Tesla partners with PG&E on virtual power plant in California
• Tesla (NASDAQ:TSLA) has launched a new virtual power plant in partnership with PG&E in California that will pay Powerwalls owners to help stabilize the electric grid and end blackouts in California.
• The new VPP will allow Powerwall owners to opt in to the program and sell their stored electricity back to the grid when it is in need of additional power.
• Powerwall owners who decide to join the program will earn $2 per kilowatt-hour sent back to the grid to help reduce or avoid blackouts.
This is an interesting idea. I’m wondering…wouldn’t the owner of the battery be most likely to need to use the stored power themselves just at the same time that the power company would need it the most?
This is an interesting idea. I’m wondering…wouldn’t the owner of the battery be most likely to need to use the stored power themselves just at the same time that the power company would need it the most?
Clicking through the links, the owner of the battery sets a reserve amount (say, 30% of the battery) that doesn’t get put into the grid.
But to echo DrBob - $2 per kwh? Yowza indeed. That’s 10x the current cost of electricity in CA. If that’s what the current market price for solar plus storage is, there’s a long way to go before this works for anything other than the highest peak demand (ie. we’re about to have a blackout) moments.
This is an interesting idea. I’m wondering…wouldn’t the owner of the battery be most likely to need to use the stored power themselves just at the same time that the power company would need it the most?
The idea is that the homeowner designates something like 25% or 50% of the kwh to be available to the utility. If it is a sunny summer day they might allocate more or less depending on their needs and their solar generation.
Even at $2/kwh it is not much money. A Powerwall is about 13 kwh. If you allocate 6 kwh you would get $12. And this might happen 10 days per year based on alerts I see from PG&E. I don’t have a powerwall myself.
But to echo DrBob - $2 per kwh? Yowza indeed. That’s 10x the current cost of electricity in CA.
This is “peaking power”. PG&E is only going to buy the $2/kwh power when all other alternatives have been exhausted. This is likely a source that gets tapped only a few times per year.
This is “peaking power”. PG&E is only going to buy the $2/kwh power when all other alternatives have been exhausted. This is likely a source that gets tapped only a few times per year.
3 days ago we had 100F plus temps in the Bay area and there was no power alert that I know of.
6+ years ago, before I had solar panels, I was on a voluntary PGE rate where they sent me an alert ~24 hrs in advance to save power between 2pm-7pm. I got a 2 cent/kwh reduction from May - Sep (I think). But during the power alert I got charged ~5x the normal rate. They could only invoke this alert a max of 10 days per year and it actually varied from about 3-5 days, maybe once of 7 or 8.
The idea is that the homeowner designates something like 25% or 50% of the kwh to be available to the utility.
I’m cynical enough to wonder how often will they cross over the set limit? Will the owner be able to tell? What backdoor software “glitch” is there to where you don’t get paid for energy sent?
This is “peaking power”. PG&E is only going to buy the $2/kwh power when all other alternatives have been exhausted. This is likely a source that gets tapped only a few times per year.
Absolutely. I don’t think the utility is going to be dumping big bucks into this, all things considered. It’s just a surprising bit of data that the market rate for tapping into the solar plus storage was so high, especially since nearly all of the costs to the owner (the solar system and battery) are pretty much sunk costs.
In some discussions about how to get enough storage so that non-hydro renewables can serve as dispatchable power, you get people suggesting that EV’s will help - that once people have a ton of battery capacity that they’ve already paid for, we can use that as storage infrastructure. So it’s a bit of a negative data point that their market projections led them to put the price at a 10x multiple to electricity rates in order to get enough participation. That’s not an great sign for hopes that people will let the utilities borrow their batteries to manage power flows.
Yes, it’s about peaking power. Currently Tesla does not have car to grid capabilities but the Ford F-150 Lightning does. With nickel cobalt battery cells you want to minimize charge/discharge cycles. Not so with LFP battery cells which can be charged to 100% with little degradation. This is a very fast evolving technology so nothing is set in stone. What I find most fascination is the slowly evolving distributed grid where the power utility is no longer the chief supplier but more of a moderator, supplying some of the power and the management of the grid. It will take time as home owners and businesses install solar and storage for their own use with the added benefit of being able to sell power back to the grid at profitable prices.
Think of it his way, being part of the virtual power plant home owners and businesses might be able to amortize the investment in 2/3rds of the time (the fraction pulled out of a hat). That’s a huge incentive to drive adoption. I think it is inevitable. These are the thoughts that sustain my long term hold of Tesla and Enphase Energy.
My banker daughter has a Tesla Power Wall in her garage. She just doesn’t have a Tesla. The Power Wall was left behind by the previous owner who was hustled out of the house rather quickly for a cash deal.
When she arrived from West Vancouver and tried to buy a Tesla they told her there was a 90 Day wait for it. She walked into the Audie dealer down the street and told them she needed a new car right now. She drove off the lot in ~ an hour and they had even sent a sales guy to get the new plates and installed them.
This is "peaking power". PG&E is only going to buy the $2/kwh power when all other alternatives have been exhausted. This is likely a source that gets tapped only a few times per year.
Absolutely. I don’t think the utility is going to be dumping big bucks into this, all things considered. It’s just a surprising bit of data that the market rate for tapping into the solar plus storage was so high, especially since nearly all of the costs to the owner (the solar system and battery) are pretty much sunk costs.
In intercst’s scenario, $2/kWh power might be the cheapest electricity around. The utility has to provide capacity to meet peak demand, which is only a few days a year and only for a few hours on those days. On top of that, the utility has to provide adequate reserve capacity as well. The peak and reserve generation capacity still have ongoing capital and maintenance costs that make the per kWh cost for these assets very high.
In this case, the utility can meet at least some of their reserve requirements at very low cost. The owner accepts all the capital and maintenance costs and the utility only needs to buy power when the wholesale market is above $2/kWh.
In this case, the utility can meet at least some of their reserve requirements at very low cost. The owner accepts all the capital and maintenance costs and the utility only needs to buy power when the wholesale market is above $2/kWh.
What the $2/kWh figure obscures is that the utility can buy power at lower prices at other times. The key player is the Tesla Autobidder!
Autobidder Autobidder provides independent power producers, utilities and capital partners the ability to autonomously monetize battery assets. Autobidder is a real-time trading and control platform that provides value-based asset management and portfolio optimization, enabling owners and operators to configure operational strategies that maximize revenue according to their business objectives and risk preferences. Autobidder is part of Autonomous Control, Tesla’s suite of optimization software solutions.
Autobidder is successfully operating at Hornsdale Power Reserve (HPR) in South Australia, and through market bidding, has added competition to drive down energy prices.
This is an interesting idea. I’m wondering…wouldn’t the owner of the battery be most likely to need to use the stored power themselves just at the same time that the power company would need it the most?
More like just AFTER the power company needed it the most.
The power company would tap into the batteries in an attempt to prevent a power outage. The owner would need the battery when the power went out.
But I think your point is well taken. Both would need the power reserve at just about the same time. It’s a balancing act for the battery owner. Give up a bit of the reserve power to potentially prevent an outage? Or keep it all in case the outage can’t be stopped?
That might be the reason for the ridiculously high price ($2 per kWh when the going rate is between 12 and 35 cents per kWh). The battery owner needs some compensation for potentially having to go without power if the use of their battery does not prevent an outage.
I’m cynical enough to wonder how often will they cross over the set limit? Will the owner be able to tell? What backdoor software “glitch” is there to where you don’t get paid for energy sent?
I don’t know the mechanics of how it works. But I do know you get a phone app that connects to the WiFi on the Powerwall. People have been using it for years already and they get alerts from the powerwall and can control it. What is new is the aggregating of many powerwalls and the discharge requests going out from the utility all at once with the new pricing. Solar + Powerwall customers already can choose how much to send back to the utility and how much and when to charge/discharge their batteries.
This is an interesting idea. I’m wondering…wouldn’t the owner of the battery be most likely to need to use the stored power themselves just at the same time that the power company would need it the most?
But I think your point is well taken. Both would need the power reserve at just about the same time. It’s a balancing act for the battery owner. Give up a bit of the reserve power to potentially prevent an outage? Or keep it all in case the outage can’t be stopped?
There is this to consider too: the cost of control circuitry for a powerwall probably doesn’t scale with the size of the powerwall. So maybe, over time, they get larger powerwalls. Particularly as the price/kwh of the batteries comes down.
Powerwall owners who decide to join the program will earn $2 per kilowatt-hour sent back to the grid…
Yowza! I knew electricity rates were high in California but…
DB2
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In the Texas winter storm of February 2021 the electricity rates were much higher than $2 per kilowatt-hour:
The average price for electricity in Texas in the winter is about 12 cents per kilowatt-hour, according to the U.S. Energy Information Administration. Texas utility regulators allowed that price to rise to $9 per kilowatt-hour.