September 9th, 2020 by Steve Hanley
Tesla conducted a survey in Germany last month to determine if its customers would be interested in a plan that would allow the company to tap some of the electricity stored in their car batteries and feed it back into the grid if they could be assured of having enough range the next morning to meet their anticipated driving needs.
One section of the survey asks customers what would persuade them to switch their electricity supplier. The possible responses include a supply contract linked to owning of a rooftop solar system, a Tesla Powerwall home storage device, and Tesla software. Another asks if customers would consider buying a package that includes home energy storage, solar panels, a Tesla Wall Connector EV charger, access to a public EV charging network in addition to Tesla fast chargers, and using electricity derived from renewable energy sources. A later question again refers to a similar bundle of clean energy products and services supplied by Tesla.
The survey could be a precursor to Tesla becoming an energy supplier in that country. Now Reuters reports Tesla has acquired a license to trade electricity across western Europe by becaming a member of EPEX spot power exchange, a platform used to trade much of western Europe’s intraday cross-border electricity.
A Challenge To Traditional Utility Companies
Those two moves could mean the company is poised — together with one or more partners — to take on established utilities in Germany, Europe’s biggest power market and the heart of its auto industry according to energy consultants and energy industry executives who have spoken to Reuters. They say that generating and trading power could help Tesla lower the cost of charging their cars for its customers. The power sharing model could also apply to people who have rooftop solar and residential storage batteries from Tesla.
All those automobile and residential batteries networked together would create a virtual power plant similar to the one Tesla and Green Mountain Power in Vermont have been operating for over a year and which has saved the utility company hundreds of thousands of dollars during that time. Tesla is also developing a much larger VPP that will eventually encompass 50,000 homes in South Australia. In a VPP, the electricity stored by customers helps balance the electrical grid, an increasingly important service as Germany becomes more reliant on wind and solar power. Tesla declined to speak to Reuters about its plans for become an energy supplier in Europe.
Renewable Energy In Brandenburg
Reuters says the availability of abundant renewable energy was an important factor in Tesla’s decision to locate its new German factory in the state of Brandenburg. A person familiar with the company’s decision making process says, in the first six months of this year, 65% of the electricity on the Brandenburg grid was generated from renewable sources, mostly from wind turbines. However, much of it was constrained — which is how you say wasted if you are in the utility business — because the German electricity transmission networks are limited in how much green power they can transport over long distances.
Tesla’s Gigafactory 4 in Brandenburg will require 100 MW of electricity when it begins operations. If, as Elon Musk claims, Tesla decides to build batteries at that location, the demand for electricity will soar to as much as 400 MW grid operator 50Hertz tells Reuters. “The next and obvious step for Tesla is to get into production, especially of renewable power,” says energy consultant Berthold Hannes. “Tesla could use its own locations, for example the roofs of plants or the sites of charging points. In addition, it could take stakes in solar plants or wind parks.”
The Long Term Plan
A former member of Tesla management who declined to be named, told Reuters, “Tesla’s long term plan definitely includes tackling the energy industry in a bigger way, though it’s questionable whether it invests enough at the moment in that area.” In other words, Tesla is dipping a toe into the energy business in Germany but has yet to take the plunge.
But Elon seldom takes half measures. It seems likely if things have progressed to this point, there is a carefully thought out plan to take things to the next level and challenge the existing utility industry in much the same way it has challenged the auto industry, space travel, rooftop solar, and grid scale energy storage. Those traditional power companies would be well advised not to be too complacent about any potential challenge from Tesla.
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