Tesla plugs into mar­ket for elec­tric­ity stor­age

The elec­tric car maker is ex­pected to an­nounce it’s cre­at­ing bat­ter­ies to let home­own­ers and busi­nesses store power

Los Angeles Times - - BUSINESS - By Jerry Hirsch

Bil­lion­aire Elon Musk’s Tesla Mo­tors Inc. is ex­pected to an­nounce next week that it will ex­pand into a new busi­ness of­fer­ing bat­tery-based en­ergy stor­age for res­i­den­tial and com­mer­cial cus­tomers.

Doc­u­ments filed with the Cal­i­for­nia Public Util­i­ties Com­mis­sion show that Tesla al­ready has launched pi­lot projects that lever­age tech­nol­ogy it has de­vel­oped for elec­tric car bat­ter­ies to cre­ate a way for home­own­ers and busi­nesses to store power.

The Palo Alto au­tomaker is sched­uled to col­lect $65 mil­lion in state in­cen­tives for its projects un­der the ad­vanced stor­age tech­nol­ogy por­tion of the PUC’s Self-Gen­er­a­tion In­cen­tive Pro­gram, ac­cord­ing to Ter­rie Pros­per, a spokes­woman for the agency.

The elec­tric car com­pany has started to brief en­vi­ron­men­tal groups and an­a­lysts on its plans. Re­tail­ing gi­ant Wal-Mart Stores Inc. con­firmed that it is par­tic­i­pat­ing in the test pro­grams and ex­pects to pur­chase more Tesla bat­tery sys­tems.

So­larCity, a so­lar en­ergy com­pany, has in­stalled Tesla bat­ter­ies at sev­eral Wal-Mart sites in Cal­i­for­nia “to help man­age peak en­ergy de­mand, and will likely be adding more in the com­ing years,” said Kevin Gard­ner, a Wal­Mart spokesman.

Tesla Chief Ex­ec­u­tive Musk is also the chair­man of San Ma­teo, Calif.based So­larCity.

Last month, Musk said on Twit­ter that he would an­nounce a new prod­uct line — not a car — on Thurs­day, but has not elab­o­rated. The an­nounce­ment will be made at the au­tomaker’s de­sign cen­ter in Hawthorne.

“We’ll have more to share next week,” spokes­woman Khobi Brook­lyn said.

Stor­ing elec­tric­ity ef­fi­ciently, in­ex­pen­sively and safely is a prob­lem that has vexed the power in­dus­try since elec­tric­ity was first har­nessed. But such stor­age has huge im­pli­ca­tions for bol­ster­ing the na­tional elec­tric­ity grid and re­duc­ing pol­lu­tion from power gen­er­a­tion.

Home­own­ers and busi­nesses, for ex­am­ple, could charge bat­ter­ies at night, when there is sur­plus gen­er­a­tion and rates are cheap, and then use the power dur­ing the day, when there is a heavy load on the grid and rates are high­est.

“You can look at the bat­tery as an as­set on the grid and then you can start to fig­ure out the fi­nan­cial op­por­tu­ni­ties,” said Ra­jit Gadh, direc­tor of

‘Tesla is look­ing to get into en­ergy stor­age whether it is on four wheels or sta­tion­ary.’

— MAX BAUMHEFNER, an at­tor­ney with the Nat­u­ral Re­sources De­fense Coun­cil who was briefed by the au­tomaker

UCLA’s Smart Grid En­ergy Re­search Cen­ter.

Tesla’s strat­egy is de­signed to lever­age a planned $5-bil­lion in­vest­ment by the car com­pany, bat­tery cell man­u­fac­turer Pana­sonic and other part­ners in a mas­sive lithium-ion bat­tery “gi­gafac­tory” un­der con­struc­tion near Reno.

Musk has said the fac­tory will slash the cost of pro­duc­ing bat­ter­ies about 30% and is cru­cial to the au­tomaker’s plans to in­tro­duce a small elec­tric fam­ily sedan that will sell in the $30,000 range af­ter gov­ern­ment re­bates and in­cen­tives. Tesla is look­ing for other prof­itable ways to tap pro­duc­tion from the plant.

“The gi­gafac­tory is a big play for the whole en­ergy world,” said Max Baumhefner, an at­tor­ney with the Nat­u­ral Re­sources De­fense Coun­cil who was briefed by the au­tomaker.

A steady in­crease in so­larand wind-gen­er­ated power is in­creas­ing the need to de­velop ef­fi­cient elec­tric­ity stor­age sys­tems, Baumhefner said. That’s be­cause gen­er­a­tion from such sources can be al­most lim­it­less and needs to go some­where.

Us­ing ded­i­cated bat­tery sys­tems as well as stor­age de­rived from elec­tric ve­hi­cle bat­ter­ies that are no longer strong enough for au­to­mo­tive use but still have life “makes a lot of sense,” he said. There al­ready are enough bat­ter­ies op­er­at­ing in the na­tion’s small elec­tric car fleet to power all the homes in a city the size of Wash­ing­ton for a day, Baumhefner said.

Other au­tomak­ers, in­clud­ing BMW, have launched elec­tric ve­hi­cle bat­tery stor­age pi­lot pro­grams in Cal­i­for­nia. One BMW pro­gram pays elec­tric car driv­ers to time their charges to pe­ri­ods that even out the load on the grid. It also has a bank of spent EV bat­ter­ies in Moun­tain View, Calif., that it charges with so­lar power and uses to feed power into the grid at peak times.

Spend­ing on mi­cro­grid projects — which en­com­pass a va­ri­ety of en­ergy gen­er­a­tion and stor­age tech­nolo­gies — in the U.S. is poised to grow to $19.9 bil­lion in 2020 from $4.3 bil­lion in 2013, ac­cord­ing to Nav­i­gant Re­search.

In De­cem­ber, the PUC held a work­shop to craft en­ergy stor­age and in­ter­con­nec­tion rules. One of the pan­elists was Ma­teo Jaramillo, direc­tor of pow­er­train busi­ness devel­op­ment at Tesla Mo­tors. An­other was Ryan Han­ley, direc­tor of grid en­gi­neer­ing so­lu­tions at So­larCity.

Dur­ing the pre­sen­ta­tion Jaramillo out­lined sev­eral Tesla pi­lot projects for us­ing grid-con­nected bat­ter­ies to store elec­tric­ity.

He dis­cussed the dif­fer­ing re­quire­ments among ma­jor util­i­ties for teleme­try re­quire­ments — the way large bat­tery stor­age sys­tems com­mu­ni­cate with the grid to pre­vent power surges and gaps — and sug­gested low-cost op­tions.

Baumhefner said, “Tesla is look­ing to get into en­ergy stor­age whether it is on four wheels or sta­tion­ary.”

Tesla Mo­tors

CON­STRUC­TION IS UN­DER­WAY on Tesla’s mas­sive lithium-ion bat­tery “gi­gafac­tory” near Reno.

Tesla Mo­tors

A REN­DER­ING

shows Tesla’s com­pleted “gi­gafac­tory,” which is un­der con­struc­tion in Sparks, Nev.

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