Our last Back Of The Envelope Post introduced the idea that Tesla is a classic Alien Invader to the Electric Utility market. Tesla is an invader to another marketplace leveraging their money, tech, and people. Tesla, by our estimation, is poised to skim the cream, to take the most profitable revenue stream in the marketplace.
In California, Tesla is conducting a beta test to provide power to three different Electric Utilities, PG&E, SDGE, and SCE. Tesla is going to do this without a traditional generation capacity or a plant. They will be aggregating power from ~50,000 Powerwalls. Let’s look at a few numbers (this is a Back Of The Envelope post after all).
How much power are we talking about? Tesla Powerwall+ have a specified capacity of 13.5 KWH. Published assumptions are that 70% of the power could be sent back to the grid. The practical output of a Tesla Powerwalls is 5 KW. In this configuration any one Powerwall can send up to 10 KWH a day. This amounts to 500,000 KWH or 500 MWH over a peak period.
Aggregating a Virtual Power Plant, Tesla could get a percentage of the money that utilities provide to customers for reducing their consumption and for power sent back to the grid.
Tesla can be compensated for helping customers reduce their consumption – instead drawing off the Powerwalls. The California CPUC Emergency Load Reduction Program can pay up to $1,000 per MWH reduction during an emergency.
Tesla can also benefit by selling power from Powerwalls to the California grid. Peak demand drives utilities to pay higher prices for electricity. According to the California Independent System Operator summer demand peaks from 6 -10 PM. In June 2021, electricity was purchased by utilities at an average of $93 per MWH.
Back Of The Envelope, 500 MWH would amount up to $46,500 per hour for Tesla and Powerwall owners.
More in our next post
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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