Tesla’s Virtual Power Plant (VPP) in California responded to its first real test: an emergency event that put a strain on California’s power grid. Southern California is currently going through its third consecutive year of drought. California has also had to implement rolling blackouts and encourage residents to save power whenever possible to deal with high energy demands over the hot summer.
2,342 Tesla Powerwall owners contributed power to the Pacific Gas and Electric Company grid. 268 Powerwall owners sent power to the Southern California Edison grid. The Powerwalls contributed as much as 17.5 MW of power to the grids. Powerwall owners could earn as much as $2 per kWh if they did not opt out of providing power during peak periods and received between $10 and $60 during the event.
Power grids in hot climates like southern California can experience peak periods that put a strain on their ability to provide power as air conditioning units struggle to keep building interiors cool. Utility companies and local governments often ask customers to conserve power during these periods. Power producers can attempt to spin up “peaker” power plants, which typically to the pollution problem.
Powerwall batteries can store as much as 13.5 kWh of power as a backup in case of a power outage. Powerwalls are typically bundled with Tesla’s solar power products like the solar roof, though they can also be sold separately.
Tesla also sells “industrial sized” batteries called the Powerpack and the Megapack, which is typically used for large-scale applications like a solar farm in California. A Powerpack installation helped provide power to the grid when a coal-fired power plant in Australia suffered a catastrophic failure in May 2021. Tesla cited the incident in its response to Australia’s Energy Security Board’s request for recommendations to make the energy grid more flexible.
(Yes, the Megapacks have caught fire before. However, a Virtual Power Plant with lots of Powerwalls in separate locations is less likely to completely go down if one Powerwall fails. This is one of the perks of having a less centralized system.)
Tesla announced the Virtual Power Plant in California in July 2021. It also worked with Australia on a similar program that could connect as many as 4,000 homes in South Australia to a Virtual Power Plant. It was touted as a way to help provide power during periods of excessive strain on the power grid without having to spin up a centralized power plant.
Tesla also proposed establishing “Tesla Energy” in Texas in an apparent response to the failures of Texas’ power grid in the winter and summer of 2021. Initial plans included installing a 250-megawatt battery near its Gigafactory in the Austin area.
It was already constructing a battery capable of storing 100 megawatts in Houston, which it registered with the Electric Reliability Council of Texas.