Vector says Tesla storage a game-changer, mulls push into Australia

There is no doubt that New Zealand electricity network operator Vector Energy is a big fan of the new Tesla battery storage technology.

CEO Simon McKenzie was one of three Vector executives that made the trip to California at the end of April to attend the much awaited, and much hyped announcement by Tesla of its entry into the stationary energy storage market.

But is it really that big a deal?

“Yes,” says McKenzie, one of the most progressive thinkers in the utility space and the pioneer of a solar-storage leasing system that is now rapidly being copied by panicked stricken industry peers.

“From my professional perspective – I think it is the biggest fundamental change in the energy sector.”

McKenzie says the Tesla announcement was dubbed by its marketing people as “the missing link”, and he says that is exactly what it is.

Most energy markets suffer what is know as the “twin peaks”, the morning and afternoon energy demands that push usage to its highest levels.

They used to be separated by a plateau of day-time usage, but that has now been eroded by solar energy to the point it now looks more like a duck, and wholesale prices – which once peaked during the day – are now going into negative territoty.

That has changed the economics, the dynamics and the culture of the energy industry, and McKenzie says that will be accelerated by the introduction of cost competitive storage.

“Everything has been built to cater for those twin peaks,” McKenzie told RenewEconomy in an interview late last week.

“The last baston of the energy sector was never being able to store at scale. Being able to access that will make a hell of an impression. It will smooth those peaks …. and take those peaks out of the system. That will bring down the overall cost of generation.”

McKenzie says the biggest changes are likely to happen at utility scale, but residential storage will also have a place for customers who want to manage their costs, and to control their loads and demand.

McKenzie says the Tesla storage offering is 50 per cent cheaper than any alternative presented to his company to date.

“It’s a lot cheaper than other options. It is really good aesthetically, and if you are going to have a panel on the wall, you don’t want a brick. It’s got that ease of use, screw it on the wall, plug and play and it’s low cost and aesthetic. And it is covered by 10 years of warranty.”

McKenzie says Vector has a number of projects in mind for the Tesla products – which come in home, business and utility scale configurations. It expects to get its first examples within the next three to six months.

McKenzie says Vector will be using the Tesla product to extend beyond its domestic network around Auckland, in much the same way as it is doing with smart meters.

And that may include Australia.

“At moment in Australia we are focused on smart metering. But we would not rule out opportunities to bring battery storage and technologies in the information space into Australia.”