Customer Officer Jo Egan said.

The solar and battery assets under the program will be coordinated to work together, and also used to help stabilise the electricity grid where required, the company said.

The company did not disclose the value of the deal, while electric vehicle maker Tesla did not immediately respond to a Reuters request for comments on the deal value.