Tesla will soon begin construction on what is about to be the biggest virtual power plant in the world.
Just announced by South Australia Premier Jay Weatherill, the system will use 50,000 homes in the state as its base. Each of those homes will be set up with 5kW solar arrays to generate energy plus a 13.5 kWh Tesla Powerwall 2 battery system to store the excess power generated by the arrays.
That amounts to approximately 650 MWh of energy storage capacity arranged in the equivalent of a vast decentralized energy storage system. Others call it a virtual power plant.
Similar to the way in which Tesla’s Powerpack system works, these batteries will charge when the energy demand and electricity rates are low. They will then be available to discharge power for sale to others when the demand is high and prices are up.
That makes for a strong payback justification for the system. In Tesla’s previous “biggest in the world” 100 MW/129 MWh Powerpack project in South Australia, the power bank earned approximately $1 million AUD (about US$800,000) in only a few days. That system was built by Tesla and operated by Neoen as part of its nearby wind farm. It was built with a plan to have about 30 MW/90 MWh of capacity for wholesale energy resale, with the government of South Australia having access to the rest for grid stabilization.
Commenting on the current system, Tesla stated: “When the South Australian Government invited submissions for innovation in renewables and storage, Tesla’s proposal to create a virtual power plant with 250 megawatts of solar energy and 650 megawatt hours of battery storage was successful. A virtual power plant utilizes Tesla Powerwall batteries to store energy collectively from thousands of homes with solar panels. At key moments, the virtual power plant could provide as much capacity as a large gas turbine or coal power plant.”
The project has been launched with the help of a $2 million grant and a $30 million loan from the Renewable Technology Fund. Loans and any other costs will be paid for through power sales.
The first installations of the project are planned for 1,100 lower-income Housing Trust properties in the state. The goal is to complete all the installations by 2022.
It is unfortunate that Tesla has to go to Australia to build these types of large-scale distributed solar power systems and is not building them in the United States, where there is a dire need for distributed solar energy systems and green energy storage.