July 4 (Reuters) - AGL Energy ( AGLNF ) said on Friday it

had acquired South Australia's Virtual Power Plant (SAVPP) from

Tesla, 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.