Agree on much bigger. And therefor, in time, with volume, more profitable. But in small volumes I think Solar City home customers will be more profitable on a $/kWh base, and as I wrote, I think they start slowly. Therefor I still think thats the right priority - yet.
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Tesla Gigafactory Investor Thread
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Agree on much bigger. And therefor, in time, with volume, more profitable. But in small volumes I think Solar City home customers will be more profitable on a $/kWh base, and as I wrote, I think they start slowly. Therefor I still think thats the right priority - yet.
jhm
Well-Known Member
I think I would give priority to SolarCity and other solar customers over the utilities. I believe they would be willing to pay a higher price, higher margin. But more importantly, it is a stronger move toward distributed power generation and renewable energy. Politically it's a stronger move. Selling to the utilities will further the critique that Tesla is just trying to make money off off subsidies and regulatory mandates. But rooftop solar customers are buying because they want to, not because the State of California or whatever says they have to. Moreover, I am critical of the Oncor proposal in Texas because I think they are just setting themselves up to protect themselves agsinst disruption by batteries and will be pushing the cost onto ratepayers. Ratepayers have little choice in this, but homeowners and businesses with solar are willing to buy on their own behalf. Basically, offering low margin batteries to utilities when homeowners and businesses are willing to pay more move in the direction of preserving the status quo monopolies of the utilities. Now if utilities want to pay the same price for a limited supply as homeowners, that's fair play. Moreover, if utilities want to lighten up on their political resistance to rooftop solar and stop interfering with SolarCity and other installer, that would be fair play. But if they expect Tesla to cut them a special deal and expect taxpayers and ratepayers to pick up the rest of the tab and preserve their monopoly power, I say no deal.
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Yeah, that pretty much how I would prioritize it, but I also think that's the order of who would be willing to pay a higher price and who would most value the value added engineering Tesla can deliver. Utilities can buy cheap batteries from any number of vendors, but Tesla designs advanced computer controlled energy storage devices. The technology they add to cells is the critical thing that commands a high margin.
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Yeah, that pretty much how I would prioritize it, but I also think that's the order of who would be willing to pay a higher price and who would most value the value added engineering Tesla can deliver. Utilities can buy cheap batteries from any number of vendors, but Tesla designs advanced computer controlled energy storage devices. The technology they add to cells is the critical thing that commands a high margin.
physicsfita
Member
A question for those of you who can estimate these things better than I: What percentage of the GF's stationary-storage production will be headed toward supercharger installations to (a) reduce demand charges and/or (b) store energy from the solar canopies that are promised to be built?
JRP3
Hyperactive Member
I think it depends on what type of grid support they would be supplying. As I understand it the shorter response time the higher the value, so a frequency regulation application has a high value since it smooths out generating demand fluctuations and avoids the need for the least efficient operational modes, i.e. quickly ramping up and down generators. Same thing with peak load leveling though on a larger time scale and somewhat lower value.
My view has always been that Tesla will send the "seconds" from cell production into stationary storage. The "prime" cells go to automotive. As to your question, I'd expect that Tesla is going to use only aged batteries from Model Ss at the Superchargers, not any of the GF production.
jhm
Well-Known Member
Yes, this would make sense. I'm curious if you have any sort of financial model for this. I'm not challenging anythig, just curious about how it would create enough value to support a high margin. How many cycles per day would be typical?
JRP3
Hyperactive Member
No I can't put any numbers to it, just speculating from discussions I've had with those who know more about it.
jhm
Well-Known Member
Fair enough, my curse is always to look for a mathematical model in things.
Perhaps you may find the discussion of electric ferries the high margin battery pack thread. Ferries can make substantial value out of batteries by rapidly cycling with every voyage, maybe ten or more cycles per day. If you've got a battery that can take 10,000 cycles, with many applications it is hard to use that many cycles in a reasonable payback period, but a ferry can make 10,000 voyages within three years. So I'm wondering if the high frequency smoothing works on basically the same principle.
chickensevil
Active Member
In a perfect world assuming we are just looking at solar as you input (which very predictable) you would have enough generation to fill the batteries during the day so they cycle out to depleted (or close to it) by the next morning as the sun comes out. Now since you would nees to plan for a worst case day and some spare you would almost always have more storage and over generation happening than you needed in order to cover that. But it would essentially be a single cycle per day.
Now on the other hand if you were attacking this from a "flatten the line" angle it would depend on how many times your target load peaked each day as to how many cycles you would hit on the pack. But from the conversations JB and Elon have talked about being stationary storage is like a day off for a battery and pack designed for a car. Because the highest discharge is nothing close to a car and the highest recharge is also nothing close. And keep in mind with regen we are dumping a decent amount of power back INTO the pack albiet in short bursts and then back to massively discharging it.
So take a look at their example draw during the symposium JB did last year showing one of the SCs with the pack on it. It really helped mellow out their peaks and looked like on the capture that it drained out the pack totally probably a good 3 or 4 times (as I recall) within one day. Still we are talking about slow draws and recharges. So I would think the packs would rather enjoy that kind of workout over what we are doing to them in the cars.
I don't know if this helps you with anything you were asking for... But there it is!
Awesome and incredibly long article in Fortune about the Gigafactory incentive negotiations. Tesla seemed to allow Diarmuid O'Connell to be rather open with his discussions on this one. Also, great pic of construction progress on the top and in video with Lance Gillman.
Inside Elon Musks $1.4 billion score - Fortune
Inside Elon Musks $1.4 billion score - Fortune
jhm
Well-Known Member
I agree. And the Supercharger application is actually quite impressive. The utilities love to complain about how solar and wind are intermittent, but in fact demand is quite intermittent. SC storage systems supply very high power demanded on a radically intermittent basis with a trickle of low power supplied. To be sure this demand is derived from the use of batteries used in transportation. So it is part of how EVs arb the transportation fuel market by concentrating energy for rapid recharging.
Another thing to note about the SC application is that it does envolve multipe cycles per day. So the arbitrage from low power input to high power output does not have to be great to generate a strong return. If you save say $0.05 / kWh / cycle for 8 cycles per day. You net $438 savings per kWh capacity in three years. And if you can pull that off with used or low grade cells so much the better. So once you recognize that cycle frequency is key making SC batteries cost effective, youbalso see why you don't want this system in your own home. Basically for home use you are unlikely to get more than 1 cycle per day so it would take you decades to get enough cycles to make this pay for itself.
I also think SC stations have the potential to provide peak power back to the grid. I don't know if Tesla has this arrangement with any utility, but in priciple the hardware is all there. As Tesla builds out a fleet of SC stations it could also function as merchant of instant dispatchable power. I think each station may be capable of close to 1MW since it can handle 6 cars at 130 kW. I don't think this service alone could pay for the battery pack, but it could make the net cost of electricity pretty low. Suppose in an average day the SC discharges 100 kWh to the grid at a peak price of $0.40 / kWh and 850 kWh to cars for free. If it could charge 1000 kWh at an average price of $0.08 / kWh, then the net cost per day is $40 = 80 - 40. So the net cost per kWh delivered to cars is just $0.047 (=40/850). So by selling a coulpe of supercharges per day to the grid, Tesla can cover a substantial fraction of the cost to deliver free charges to customers. Of course another way to take this is to contemplate selling charges to EV owners who do not have unlimited access to the network. Selling to non-access vehicles at say $0.80/minute or $$0.40/kWh (could take up too much time if charging at a low rate) would have the same effect of producing a small amount of revenue to offset the cost of power for access members. In any case, I digress. The main point is that SC infrastructure has some revenue generating potential particularly to provide peak power to the grid. Not only does this offset some operating cost, but it enables Tesla to put out more capacatity to better serve customers. We should like it if we never have to wait in line to get Supercharged, but this reqires a lot of assets to sit idle, or so it would appear.
Krugerrand
Meow
*le sigh*
Leave it the union to 'have concerns' and not be able to balance those concerns with a possible (very likely) positive outcome for their workers. Don't like how Tesla is contracting the job, don't like that there's no specific wage listed so Tesla might under pay, don't think Tesla will abide by the 50% minimum of Nevadan workers, blah, blah, blah... Control freaks!
JRP3
Hyperactive Member
Get ready for the wackos to come out of the woodwork. I predict an appearance by Sam Dehen (sp?)
I just don't understand how you could make such disparaging statements regarding unions. :biggrin::biggrin:
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jhm
Well-Known Member
I like that Tesla is taking a more hands-on approach to contracting Gigafactory construction. I think there will be a lot of innovation in the whole effort, and it makes sense to keep a close grip on the process. Moreover, I expect Tesla to build many more Gigafactories, so it benefits Tesla to build internal competency in overseeing construction.
I really do not think the unions have anything to worry about with Tesla taking a more active role. Tesla has always treated unions and workers with respect. They even give free office space to the UAW in the Fremont plant.
I really do not think the unions have anything to worry about with Tesla taking a more active role. Tesla has always treated unions and workers with respect. They even give free office space to the UAW in the Fremont plant.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Like we've seen Tesla focusing heavily on manufacturing quality and a from the ground up systems approach to their production I think they will go about it the same way with the GF. They'll ramp up slowly but will be very good at building GFs once the battery revolution really takes off...
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