Tesla To Let Owners Be Utility Peaker Plants & Make Money, Speculates Gali

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Screenshot from HyperChange YouTube Channel

HyperChange’s Galileo Russell (Gali) has been on the leading edge of trying to figure out all the things that Tesla will announce on Battery Day next month (or whenever it happens). He figured out almost a year ago that Tesla would use Maxwell’s dry electrode tech to greatly reduce the capital costs of making battery cells. These enhanced battery cells are also expected to have greater energy density (which could allow electric airplanes to travel farther) and improved durability. The “million-mile battery” has been mentioned several times and everyone thinks that it is mainly needed for the robotaxi, since most people don’t use their personal cars enough that they really need a battery that lasts 100 years (at 10,000 miles a year).

He also thinks that Tesla will allow owners who want create a new income stream to use their car’s battery to do so. It will cause wear and tear on your battery, but at least you don’t have to worry about cleaning your car after every robotaxi ride or keeping passengers from getting COVID-19 in your robotaxi.

All About Solving The Duck Curve Problem

By ArnoldReinhold, CC BY-SA license

One of the largest problems for utilities that want to take advantage of the low costs of solar is the “Duck Curve.” Solar electricity is cheap, but you can’t use it in the evening without transmitting it long distances or storing it. Both are rather expensive.

How would this work?

  1. You would plug your car into the wall (Tesla will probably sell a new inverter/converter box for you to mount in your garage).
  2. You will use the Tesla app on your phone to configure your Autobidder options.
  3. Your battery charges up in the middle of the day when solar energy is dirt cheap.
  4. Your battery sells the energy back to the utility in the evening when expensive peaker plants are charging the utility a fortune.

How Much Could You Earn?

Some people will want to maximize their earnings. Others don’t want to be caught with only 10 miles of range in their car, so will set the software to only use a smaller part of their battery. But just for fun, let’s perform the following “back of the envelope” calculations.

I went to my local utility (Tampa Electric) website and checked its Time of Use Rates to get an idea of how much more the utility charges for peak electricity instead of off-peak electricity. Tampa Electric has so little solar that they still consider peak in the middle of the day. That will change over the next few years. It shows the high rates are about 15 cents an hour and the low rates are about 6 cents an hour. So, there is about a 9 cent an hour arbitrage opportunity. Of course, the utility is going to take a big cut of that since you are using their wires to transmit the electricity to who needs it (unless you just use it behind the meter in your own house).

Let’s say you have a 75 kWh battery in your Tesla and you are willing to use 50 kWh a day to buy at low electricity rates (you could also use your roof to produce solar, but let’s leave that for another day) at 6 cents a hour ($0.06 times 50 kWh is $3.00) and sell it back to the utility at 15 cents ($0.15 times 50 = $7.50). You would would make $4.50 a day. Let’s say the utility took half your profit for using the wires and you could net $2.25 a day. Multiplied by 300 days (you can’t do it when you are traveling), that would be $675 ($2.25 times 300 days). Well, that won’t pay for the car, but it might make one payment a year and help stabilize the grid.

Hopefully, Autobidder will be able to earn more than that, but I think the price of electricity will be going down from both renewable (because of technology) and fossil fuel plants (because of COVID-19 has reduced demand and prices).

So, this may not make a ton of money, but it can solve a lot utility issues.

You could also just use the system as an emergency power source (hurricanes, fires, floods, and other disasters cause power outages for many people). You could use your car to power your home (and when you get low, go charge it up and come back with a full battery for another few days power). That’s where this really saves money. If you want 50 kWh of Powerwalls, you would need 4 Powerwalls at $7,600 a piece. If you can just dedicate part of your battery to provided that same function, you save $30,400. On the other hand, with the recent rumors of Tesla being on the verge of $60 kWh battery cells, 50 kWh of batteries is only worth $3,000 (plus packaging and electronics and markup).

I’m not sure how this will all play out, but it is going to be very exciting to watch and enjoy all of these new options Tesla might give us to play with.

If you decide to order a Tesla, use a friend’s referral code to get 1,000 miles of free Supercharging on a Tesla Model S, Model X, or Model 3 (you can’t use it on the Model Y or Cybertruck yet). Now good for $250 off either solar panels or a solar roof, too! If you don’t have any friends with a Tesla, use mine: https://ts.la/paul92237

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Paul Fosse

I have been a software engineer for over 30 years, first developing EDI software, then developing data warehouse systems. Along the way, I've also had the chance to help start a software consulting firm and do portfolio management. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @atj721 Tesla investor. Tesla referral code: https://ts.la/paul92237

Paul Fosse has 230 posts and counting. See all posts by Paul Fosse