Our last BOTE provided an estimate of what Tesla might be able to gain as an Alien in the California electricity marketplace. Tesla is also preparing an entry into Texas. Changes in the utility market are occurring globally. As global energy markets transition opportunities are created for Alien invasions.
Attacking energy company profits in the UK and EU provide opportunities to skim electric power profits for an Alien invader. Fuel price increases, shortages, and transitions to green power have created structural opportunities. In the current UK capacity shortage prices were driven by reduced wind generation. Grid transmission capacity is missing in Germany to distribute all renewable energy sources. Mismatched peak demands and capacity, time of day pricing, and other regulations create highly profitable sales of baseload power to the grid. Alien Invaders that follow Tesla Energy’s model have fertile ground to invade and sell the most profitable power from Powerwalls and other stored energy at peak prices.
Like Telsa Energy’s efforts in California, Texas, and elsewhere UK Octopus Energy is aggregating Tesla Powerwall stored electricity to be resold during peak demand consumption. While California’s marketplace can pay up to $1,000/MWH, in the UK peak rates peaked November 22 to £1,067 or approximately $1428/MWH.
Actual pricing in the UK (and in EU Germany and Belgium) are different due to differing energy usage patterns and regulations. In the German electricity market imminent shutdown of nuclear generating capacity and spot shortages requiring import of fossil-fueled electricity create transition opportunities. Aggregating and reselling Tesla Powerwall stored electricity, to meet peak demand in these types of markets is highly profitable.
Octopus is generating power using an infrastructure paid for by other people. It is partnering with Tesla to deliver Powerwalls. Stored electricity is a source not requiring a multiyear permitting process that will expand capacity as Powerwall sales climb. Octopus participates in short-term (such as day-ahead) generating supply markets at peak profit and can arbitrage power from renewable and time shifted generation.
Octopus Energy is a classic Alien. Investors believe the story funding financial resources. On Sept 27, 2021, Octopus announced a $600 million round of investment. Octopus has built up people and technical know-how.
As a market participant it is known to regulators and market counterparties. Most importantly Octopus uses an approach without the usual assumptions.
If you’d like some additional context, please read our original piece on Tesla’s Software Defined Utility – https://www.linkedin.com/posts/eliotaxelrod_tesla-electricitytransformation-electricutility-activity-6866477803202756608-DMR8
If you’d like to quibble with our estimates, our reasoning, or how we arrived at these numbers, we’d love to hear from you – www.ekalore.com/contact
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