Tesla Launches Virtual Power Plant in California to Run as Giant Distributed Utility

Photo courtesy of Tesla, Inc.

Tesla is launching beta testing of the Virtual Power Plant in California that will run as a giant distributed utility. These measures are aimed at protecting Californians from the power surges that are expected in 2021 due to the abnormal heat.

The California network operator predicts that residents of the state will need network support in 2021. Tesla decided to take appropriate action before this problem grows large. The company turned to Californians to help create the world's largest distributed battery system to avoid dependence on the least efficient fossil fuel power plants, which have repeatedly shown their inability to cope with the high load of the grid.

Tesla invited its customers to connect to the Tesla Virtual Power Plant (VPP). The company will dispatch Powerwall customers when the grid needs support while continuing to maintain their energy security. Eligible Powerwall owners can enroll in the VPP program from July 22, 2021, after new Powerwall firmware is released, which is coming soon.

Benefits of participation:

• Stabilize California's Grid: The extra capacity your Powerwall provides could help avoid or reduce blackouts in a severe emergency. This way, Powerwall can keep the lights on for both you and your community.
• Clean the Grid: Tesla will dispatch your Powerwall when the grid is in critical need of additional power. That is when the least efficient generators would typically come online.
• Unite as a Tesla Community: Team up with other Powerwall owners who are accelerating the world’s transition to sustainable energy and help form the largest distributed battery in the world - potentially over 50,000 Powerwalls. As part of the VPP, your Powerwall will have an outsized positive impact on the grid over traditional demand response programs.
• Keep Your Energy Security: Powerwall will discharge during VPP events but won’t discharge below your backup reserve. Adjust your backup reserve to control your contribution while maintaining backup energy for outages.
• Export Credits During Peak Periods: You don’t need to change your home energy usage behavior to participate. Additionally, if you’re part of a net energy metering (NEM) program, you may earn net metering credit for your energy sent to the grid during events.

Tesla CEO Elon Musk mentioned such a system during the Q1 2021 Earnings Call. He explained that each Powerwall solar installation is a separate utility that, in addition to providing electricity to the home, can work with utilities to stabilize the entire grid. The more such facilities are located in a given area, the more likely it is that there will be no unexpected power outages during peak loads, as was the case in Texas in February 2021. Thus, under certain conditions, Powerwall can act like a giant distributed utility.

"There was a peak power demand and that peak power demand, because the grid lacked the ability to buffer the power, they had to shut down power. There's no power in storage. No good form of power storage. However, with a whole bunch of Powerwalls at houses, we can actually buffer the power. So if the grid needs more power, we can actually then with the consent, obviously, of the homeowner and the partnership with the utility, we can then actually release power on to the grid to take care of peak power demand. So, effectively, the Powerwalls can operate as a giant distributed utility. This is profound."

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