Tesla's 'virtual power plant' ambitions

time:2022-12-09 03:40:17source:chakarski.com author:Individual stock analysis
Tesla's 'virtual power plant' ambitions

As an IoT technology that integrates distributed generation, demand-side response and energy storage resources, and responds to grid dispatch instructions, "virtual power plants" can include anyone in it. Tesla is turning its network of battery storage customers into a massive distributed virtual power plant. The company is participating in the California Pacific Gas & Electric (PG&E) Emergency Load Reduction Program (ELRP) pilot. The scheme aims to reduce the demand for electricity generation when the grid is stressed during periods of peak demand. Tesla's home battery storage product is called Powerwall, and it's sold as an add-on to solar panel roofs or other solar panel products. When the California grid needs extra power because of a particularly hot day, Tesla Powerwall users can get paid $2 per kilowatt-hour for returning the stored power to the grid. Powerwall users can check in their app for this requirement. Last month, Tesla has invited about 25,000 PG&E customers with Powerwalls to join the virtual plant. More than 3,000 customers were said to have expressed interest in joining the program two weeks ago, and as of August 18, nearly 2,500 customers had officially signed up. On August 17, Tesla Powerwall users were reportedly asked to supply power to the grid for the first time, and "delivered up to 16.5 megawatts of solar power to the grid when it was most needed."

The grid, users, and Tesla all benefit

"Virtual power plant" Literally, "virtual" refers to its existence without a physical power plant, and "power plant" refers to its existence with a power plant Certain attributes, such as providing ancillary services such as peaking and frequency regulation, participating in the electricity market and obtaining benefits, etc. The core of the "virtual power plant" is the centralized control platform. On the one hand, it can analyze the collected data of charging piles and residential electricity consumption, so as to achieve accurate response and management on the demand side. "Positive power plants" supply power to the power system. When the power generation side is too large and the demand side is difficult to load, it can be used as a "negative power plant" to increase the load to consume the power of the power system, help the power market to cut peaks and fill valleys, and smooth the integration of new energy into the grid. A series of impacts on the power grid; on the other hand, it can realize the interconnection between the large power grid and the power market, which not only helps to optimize the entire power grid system, but also provides internal aggregated enterprises, users, charging piles, energy storage, distributed energy sources. and other market entities provide a way to participate in electricity market transactions, so that they can all become micro-generators and participate in electricity market transactions to obtain benefits. A price of $2 per kWh may seem high for the grid (PG&E), as residential customers in the US typically see 10 to 20 cents per kWh on their electricity bills. However, during peak electricity consumption, wholesale electricity prices can rise, easily surpassing the $2 level. For Powerwall users, a Powerwall unit can store about 13.5 kilowatt-hours of energy, so PG&E makes about $25 by feeding power back to the grid each time PG&E invokes the program. Considering that buying a Powerwall plus a solar roof or solar panels can cost tens of thousands of dollars, the $25 reward may seem relatively small. But it makes sense, the electricity generated by the solar panels also offsets the homeowner's electricity bill. And for Tesla, while it doesn't appear to be generating any revenue from the pilot program itself, deals like PG&E help spur demand for Tesla's energy storage and power generation products. Data shows that Tesla’s energy business generated $866 million in sales and $97 million in gross profit in the second quarter of 2022. Tesla's auto business generated nearly $17 billion in sales and about $4.1 billion in gross profit over the same period.

May be the prototype of the future grid

This model is not only interesting, but also a preview of how the grid may change in the future, especially as electric vehicles from companies such as Tesla are flooded on US roads . For example, Ford's F-150 "Lightning" pickup can power a home for three to 10 days, depending on what devices are connected during a power outage. Of course, the Tesla/PG&E program is only available to customers with solar panels, and currently Tesla vehicles can't deliver power back to the grid like the F-150. And most EVs are charged in homes without solar panels. Nonetheless, PG&E is targeting EV owners, as the total number of batteries in EVs on U.S. roads today is roughly the equivalent of 11 million Powerwalls. This year, PG&E has reportedly begun a pilot program with customers who own Ford and General Motors-branded electric vehicles. Last year, PG&E and the BMW Group launched the third phase of the ChargeForward pilot program, expanding the program to all BMW EV drivers in northern and central California who are also PG&E residential electricity users. This article is from Wall Street News, welcome to download the APP to see more
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