Sustainability Watch: Tesla Is Bringing a Virtual Power Plant to Australia

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Tesla Powerwall virtual energy grid

Some 50,000 homes in the state of South Australia—as the name implies, a southern state in Australia but not the southernmost, an honor that goes to Tasmania—are about to get a big gift from Canadian turned American entrepreneur Elon Musk.

Tesla is gifting solar panels and Tesla batteries to 50,000 homes in the state in an unprecedented plan to turn houses into a giant, interconnected power plant by 2022. The grid of solar arrays and Powerwalls will create the biggest virtual power plant in the world.

Tesla said in a statement to AFP that the virtual power plant would have 250 megawatts of solar energy and 650 megawatt hours of battery storage. “At key moments, the virtual power plant could provide as much capacity as a large gas turbine or coal power plant,” the company added.

Tesla has a foothold in the energy storage market in Australia thanks to its 100MW/129MWh Powerpack project in the state—currently the world’s largest centralized lithium ion battery system. The project, which reportedly generated $1 million in its first few days of operation, charges when demand and electricity rates are low and discharges when demand and prices are high.

The new project uses Tesla’s residential battery system, the Powerwall, to create decentralized energy storage, with the blessing of the South Australian government, led by Premier Jay Weatherill.

The 50,000 homes in the state that will be fitted with 5 kW solar arrays and 13.5 kWh Tesla Powerwall 2 battery systems will generate at least 650 MWh of energy storage capacity distributed in the state. 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 utilises 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.”

This new project will be financed through power sales and assisted by an Aus$2 million grant from the state government and a An$30 million loan from the country’s Renewable Technology Fund.

Test installations have already begun with 1,100 Housing Trust properties, which incorporates lower-income households. Tesla’s sustainable solution will lower electricity prices, a problem that Musk has vowed that Tesla will continue to “work harder” on.

“Tesla is gaining a reputation here for getting things done,” Tony Wood, energy program director at the Grattan Institute in Melbourne, told Bloomberg. “If South Australia can sort through the funding and technical side of this project, then it’s worth doing because we’ll learn a lot more about rolling out distributed solar and batteries at scale.”

The electric carmaker is also recruiting workers to help it build the world’s largest battery factory, or “gigafactory,” outside Reno, Nevada, in partnership with Panasonic.

Closer to home, Tesla announced Monday it’s also donating batteries to stabilize the Tahoe power grid in Utah.

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