Tesla Energy and utility scale projects

[generalenthu]

G.E. Ousts Chief Just Over a Year After Picking Him to Lead a Turnaround

GE wrote off all the goodwill in its power business. That's pretty remarkable, given GE equipment is estimated to produce a third of world's electricity.

A friend at GE power recently mentioned that the idea of battery backed renewables pretty much stopped all new GE power projects. The idea that these are stranded assets has taken root.

 

[jhm]

Tesla increases the price of the Powerwall as demand greatly outpaces production

This is interesting. Demand for Powerwalls is so far ahead of supply that Tesla has raise price on Powerwall and hardware $1200, from $6600 to $7800.

 

[Ulmo]

G.E. Ousts Chief Just Over a Year After Picking Him to Lead a Turnaround

GE wrote off all the goodwill in its power business. That's pretty remarkable, given GE equipment is estimated to produce a third of world's electricity.

A friend at GE power recently mentioned that the idea of battery backed renewables pretty much stopped all new GE power projects. The idea that these are stranded assets has taken root.

I'm always amazed at the speed at which old globalist corporations pull the destruction lever. Sears, which had a ready-made catalog to place directly online, and would have become the behemoth Amazon if it had done so, on the same day that that was true, instead CLOSED its catalog division: completely STUPID! A trillion dollars for them to just TAKE, and they walked away from it. I suspect a combination of stupidity and Jeff Bezos having a sabateur inside Sears to shut it down.

Similar with GE: (1) Why wouldn't they embrace solar power? (2) Why wouldn't they embrace batteries? (3) Why wouldn't they embrace battery and solar control and management software and control systems and marketplaces? (4) Why wouldn't they start to make their own of all the three above as soon as possible and as thoroughly as possible? (4b) Why aren't there GE drones flying around sweeping off tracked solar projects with colocated batteries and remote batteries near electrical use areas? (5) Why isn't GE solving the neighborhood crisis in California of too many above-ground power lines and not enough below-ground power lines, (6) variable power (more batteries), (7) EV charging inftrastructure (batteries, wires, and control software, and markets), (8) solar storage and distribution (batteries, wires, control software, and markets), and (9) land real estate that makes a lot of this possible?

They could start on literally any aspect of any of those things.

If they're deciding they have absolutely nothing, then:

A. They are hiding a secret organization that will pop up with great mature marketplace products that are among the list I listed above or similar or better.
B. They have decided that a name is just a database entry, and today's name is Tesla/inverter companies/solar cell companies/solar panel installer companies/other battery companies/etc.
C. They are clueless even though they could easily go into this business realm.
D. They have diseases of management that cannot be solved easily, so it's better to just give up.

I could understand A or B, but if it's C or D, surely there's something they could do.

But, then, again, there's a lot of things I never understood about the destructionist generations that came about during the Baby Boom, and quite frankly, they have been diseased by foreign countries competing with USA who infiltrated our corporations and poisened them after stealing all their intellectual property and equipment.

 

[Ulmo]

According to Tesla Energy is ‘battery cell starved’ but the growth outlook is ‘crazy’, Elon said they are "battery cell starved". I understand that they're ramping up the Nevada battery cell GigaFactory, and that they are ramping up Model 3 which uses a lot of batteries, and they are ramping up Energy, but I want to know: exactly how much excess battery capacity does the GigaFactory have for Model 3? How much does it have available for the Energy division? How much is available for the PowerWall and PowerPack systems that is per spec and within reasonable cost from other suppliers (such as Samsung)? How much of Model 3 production could be carefully strategically postponed in order to allow enough batteries to go to Energy? How many battery cell lines are dedicatable to Energy and Car type batteries (they are different chemistry), and how many do they have dedicated to each now (and at what rates)? How fast can they switch between one chemistry and another on the same line (with good quality control output)?

I presume a lot of this is in flux, and some of it is considered not only proprietary but strategically secret. I'm only asking for that information that people have that does not violate their strategic secrets or that isn't useless noise due to flux.

 

[S'toon]

I'm always amazed at the speed at which old globalist corporations pull the destruction lever. Sears, which had a ready-made catalog to place directly online, and would have become the behemoth Amazon if it had done so, on the same day that that was true, instead CLOSED its catalog division: completely STUPID! A trillion dollars for them to just TAKE, and they walked away from it. I suspect a combination of stupidity and Jeff Bezos having a sabateur inside Sears to shut it down.

Similar with GE: (1) Why wouldn't they embrace solar power? (2) Why wouldn't they embrace batteries? (3) Why wouldn't they embrace battery and solar control and management software and control systems and marketplaces? (4) Why wouldn't they start to make their own of all the three above as soon as possible and as thoroughly as possible? (4b) Why aren't there GE drones flying around sweeping off tracked solar projects with colocated batteries and remote batteries near electrical use areas? (5) Why isn't GE solving the neighborhood crisis in California of too many above-ground power lines and not enough below-ground power lines, (6) variable power (more batteries), (7) EV charging inftrastructure (batteries, wires, and control software, and markets), (8) solar storage and distribution (batteries, wires, control software, and markets), and (9) land real estate that makes a lot of this possible?

They could start on literally any aspect of any of those things.

If they're deciding they have absolutely nothing, then:

A. They are hiding a secret organization that will pop up with great mature marketplace products that are among the list I listed above or similar or better.
B. They have decided that a name is just a database entry, and today's name is Tesla/inverter companies/solar cell companies/solar panel installer companies/other battery companies/etc.
C. They are clueless even though they could easily go into this business realm.
D. They have diseases of management that cannot be solved easily, so it's better to just give up.

I could understand A or B, but if it's C or D, surely there's something they could do.

But, then, again, there's a lot of things I never understood about the destructionist generations that came about during the Baby Boom, and quite frankly, they have been diseased by foreign countries competing with USA who infiltrated our corporations and poisened them after stealing all their intellectual property and equipment.

Amazon didn't need to have a saboteur inside Sears. Eddie Lampert destroyed it on his own trying to run it with Ayn Randian Libertarian principles.

The Ayn Rand-Worshipping Sears CEO That Blew Up His Multibillion Dollar Empire

How a Libertarian Used Ayn Rand's Crazy Philosophy to Drive Sears Into the Ground

Ayn Rand killed Sears

 

[ItsNotAboutTheMoney]

Tesla increases the price of the Powerwall as demand greatly outpaces production

This is interesting. Demand for Powerwalls is so far ahead of supply that Tesla has raise price on Powerwall and hardware $1200, from $6600 to $7800.

Or Tesla has had to raise the price by $81/usable kWh to make it viable|comparable.

 

[jhm]

Or Tesla has had to raise the price by $81/usable kWh to make it viable|comparable.

That sort of bearish spin is irrelevant. The price should go up enough to accelerate build out of supply. Put another way, if Tesla gets higher margin on 2170 cell going into the Model 3 than going into the Powerwall, then there is an opportunity cost associated with sacrificing Model 3 production to produce Powerwalls. To avoid this sort of opportunity cost, Tesla can simply increase the margin on Powerwalls to match that on Model 3, then build ramp up supply on both. So my point here is that it need not be the case that the Powerwall had a negative margin. Rather it is sufficient motivation that the margin on Powerwalls were less than on Model 3. So long as Tesla is starved for 2170 cells, it makes microeconomic sense to price so as to equalize margin per cell.

 

[TheTalkingMule]

Tesla's energy gameplan isn't about the money, it's about the mission. It's not a stretch to assume Elon had Powerwalls priced at breakeven or worse to get the market moving. That's standard practice for disruption.

I think what we're seeing now is a lack of real competition and massive massive demand. In that environment it's foolish to simply break even, especially if every dollar of incremental profit moves the mission forward even faster.

Reeeeeally getting anxious to hear the next phase of residential energy offerings from Tesla. With profitability either already here or just around the corner, they could easily announce the next big thing this coming spring.

 

[jhm]

Amazon didn't need to have a saboteur inside Sears. Eddie Lampert destroyed it on his own trying to run it with Ayn Randian Libertarian principles.

The Ayn Rand-Worshipping Sears CEO That Blew Up His Multibillion Dollar Empire

How a Libertarian Used Ayn Rand's Crazy Philosophy to Drive Sears Into the Ground

Ayn Rand killed Sears

In the late 1990s I worked with a guy who was a marketing analysts at Sears. They had closed down the catalogue business a few years before ecommerce was a thing. It had been steadily losing money. They simply did not have the foresight in the mid-1990s to see how the internet could revitalize the catalogue business.

This coworker told me about how they had regretted the decision a year later, but realistically it was not at all clear that putting the catalogue online would have produced an better results. Lot's of dotcoms had sprung up and failed by the time he told me about all of this. Clearly Amazon was able to do something quite special that few retailers have been able to replicate.

Putting print catalogue online is no more a sure thing as putting a battery pack drivetrain into an ICE car. With tech disruption, you need not just the tech piece, but the right sort of business models and entrepreneurial vision to make it all come together.

The fate was sealed for Sears long before Eddie Lampert came along. Even so, making managers fight with each other seems quite incompatible with delivering an innovative and seamless customer experience. Indeed, much of the disadvantage that legacy automakers face is that competition among managers pits EV managers against well aligned ICE managers. So that make for a very frustrating environment for innovation.

 

[jhm]

The “other” big battery that has quietly changed thinking about the grid

Soon even oil and gas producers will want their own batteries.

 

[EinSV]

South Australia is moving forward with its second large virtual power plant project, with 40,000 low income households expected to install 400 MWh of batteries supported by government subsidies of up to $6000 (Aus.) for 10kWh batteries. Sonnen gets exclusivity for the first 9 weeks to support its new battery plant in South Australia, but it looks like Tesla and other suppliers will be able to participate after the 9 week exclusivity period. South Australia opens biggest household battery storage support scheme

The first stage of the other South Australia project with Tesla Powerwalls to be installed along with rooftop solar in 50,000 homes in South Australia is also underway, although the reneweconomy article raises a question of whether the final stage will go forward now that the government-run project has started although in the past they have said they plan to do both. South Australia's Virtual Power Plant | Virtual Power Plant

 

[TheTalkingMule]

South Australia is moving forward with its second large virtual power plant project, with 40,000 low income households expected to install 400 MWh of batteries supported by government subsidies of up to $6000 (Aus.) for 10kWh batteries.

Why does everyone outside of Germany seem to lean toward direct subsidies rather than simply incentivizing the market? Why hand everyone $6k when you can just pay them more for providing kWh at peak demand?

 

[EinSV]

Why does everyone outside of Germany seem to lean toward direct subsidies rather than simply incentivizing the market? Why hand everyone $6k when you can just pay them more for providing kWh at peak demand?

A bit OT but California's SGIP plan for household storage subsidies can be generous but has one of the worst designs imaginable. It is extremely opaque so it is hard for consumers to predict the benefit to their pocketbook. Add to that a healthy helping of bureacratic red tape and ridiculous limits by producer that punish the low cost provider (Tesla) and tilt the playing field toward more expensive providers. A simpler, more transparent subsidy that is producer agnostic would save consumers money and do more to encourage adoption of household storage.

Back to your point -- incentivizing the market through pricing mechanisms is arguably the most "rational" way to structure incentives but has the downside of more uncertainty than well designed subsidies, which might be better at encouraging adoption and kick-starting the household storage market. I agree that in the long run pricing mechanisms may be the way to go, although it can be hard to capture all of the benefits that household batteries provide (especially if they are networked and can be used for a variety of grid services).

 

[ItsNotAboutTheMoney]

That sort of bearish spin is irrelevant. The price should go up enough to accelerate build out of supply. Put another way, if Tesla gets higher margin on 2170 cell going into the Model 3 than going into the Powerwall, then there is an opportunity cost associated with sacrificing Model 3 production to produce Powerwalls. To avoid this sort of opportunity cost, Tesla can simply increase the margin on Powerwalls to match that on Model 3, then build ramp up supply on both. So my point here is that it need not be the case that the Powerwall had a negative margin. Rather it is sufficient motivation that the margin on Powerwalls were less than on Model 3. So long as Tesla is starved for 2170 cells, it makes microeconomic sense to price so as to equalize margin per cell.

I was addressing your implication that they were exploiting demand.

If they're raising prices to match margin, then it is much less about the product demand and much more about manufacturing cost relative to price. I did the kWh math to point out that it's a significant increase in the cost.

In the Q3 earnings call JB mentioned external cell supply. In the Q2 earnings call they talked about getting energy to positive margin in 2019. It suggests that they need GF cell supply to get the margins they want, and to be able to respond to the market over time with lower prices. But when will they have GF cell supply for Powerwall? Tesla will be selling a high proportion of 3LRs for the next 9 to 12 months and are trying to ramp production further. But it could at least give them a good hedge against 3 production challenges.

 

[Buckminster]

Is Australia on the verge of having too much solar energy? | Tristan Edis
If only there was an answer to this nice to have problem...

 

[EinSV]

Is Australia on the verge of having too much solar energy? | Tristan Edis
If only there was an answer to this nice to have problem...

It's embarrassing to see a FUD opinion like that not even mention storage and still be deemed worthy of publication. And it is annoying that even the so-called "liberal" media is such a terrible source of information about EVs and storage.

 

[neroden]

In the late 1990s I worked with a guy who was a marketing analysts at Sears. They had closed down the catalogue business a few years before ecommerce was a thing. It had been steadily losing money. They simply did not have the foresight in the mid-1990s to see how the internet could revitalize the catalogue business.

E-commerce had already started by the early 1990s. I was ordering things from people who I emailed on the Internet. Payment was... tedious, involving mailing checks and hoping you weren't getting scammed... but if anyone at Sears had had a clue, they could have been acting by then.

This coworker told me about how they had regretted the decision a year later, but realistically it was not at all clear that putting the catalogue online would have produced an better results. Lot's of dotcoms had sprung up and failed by the time he told me about all of this. Clearly Amazon was able to do something quite special that few retailers have been able to replicate.

And yet... many many small retailers struck it big on the Internet and are still big. I knew why, and I told absolutely every small business owner I knew: the key was to *specialize*. With the Internet, if you were the world specialist in a highly narrow area, you could advertise your highly specialized catalog to the entire world, whereas previously you could only sell to a single city, or to the people you managed to reach with your catalog. I know a number of these specialty retailers, which often still have tiny neighborhood storefronts, and multimillion dollar online sales. Some of them still only have static websites, and it's still working.

Perhaps Sears's problem was that they didn't specialize in anything, so they couldn't become the world specialist in anything. Amazon didn't specialize either, which makes it unusual, but then again (a) Amazon also didn't make any money, and (b) Amazon ended up simply being a conduit for all those specialized retailers I mentioned earlier, most of whom now list on Amazon Marketplace. This wasn't Sears's business model; Sears was too vertically integrated to become Amazon.

 

[jhm]

E-commerce had already started by the early 1990s. I was ordering things from people who I emailed on the Internet. Payment was... tedious, involving mailing checks and hoping you weren't getting scammed... but if anyone at Sears had had a clue, they could have been acting by then.


And yet... many many small retailers struck it big on the Internet and are still big. I knew why, and I told absolutely every small business owner I knew: the key was to *specialize*. With the Internet, if you were the world specialist in a highly narrow area, you could advertise your highly specialized catalog to the entire world, whereas previously you could only sell to a single city, or to the people you managed to reach with your catalog. I know a number of these specialty retailers, which often still have tiny neighborhood storefronts, and multimillion dollar online sales. Some of them still only have static websites, and it's still working.

Perhaps Sears's problem was that they didn't specialize in anything, so they couldn't become the world specialist in anything. Amazon didn't specialize either, which makes it unusual, but then again (a) Amazon also didn't make any money, and (b) Amazon ended up simply being a conduit for all those specialized retailers I mentioned earlier, most of whom now list on Amazon Marketplace. This wasn't Sears's business model; Sears was too vertically integrated to become Amazon.

I only know what my coworker told me. They had shut down the catalogue business before they knew ecommerce was a thing.

 

[EinSV]

Some US grid operators are already responding to regulatory changes driven by FERC Order 841 to open up wholesale markets to better accommodate storage. Cool that this applies not to just large Powerpack/Megapack type installations but also smaller batteries like Powerwall and virtual power plants.

Ahead of biggest energy storage rule change yet, US’ transmission network operators open up markets

At the same time, Tesla and others are trying to spur rule changes in Australia to allow storage's contribution to the grid to be better captured and compensated, which could accelerate adoption of storage.

Why battery storage in Australia is unable to back up wind and solar

Sorting out the regulatory landscape to better value all of storage's contributions to the grid should improve the economics of installing storage and speed up the adoption curve.

 

[aubreymcfato]

Interesting new project with Powerpacks:
https://electrek.co/2018/11/05/tesla-shared-powerbank/