Tesla Powerwalls in California join the movement to create virtual power plants


With just a touch of a button on your smartphone, you, too, can assimilate into a regional power plant from your garage.

All around the nation, a flurry of virtual power plants (VPP) have been making news. Comprised entirely of distributed residential energy storage, these plants stabilize the grid, and often eliminate the need for new fossil peaker plants.

Starting July 22, if you have a Tesla Powerwall and app installed, you can “Opt In” to the California Tesla Virtual Power Plant. The company page notes the project is currently being offered with no compensation, and is being used as a public service during the current California power grid challenges.

The Tesla VPP website also said that as many as 50,000 Powerwalls are available to create “the largest distributed battery system in the world.” Most of the Tesla Powerwalls that are installed are 5 kW/13.5 kWh, suggesting a maximum potential capacity of 250 MW/675 MWh.

Data collated by the California Solar & Storage Association from the California ISO power grid (in the chart below) suggests that in 2020 alone, 165 MW/428 MWh of distributed energy storage was installed. Since 2011, the data shows 530 MW of distributed energy storage connected, suggesting a total stored capacity approaching 1,500 MWh.

Tesla has experience with networked VPPs. Its South Australia plant has a 50,000 unit goal, and is almost 10% deployed. That plant has been given credit for supporting the broader powergrid during complex events.

Powerwall owners who opt in should expect their batteries to be used during so-called “Flex Events,” like those which occurred earlier this summer, prompting a record 999 MW energy storage injection of power from energy storage into the California grid, as shown below.

And, considering the Texas power outage this past winter, a new Tesla-powered housing complex in Austin should attract some attention. The development is set to incorporate as many as 10,000 SolarRoofs and Powerwalls. Tesla says this nascent complex will become a testbed for its technology.

But Tesla’s announcements are just the tip of the iceberg. Managed, distributed energy storage projects have been making headlines with increasing frequency, and the average project size has been increasing as well.

  • On July 19 Hawaiian Electric made available up to $34 million for those who add batteries to their solar power projects. In exchange for the incentive, participating customers must use or export power during two peak hours, determined by HECO. Exports are most likely to occur between 6:00 PM and 8:30 PM.
  • Five days earlier, Sustainable Westchester of New York launched its sonnenCommunity New York Virtual Power Plant. Sonnen said it hopes to link 5,000 units totaling 80 MWh, and participate in the 2024 New York ISO market.
  • On July 13, Arizona Public Service launched a $1,250 incentive for anyone that installs a new battery, and allows up to 80% of the battery to be used during events. The docket includes HVAC and electric vehicle changing in the demand charge program as well.

Multiple parties commented to pv magazine USA that these projects are growing in size, and delivering solid data.

Sonnen and its sonnenCommunity platform is likely the oldest residential energy storage VPP platform in the industry. Whole neighborhoods of this battery have been around for years.

Vermont electric utility Green Mountain Power should be given credit for its VPP, too. First launched in 2017, it now incudes thousands of large and small Tesla batteries. Early on, the VPP saved $500,000 during a heatwave.

Market player

And of course, we can only wonder how many – and what new types – of VPP programs Lynn Jurich and team at Sunrun have been cooking up.

Sunrun’s NE-ISO capacity market win was a watershed moment for residential solar+storage on the bid power grid. Since then, the company has signed multiple VPP deals made up of slices of its hundreds of thousands of rooftop and garage power plants.

And let’s not forget Sunrun’s recent announcement with Ford, which suggests we should expect vehicle-to-grid VPP integration – especially considering the truck is expected to come with a battery somewhere near 150 kWh in capacity.

Ford Lightning charging a post-storm cleanup.

Image: Ford

VPPs are clearly a recipe for grid success. Add in a dash of OhmConnect paying its homeowners hundreds of thousands of dollars with demand response during California power grid Flex events, and we can begin to see some real smarts emerging from well managed distributed resource power grid.

One big reason these VPPs exist is that distributed power grid assets were bought as part of a grassroots energy movement. Homeowners and business owners who paid for energy storage in their garages and businesses are directly improving grid reliability. The killer innovation is in using software to use these assets in a way that maximizes electricity savings and grid stability for everyone connected to the grid.

Research by Vibrant Energy projects that integrating the privately owned 250 GW of distributed solar and 4 TWh of distributed energy storage could save over $470 billion in general electricity costs. Those savings are delivered to all ratepayers and not just those who invest in the assets themselves. By the way, $120 billion of those savings would go to California alone.

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