Tesla builds case for 250MW virtual power plant after first trial success | RenewEconomy

Tesla builds case for 250MW virtual power plant after first trial success

South Australia government hails success of trials of first phase of Tesla virtual power plant, saying it resulted in lower prices and greater grid security. It now seems disposed to roll-out the full 250MW planned, as well as its own plans for battery storage grants.


The prospects for Tesla’s proposed 250MW “virtual power plant” in South Australia look significantly brighter after the success of its first trial and an enthusiastic response from the South Australia government.

So far, some 100 Housing SA homes have received their 5kW of rooftop solar and the 13.5kWh Tesla Powerwall batteries, with another 1,000 homes to receive solar and battery storage under an agreement locked in by the previous state Labor government.

The original plan was to install a total of 50,000 Housing SA and low-income homes with solar and storage, slashing bills for those homes by around 30 per cent and creating a 250MW “virtual power plant” that could be used to boost security and reliability on the state’s grid.

The fate of the third phase – which will rely on private finance, and the emergence of another retailer – was clouded when the Liberal state government won the state election in March, and said then it would favour its own proposal of giving subsidies in the form of grants for battery storage to 40,000 homes.

An announcement on the $100 million grants for 40,000 homes is expected in coming months, but it now seems clear that the new government is interested in doing both – a result that would see at least 90,000 subsidised and supported battery storage installations across the state.

There are also ongoing talks about a different scheme proposed by German manufacturer sonnen, which could see another 10,000 batteries brought into the market.

In a statement on Sunday, the state government hailed Tesla’s first VPP trials for “delivering cheaper energy to South Australians who need it most”, and increasing the reliability of the state’s energy network.

The results of those trials conducted by Tesla – obtained by RenewEconomy – show that groups of Tesla Powerwalls installed in homes can deliver much of the same services as the Tesla big battery in South Australia, such as providing rapid and accurate response to frequency changes.

This graph below shows how two Tesla Powerwalls (red and green), respond to so-called “droop settings” by autonomously and automatically injecting active power when the frequency (blue line) drops below the thresholds (dotted lines).

“This response demonstrates the ability of the SA VPP to autonomously and instantaneously provide frequency services that help maintain the stability of the grid,” the Tesla document says.

The South Australia government acknowledged this, saying that Phase 1 of the Tesla VPP (100 homes)  demonstrates that distributed Powerwall technology can increase the supply of energy during peak periods.

It says this would increase reliability and cut prices in South Australia and “when paired with solar and wind” generate clean renewable energy.

“This program is already delivering participating South Australians significantly reduced electricity bills,” energy minister Dan van Holst Pellekaan said.

“The Marshall Government has always highlighted the critical need for more storage to increase security and lower expensive peak costs.

“The final rollout phase (Phase 3) is subject to the success of the trials, the financing of the program by the private sector, and the satisfaction of both Tesla and the Government in the final program design.”

“In addition to this program, we will also be announcing details of our $100 million Household Storage Subsidy Scheme to deliver 40,000 more home batteries in the coming months.”

The results are also timely given the recent price spikes in South Australia, artificial surges more or less engineered by the gas cartel when competition is removed through network constraints.

The Tesla big battery has already smashed one of the cartel’s ruses in the FCAS market, and more competition would help further lower prices in both the FCAS and wholesale electricity markets.

Another of the tests conducted by Tesla related to what is called “regulation” frequency services, using 10 Tesla Powerwalls, including one inactive one.

Like its “big brother” at the Hornsdale Power Reserve, which features an array of 100kW Tesla Powerpacks, these also showed fast response and accuracy (unlike some traditional fossil fuel plants).

“The aggregated test group response to a high degree of accuracy to meet the 4 second active power set points,” the Tesla test report says.

“The figure also demonstrates that the Gridlogic platform dynamically manages the output from the individual Powerwall systems accounting for local system usage and constraints and distributed the active power requirement accordingly.”

In other words, distributed Powerwalls can continue to do the primary job at their location – storing solar from the household rooftop, supplying power when solar output falls – and providing broader services to the grid.

Tesla is not the only company rollout out projects like this – there are a variety of VPP and micro-grid trials going on around the country – but its proposed 250MW VPP is by far the biggest in Australia, and the world.

It’s also heartening to see such process in light of reports from the ACCC last week, which sought to put a handbrake on distributed energy, ending subsidies for rooftop solar. Its 370-page report focused only on the health and returns for centralised generators.

Yet most analysis, including from the CSIRO, network owners and the Australian Energy Market Operator, and their equivalents overseas, expect up to half of all demand to be met by distributed generation – rooftop solar, battery stooges demand management – over the next few decades.

The Tesla VPP proposes to install rooftop solar and Powerwall batteries for free. The funders get their money back through bills for the use of electricity, but it still reduces the cost to those low income households – who would otherwise not afford either solar or storage – by around 30 per cent.

Phase 1 of the project targeted 100 homes and phase 2 targeted 1,000 homes, supported by $30 million of government funding. However, the next phase, to meet the remaining homes to make the 50,000 target, was dependent on private funding and the emergence of a new retailer to handle it.

The separate Liberal program targeting 40,000 home would be for a $2,500 grant, but it is understood the new government is looking at ways to ensure these are interconnected so they could also act as a type of virtual power plant.

South Australia’s minister for Human Services Michelle Lensink said the Tesla VPP project was “incredibly beneficial” in offering much-needed bill relief for Housing SA tenants.

“This project gives South Australians huge help in paying excessive power bills as they struggle with daily cost of living expenses,” Lensink said.

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  1. Paul Surguy 2 years ago

    A 100 housing trust houses done in 4 months is not a lot out of 50,000 house that are planned,slow going here

    • MikeH 2 years ago

      It is in line with the initial SA Labor & Tesla proposal which was to roll out 1100 Housing Trust homes first to trial the technology. The remainder are to be financed by investors who will presumably come on board if the first phase can be shown to be a success.

      • Paul Surguy 2 years ago

        The 1100 houses was to be the test a little short of that,like 1,000 house short,would of been a good test,things have slowed up since a change to the liberals

        • hydrophilia 2 years ago

          Well, the libs are making good noises: perhaps things will accelerate.

  2. manicdee 2 years ago

    “The Marshall Government has always highlighted the critical need for more storage to increase security and lower expensive peak costs.”

    And we have always been at war with Eurasia. Especially when we said we were canning all the Weatherill government’s projects because they don’t fit out ideology.

  3. MaxG 2 years ago

    While I am all for it… I find it bewildering how governments can sell public assets and then try to be social (for low income households) by subsidising the profits made by industry in order to deliver the social aspect. Outright crazy!
    Just for comparison: if the public asset would not have been sold, the government would simply install what is required, without continuous profit taking by industry… hence, would have more public money left to do more good with it. — But then, we can’t have that… why any social aspect is and will be under attack by corporations until privatised… (sorry, for another lesson in neoliberalism, and for sounding like a broken record.)

    • hydrophilia 2 years ago

      You are forgiven: sometimes one can not help but rail against the obvious shortsighted stupidity of the world. Humans!

      • Steven Gannon 2 years ago

        A minority of humans, half of them conned by their media.

        • Greg Hudson 2 years ago

          The other half paid for by lobbyists

    • Paul Surguy 2 years ago

      LOVE IT MaxG

    • nakedChimp 2 years ago

      And all this because of the zero lower boundary interest problem of current state of the art fiat currencies that our economies rely on as transaction medium and which turn into a monopoly once they accumulate in private hands, i.e. the 0.1%

      If you’re a broken record, I’m a broken stone plate.

    • billn 2 years ago

      Phase 1 was an experiment with 100 homes (cost borne by gov’t but fairly trivial). Phase 2 is 50,000 homes and the cost is borne by companies (investors) that are constrained to deliver power at 30% discount vs current pricing. (No public funds spent there.) Also, these distributed power units, provide frequency leveling, near instantaneous protection against generator trips and (in general) protect equipment against “dirty power”…. again at no cost to the government.

      Phase 1 and 2 are Tesla contracts.

      Phase 3 added 40K homes is an outright subsidy to the people in the low income homes- who are likely getting other subsidies (“low income homes”). This one is simply cheaper to sustain in the long run…. and also adds the benefits of frequency leveling…. etc to the grid at large. This is more of an open contract to multiple vendors (presumably to compare and contrast technologies).

      If your concern is about subsidies to the poor, that can be argued as a separate subject. If it is that they should receive more costly subsidies vs cheaper subsidies… I would think the math would suggest that this plan is cheaper, more beneficial than other electric subsidies (by 30% not mentioning grid benefits).

      As to why they bring in outside investors vs wholly gov’t projects. Simply put, they can’t justify the sudden hit to the tax payer (The cost of solar/batt is entirely front-loaded). The cost is paid by the home owners at 30% below rates otherwise paid based on current pricing.

      The downside is that the cost will be stable over the 20 year life of the panels (or at least the 10-15 year life of the batteries). If other, cheaper, tech comes along, they are locked in.

      • MaxG 2 years ago

        I probably should have been clearer — I am all for it.
        What I found bewildering… yada yada — long story short: it would have been cheaper to deliver this policy, without profit-taking by industry in the process.

        • LAKIN 2 years ago

          You are absolutely correct, Max. It was all just a part of the big con of privatisation, when governments the world over sold off income-earning assets (hitherto owned by the citizens) to private companies.

          In the case of Telstra, the business was actively marketed to so-called “Mum and Dad” investors – you know, us, the tax-payers, the people who had forgotten that they already owned it!

    • Hettie 2 years ago

      Don’t apologize, Max. You are spot on with that analysis.

    • Ren Stimpy 2 years ago

      I find it bewildering that you have such a social justice imperative, but you so readily want to go off grid and tap out of all our problems and not help to solve them?

      • Hettie 2 years ago

        Oi! Ren, play nice. There have been quite enough personal attacks on these pages recently.
        Getting impatient with trolls doesn’t count, of course, but questioning the integrity of bona fide contributors seems to me to be uncalled for.

        • Ren Stimpy 2 years ago

          Just attempting to get to the truth. Isn’t that what Australians do?

          • Hettie 2 years ago

            Mmmmm. There are ways and ways of asking. And there is cognitive dissonance too.

          • Ren Stimpy 2 years ago

            I’m sorry if you have cognitive dissonance Hettie, but don’t project your learned ways onto me. Cheers.

          • Steven Gannon 2 years ago

            I think Hettie is politely hinting that you are a bit aggressive at times, including now.

          • Ren Stimpy 2 years ago

            Yeah, you are right. Why am I a bit aggressive? I think I have to take that back to base and contemplate.

            Why? My instinct is I’m justified with being aggressive with these moron politicians!

          • Ren Stimpy 2 years ago

            Crikey that took about nine minutes,

          • Steven Gannon 2 years ago

            All good.

          • Hettie 2 years ago

            But Max is neither a moron nor a Politician.

          • Ren Stimpy 2 years ago

            True. But still he excludes himself from the problem so why does he still include himself in this discussion? When he has so much knowledge to give if he only chooses to live like us.

          • Hettie 2 years ago

            How is his knowledge negated by his lifestyle?
            As I read it, and Max can confirm or deny this, Max went off grid before the possibility arose that there might be adverse social effects from mass grid defections.
            I’m not sure, but possibly the property he spoke of would have cost megabucks to connect to the grid. In which case his decision is entirely reasonable, justifiable.
            In any case, it is really not OK to be judgemental.

          • Ren Stimpy 2 years ago

            You absolutely speak the truth. I’m going to check out of this discussion and pass out – I will re-connect with you, you brilliant perfect honest thing, in the morning!

          • Hettie 2 years ago


          • MaxG 2 years ago

            We had a few reasons to go bush… and I would have never connected the property to the grid; but did, as it was easy, as it ran 5m past the property… and my priority was to establish a livable shed. I am still connected, using the grid in lieu of a generator… but the configuration is an off-grid setting, just short of a generator. It would be 1.2k$ for 6kW/h gen-set. At $1 connection fee per day, the ROI would be a bit more than 3 years… so doable today. Since the FiT of 11 Cents pays for the grid and imports and returns a $200 credit per year, I am happy with the present situation. Though it and I could change in a matter of days, or all failing in an instant.
            More information is in my reply to Ren Stimpy (further up)… also with respect to the social aspect of grid defection. In short: it is a commercial product, which I am not obliged to buy or support.
            I am in contempt with the current system; and when you think of people like Chomsky being laughed at for decades, what could I possibly do, considering I have similar views… and also followed US foreign policy for decades… which brought us the Western world we live in, including all its failings and corporatisation.
            And what I am sharing on the forum is only the tip of the iceberg with what is wrong with our so-called democracy (look at all the restrictive laws which have been passed in recent years, in the (not so) new fear of terrorism… and on this token I may refer to Assange and Snowden persecuted by (corrupt) governments, yet all they did was revealing how corrupt these governments really are… and we can’t have that. while the (corporate) press pedelts the detritus of the so-called leaders.
            I shall stop here…

          • Hettie 2 years ago

            Thank you, Max. Somewhere along the line we got the impression that you were off grid. So all this has been about a misunderstanding.

          • MaxG 2 years ago

            In principle I am off-grid, and will cut the cord, if either FiT decreases significantly or the connection fee goes up.
            … and do neither see a social responsibility to be connected nor advocate its use.
            So, Ren’s question was fair, and as identified by others a tad aggressive; I thank you for your support; though would not classify it as misunderstanding. 🙂

          • Hettie 2 years ago

            I try to keep things civil between the good guys. There are some who are somewhat volatile, as I can myself be. Grumpy old woman that I am.
            You mentioned the changes in FiT. Don’t know where you live, but check out the AGL solar saver on line offer, if it is still open. FiT of 20c, fixed for 2 years. Daily charge and price per kWh a bit high, but some of us have checked our historical data against bit the agl and our current supplier, and found we would be significantly better off with AGL. I have arranged to change, should come into effect in a couple of days. And there’s a $50 bonus for new customers.
            I have been very happy with Powershop, but their new FiT is lower, DSC and price higher, online purchase discount smaller than before.
            I checked with them today to see if they would increase the fit. The lass I spoke with was very apologetic, but no. No wiggle room. So AGL it is.
            Check out AGL before you cut the cord.
            Bed time for old women.


          • MaxG 2 years ago

            Checked AGL; yes, this offer is still available in QLD too. https://www.agl.com.au/campaigns/solarsavers

          • Hettie 2 years ago

            Good luck then!

          • Hettie 2 years ago

            Ah. You have edited. Better.
            And cognitive dissonance is believing two contradictory things at the same time.
            For example, this government is wrecking the economy, but the Coalition will always be better economic managers.
            Or, it seems the summers are getting hotter, but I don’t believe in climate change.

          • Ren Stimpy 2 years ago

            I like that swagger. Go you!

      • MaxG 2 years ago

        Fair enough, I have no issue with your point.
        To answer properly would warrant a longer response… but I try to be short.
        (Unfortunately) I lost a friend over a similar question… he said a similar thing, and how the electricity grid is a public good, which I defected from; when I reminded him that the social and public good went out of the window when it became a private ‘product’ like any other; I am no longer obligated to buy it. And if a vendor tries to screw me, or I feel this way, I won’t buy.
        Given the power prices over the last decades, I did some maths, and decided to take care of my energy myself.
        I once publicly stated: if the grid were public, I would give my excess energy away for free to a (for a better term) needy household. But I won’t give it away for a private company to benefit without reasonable reward.
        So, accuse me then for using the grid as a generator; and I say: I don’t care, because I pay my dues. Make this more expensive than it should be, and I cut the cord.

        As for not helping to solve the problems…
        I have tried; I was approached by the union in Qld to join their ranks, which I declined after a few conversations which made it clear to me that I could to more in a political party. However, I realised that any candidate with a spine will not make through party ranks… so I should become an Independent.
        I started having more conversations with people of all sorts, and found that not one, was interested in having a conversation about anything that would matter to improve their lives. A water-cooler conversation would go for 40 seconds after which one person after another came up with an excuse having to go a meeting, having work to do, or openyl stating, they couldn’t be bothered with politics. When asked why, they felt it was a useless / hopeless undertaking.
        When I spoke to friends, and family, and took my personality and stance into consideration, I too figured that it would be a useless undertaking, given that nobody really understood what I was talking about; and I think you know what I am on about… the problem is: a lot of time and effort needs to be put into understanding on how the world works; far more time on a daily basis than the average person is ever prepared to invest. — Inshort: I decided that I rather spend the (potentially) last decade of my life in peace, bluntly not giving a sh!t, and enjoy my no-subscription set-up.
        In order on change where we are at, we would need a revolution; in Australia: not happening.
        So yes, you have a valid point, this is my (sort of) short answer.

      • MaxG 2 years ago

        To further underline my previous response… have a look at this https://www.youtube.com/watch?v=PJy8vTu66tE … and while we are not the US, our system of pre-selection is similar (as in you have to rise within the party)… and guess who is running Australia? Corporate interest. I am sorry to say, but can see no chance in hell to break this pattern.

        • nakedChimp 2 years ago

          Similar to what you did for your personal basic supplies – decoupling.
          Check out regional currencies (with demurrage).
          Those regions are trying to decouple themselves partly from the bigger system, to close product exchange circles as locally as possible (keeping surplus local) and to enable some that would be non-existent, which can’t provide enough growth/profit for the national/global companies.

          PS: I’m aware that this doesn’t work for all products, but one has to start somewhere, no?
          Also, as I have been preaching for some time now, this is the only way to get a demurrage implemented and tested, our only chance to discourage monopolies from the get go. The same ones that buy politicians and all that other jazz..

  4. Ralph Buttigieg 2 years ago

    So if I understand it correctly, a $2500 subsidy will give a homeowner a free solar/battery setup that cuts their electricity bill by 30% How many years do people think it will be before the cost of such a package drops by $2500 or more? Will we see companies selling solar like mobile phones? Free solar on your roof in return of say a 10 year contract?

    • riley222 2 years ago

      Hadn’t really thought about it like that before, but Yeah, that is the way its going. A good thing IMO.

    • Steve Applin 2 years ago

      I think you’re confusing two different programs. The housing trust program gets solar/battery “free” and pays a tariff to the provider 30% lower than current market rates. Private homes get a $2,500 subsidy if they install a battery.

      It will be interesting to see what requirements need to be met to get the $2,500 subsidy.

      • Ralph Buttigieg 2 years ago

        Well OK what is the subsidy per household? Because thats going to be the required price reduction to get “”free” solar.

        • Steve Applin 2 years ago

          For the Tesla/Housing Trust program there is no subsidy and nobody is getting anything for free. Tesla is proposing to put a 5kW solar & a Powerwall 2 on 50,000 housing trust homes and then will become their retailer, selling the housing trust residents power at an agreed rate, currently 30% below market rates.

          The second program is for private homeowners, unrelated to the above initiative, to get a $2,500 subsidy towards a battery system. I’d assume there will be some requirements behind this like minimum battery size etc.

          • Ralph Buttigieg 2 years ago

            So are the residents paying anything at all besides the discounted electricity? Or is the government paying for the solar/battery package?

          • Hettie 2 years ago

            Read Steve’s comment again, Ralph. The answer is in there.

  5. Pixilico 2 years ago

    I hate the term “virtual power plant”. There’s nothing “virtual” about solar panels on the roofs and battery packs on the walls. Maybe distributed power production would be a better term to describe this novelty. And the real possibility to incorporate peer-to-peer transactions into it is just icing on the cake. Welcome to the 21st century, dear incumbents!

    • nakedChimp 2 years ago

      without the webbing of IT those panels and inverters and batteries would still be there, but couldn’t act as one entity.
      Thus it’s virtual.

      • Trevor Toomer 2 years ago

        This graph below shows how two Tesla Powerwalls (red and green), respond to so-called “droop settings” by autonomously and automatically injecting active power when the frequency (blue line) drops below the thresholds (dotted lines).
        If they acted autonomously and automatically injecting active power when the frequency drops, then they don’t need to be networked.

        • nakedChimp 2 years ago

          Yes, all those devices do that.

          But the virtual powerplant (or whatever it should be called) enables concerted actions that go further than just reacting or maintaining specs.
          They could for example project a future slump in energy input from solar due to clouds and advise the systems to keep charging during a time, were a lot of them wouldn’t do that and then release that energy when it is good for the bigger system, but not for the singular unit..

      • Pixilico 2 years ago

        Sorry for overestimating your intelligence.

        • nakedChimp 2 years ago

          Sorry, but:

          1) English isn’t my mother tongue, so I might miss something.

          2) I always like to learn, so please tell me what I miss.

          Mariam Webster:
          “occurring or existing primarily online”

          “Not physically existing as such but made by software to appear to do so.”

          As I understand it, the plant itself doesn’t exist without software actually creating it.
          But if that’s not virtual, how is it called then?
          It’s actions/effects are real, sure.

          • Hettie 2 years ago

            I think, Chimp, that you have missed nothing. Individually, there are 1100 rooftop systems. Linked by software, they become a 5.5mW generating organism. To all intents and purposes (the non-geek meaning of “virtually”) a power station.
            There are a few ESL contributors here. All of you put us monolingual Aussies to shame. Your grammar may not be quite perfect, but it is way better than that of many native English speakers.
            Great respect to you, RobertO, and MaxG, all ESL all fluent writers. If I have missed some other ESL contributors, my apologies. But the fact that I have missed you is testament to your proficiency.

    • Ian 2 years ago

      To the rooftop solar owner the grid is a virtual battery, and that is all that really counts. 😉

      • Hettie 2 years ago

        Indeed it is, and one that retains its charge even after three weeks of rain and heavy cloud.
        With blackouts so infrequent now in most places, barring falling trees bringing the power lines down, the case for batteries right now is a bit weak. When prices come down further, that will change, but staying connected still makes good sense.

      • Shilo 2 years ago

        Unless you have your battery and Inverter anywhere near the western sun!!!!! so both get very hot when trying to get power in and power out.
        Then the 73% can become much lower.

      • Pixilico 2 years ago

        When I said there’s a very real possibility of incorporating P2P transactions into solar panels and batteries In my mind the whole thing would be blockchained together as it lends itself to. So that neighbors can sell power to each other without a utility as the middleman and as the provider of last resort of THAT power obtained through the burning of FFs. Nice to think of the grid as a “virtual battery” if you’re not willing to think about how power is actually produced by those who are running it at present. The economics involved in blockchained distributed power supply should also be given room for improving due to increasing adoption rates, which is not a far-fetched assumption given the current trends.

    • neroden 2 years ago

      “Distributed power plant” is better than “virtual power plant”

      • Carl Raymond S 2 years ago

        Good point. It’s 100% real.

      • Pixilico 2 years ago

        Absolutely! The electricity production and storage assets are supposed to be distributed over many properties (connected with wires amongst each other, of course), but never implied as being stuck somehow in cyberspace. The management of the whole thing, however, can belong to a virtual ledger and transactions could take place automatically on a P2P basis. The 21st century can be a painful experience for incumbents if they can’t/won’t adapt to the developing technological paradigms we’re talking about.

  6. Steven Gannon 2 years ago

    No shenanigans from a Liberal govt? What’s going on? Did the renewables industry bribe them? (satire)

    • Joe 2 years ago

      The Pelican is saying all the ‘nice words’…so far. His test will be in the doing of his ‘nice words’. Just maybe The SA Libs do see the benefits in the path that ex-Premier Jay set.

  7. JackD 2 years ago

    One has to wonder what the old ETSA, SECV, SECNSW, QEGB, SECWA and HEC would be deploying these days if they had not been sold-off, disaggregated or corporatised. Would the Solar and Wind industries have taken off so much as they are now? Or would state governments still have been trying to extract the last amount of value out of their Coal generation assets? Its quite possible that the rise of renewable energy technologies has been helped by the privatisation but then again perhaps not, as the vested interests work the market to suit themselves. Its a moot point now anyway.

    • Mike Westerman 2 years ago

      I’m not sure you can conclude that: the early solar promotions came from state governments. Ergon may have resisted them for quite some time but has now thoroughly gotten behind them. Energex has been contemplating the transition for a long time. The original market design was primarily to ensure coal interests continued to dominate.

    • Hettie 2 years ago

      Interesting question.
      If those State bodies regarded the provision of power as an essential public service, it is likely that, as prices of wind and solar came down, they would have seen the value in adding them to the mix.
      BUT, it was privatisation that pushed prices up so that RE became competitive, even before their costs dived.
      I think you are right. Without privatisation, wind and large scale solar might have languished, with only rooftop solar taking off….
      All idle speculation, of course.

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