Tesla Stationary Storage Investors Thread

[Robert.Boston]

Tesla has a slew of jobs posted for Stationary Storage. These job descriptions have shed some light on Tesla's thinking, e.g.:

The mission of Tesla is to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible. As electric cars are only as clean as the grids that charge them, Tesla has also developed a business unit built on top of the same vehicle powertrain technology to allow for increasing levels of renewable generation on the grid. Furthermore, the suite of grid-connected battery systems developed by Tesla also performs a variety of high value functions for utilities, businesses, and residential customers. Stationary Storage will be a multi-billion dollar per year business unit in the near term and the fast-growing team is adding top team members for engineering, business, and sales.

Tesla is planning on addressing all scales of storage, as this job description states:

The Stationary Storage team at Tesla Motors is bringing battery technology to the grid to facilitate a renewable energy ecosystem and increase grid reliability in places where it is lacking. Tesla is leveraging its breakthrough powertrain technology and manufacturing scale to develop and deploy grid connected storage at residential, industrial, and utility scales.
The Stationary Storage team is small, committed, and fast moving. ... You must have a genuine passion for engineering products that will fundamentally change the world’s energy infrastructure ....

Some of these installations are much bigger projects than batteries in someone's closet:

The Stationary Storage Site Development and Installation Manager role entails active program coordination for all phases of Tesla’s Stationary storage deployment projects, including feasibility, layout, and design; utility design, easements, permitting, construction, planning, defining schedule, budgets, material and equipment planning and requisition, site commissioning, and close-out.

Tesla recognizes that there will be regulatory hurdles and that rules will need to change for this business to thrive everywhere (if I were me 20 years ago, this is the job I'd be applying for

As the electric industry undergoes a time of great change, policy, regulatory, and legislative support are all key to the broad based success of stationary storage. Tesla’s perspective must be represented among all the voices providing guidance into the local, state, and federal process, and the role Tesla is hiring will be as the lead for those conversations.

It will be exciting to see how Elon lays out these cards on April 30.

 

[FredTMC]

Tesla has a slew of jobs posted for Stationary Storage. These job descriptions have shed some light on Tesla's thinking, e.g.:

Tesla is planning on addressing all scales of storage, as this job description states:

Some of these installations are much bigger projects than batteries in someone's closet:

Tesla recognizes that there will be regulatory hurdles and that rules will need to change for this business to thrive everywhere (if I were me 20 years ago, this is the job I'd be applying for

It will be exciting to see how Elon lays out these cards on April 30.

Great post. Thx Robert. Yep. Will be great if they discuss all 3 segments. Residential, industrial and utility.

 

[jhm]

Thanks, Robert. It's a revelation to me that Tesla plans to do its own sales and distribution in this market. This is much bigger than just having SolarCity run with it. This could be something special.

 

[roblab]

I'm absolutley sure its a "synchronis" inverter, meaning if the grid power is not present, the pack shuts down
to do anything else requires a much more involved/costly installation with a "transfer switch", to isolate the house from the grid, which is possible, but more than likely involves extra cost on the installation.

I think that's what my grid connected solar does: disconnects automatically, synchronously. Sure, it costs more, but you don't have to think about it. Disconnect from grid, hook up to batteries, invert DC to AC, in a few hundredths of a second. The lights don't even blink perceptibly. When power comes back on, the reverse happens and it tests the grid power, disconnects from batteries, and hooks up. Again in a few hundredths of a second.

I would imagine Tesla has figured that out.

What I'm looking for is DC to DC charging of my Model S along with the package. So far, my system only puts out AC. Plug directly into the battery pack, do the electronic checking and power regulation, and send it down the wire.

 

[MikeC]

Yeah, I'm liking the "Stationary Storage will be a multi-billion dollar per year business unit in the near term" part. That's gotta be worth at least $5-10 billion market cap, right? Keep in mind that the share price is now lower than a year ago when Jonas issued the battery storage $320 upgrade.

I think the market is expecting a home battery presentation with some optimistic promises of vast future potential. If they can show that they already have major commercial or utility customers and are profitably making money right now or in the immediate future, we'll be in for a nice ride.

 

[dhanson865]

Ok, Bearish question incoming: Why are LiIon batteries good for home storage? I thought LiIon's benefits were high physical density, which is ideal for a car. But for home storage where size and weight matter little, there are other technologies more optimal?

because you can take a 85 kWh pack from an old model S with some degradation and turn it into a bunch of 10kWh home storage devices where the degradation doesn't affect range. This gives you a cheap supply of batteries from pack swaps/warranty rebuilds/upgrades in addition to the supply from the gigafactory (in fact the packs will likely be shipped to the gigafactory for refurbishment / repackaging).

Keeps you from having to find somewhere to send all your refurb product to on the open market. No need to take complete write off on warranty returns.

 

[jhm]

I think Tesla has much more to offer here than just to bring $200/kWh batteries to market. I don't really care about the utility applications because that won't change how we buy power. What I care about are the behind-the-meter applications that will truly change our relationships with utilities. The HomeGrid device can be orchestrate demand through the home and beyond.

Consider two different residential rate plans.

A. Flat rate, $0.14/kWh
B. Demand TOU, $0.06/kWh off-peak, $0.20/kWh on-peak, $8/kW max demand

Now suppose a family uses 1000 kWh per month and occasionally uses as much as 15 kW when running AC while drying clothes. Without any change in behavior and without a battery, they would pay $140 under plan A and about $0.06×700 + $0.2×300+ $8×15 =$222 under plan B.

Now suppose this family gets a storage device with say 10 kW power and 20kWh storage. Moreover this device is able to monitor power usage and is able to cut back on AC when other devices like the clothes drier are drawing too much power. And suppose also that off-peak rates are available for at least 18 hour per day. Now the battery can charge on off-peak hours for $60 per month at a rate under 2 kW. Furthermore, the coordination of demand can keep the peak demand under 12 kW at such a time the battery supplies 10 kW while 2 kW is drawn from the utility. Thus the peak demand to utility is just 2 kW which costs $16. Thus, storage plus demand management brings the power bill down to $76 under plan B. This is a savings of $64 per month just by peak shaving without solar. Suppose this intelligent storage device can be leased for $24 per month. This family saves about $480 per year and has the peace of mind of backup power.

What does this do to the utility when large numbers of ratepayers save substantial money on plan B? It kills peak power demand and flattens out demand through the day. Power and distribution capacity move toward sizing for average hourly demand rather that for peak demand. This minimizes the capacity cost for the utility. Basically huge capital investments lose value as the whole grid becomes more efficient and intermittent renewable energy capacity is more easily integrated.

Seen from another lens, the family with a HomeGrid device is more easily integrated into a microgrid. Huge capital outlays for huge capacity are no longer required to achieve parity with full scale grids.

Whether through minimizing the utility grids or advancing microgrids, The HomeGrid device reduces the capital required to provide power. So this brings down the cost for all power consumers. But note that ratepayers become much more active in managing their power needs. Connecting all their high power devices at home to a central intelligent device give them much more ability to manage their power consumption. Things like running the dishwasher or defrosting the refigerator can be shifted to opportune times with out the resident needing to manage this. The HomeGrid orchestrates the whole thing, even charging your car so it's ready when you need it. The utilities have a vested interest in keeping ratepayers passive. It justifies building out ever more capacity and recovering the cost plus profit from ratepayers. But when ratepayers become more intelligent about managing power needs, they utilities will find it unjustifiable to keep building out capacity, and they will shrink.

Moreover, if utilities behave badly, connected ratepayers with excellent demand control will find it possible to punish utilities. As a collective form of protest for imposing say a punitive fee on customers with rooftop solar, connected demand and storage could choose to draw power, halt feed in of solar power and charge batteries during times when the wholesale price is temporarily at a premium to retail rates. Call this a solar stike. As a form of protest, it would force utilities to suffer losses. The utility would soon realize that is is not in their economic interest to impose punitive fees. Such a rebellion could fundamentally change the relationship between utilities and their customers. Now longer would it suffice to get government authorities to rubber stamp utility policies, they will also be subject to coordinated demand response. Again it is in the interest of utilities for ratepayers to be passive. Intelligent and connected demand should be a frightening prospect. While I would prefer for monopolies to be abandoned, within the current political structure collective action may be the next best alternative.

 

[MikeC]

This was posted on TMC a while back, but I gave it another listen: Tesla : Greentech Media

A couple quotes from Mateo Jaramillo:

40:20: "Wherever it can be best, most economically used to make sure the grid is as efficient as possible, that’s where we’re going to get it deployed”

44:35: "Will used EV battery in 7-8 years be cheaper, more cost effective to integrate into whatever application you’re trying to get it into than a brand new battery in that year? Right now, the answer looks like no...It's non-trivial to take a battery that’s been in use for 8+ years or so and rip it out mechanically, electrically, communications standpoint and reconfigure it so it’s viable again.”

There was also a comment from someone else that commercial users have to pay demand charges so storage is most efficiently implemented there first.

 

[mitch672]

There was also a comment from someone else that commercial users have to pay demand charges so storage is most efficiently implemented there first.

you know who else pays demand charges? Tesla. One of the motivations is to lower the costs of the larger commercial storage systems, as they would benefit the company at busy SuperCharger locations, to keep the monthly peak demand down (commercial power customers are billed for peak demand which is the largest power usage in any 15 minute period for the entire month)

So, yeah, they are a customer for their own product as well..

 

[jhm]

you know who else pays demand charges? Tesla. One of the motivations is to lower the costs of the larger commercial storage systems, as they would benefit the company at busy SuperCharger locations, to keep the monthly peak demand down (commercial power customers are billed for peak demand which is the largest power usage in any 15 minute period for the entire month)

So, yeah, they are a customer for their own product as well..

Building on this observation about Supercharging, the Destination Charging is due for a power management solution.

Consider that the Dual Charger option has been dropped with little explaination, meanwhile the DC network has been exploding with HPWC hardware. This does not add up. Why would a Model S owner not what to charget at 20 kW at a Destination HPWC? The answer could be that Dual Chargers and HPWCs are soon to be obsolete.

Imagine the situation for a Hotel that wants to offer Destination Charging in 10 stalls with max charging rates of 20 kW each. This exposes the hotel to an additional 200 kW of peak demand charges each month, and existing connections to the utility may not have this surplus capacity. Suddenly your Destination Charging amenity gets really expensive, and the problem mounts as even more Teslas visit your hotel. Some day you may need to wire up 100 stalls. So surely Tesla knows how this can be a real point of resistance for potential DC hosts.

So one potential solution is to lease a 200 kW / 400 kWh DemandLogic battery to the hotel. Route DC charging to 10 to 20 stalls. The DL device not only supports DC charging but provide peak shaving for the whole hotel. The hotel stands to reduce the combined cost of its power bill and DL lease even after providing "free charging" to its patrons. Tesla stands to benefit from what is earned on the lease plus the benefit of providing charging to its EV customers. The economics of peak shaving could propel the expansion of the DC network.

 

[austinEV]

you know who else pays demand charges? Tesla. One of the motivations is to lower the costs of the larger commercial storage systems, as they would benefit the company at busy SuperCharger locations, to keep the monthly peak demand down (commercial power customers are billed for peak demand which is the largest power usage in any 15 minute period for the entire month)

So, yeah, they are a customer for their own product as well..

I always think of this when people bring up the idea of using used batteries for new products. Tesla itself can soak up repurposed battery backs for years if not decades. They can use them in superchargers, true, but the first and best use would probably be at their factories. They have 3 factories and facilities, plus the new gigafactory. It makes way more sense for them to keep the repurposed batteries in house where they can study their effectiveness and take on the risk of what happens when cell failure occurs. So if I were taking in new packs I would use them in this order:
1) peak demand shaving at all TSLA facilities
2) storage for the Gigafactory operations, from the solar and wind at that facility.
3) more demand shaving at the rest of the facilities, attacking the next tier of costing if applicable. Easier to deploy all at once, centrally.
4) peak shaving at superchargers to offset high useage costs.
5) storage at solar enabled SC sites
6) bulk storage at SC sites to enable many parallel charges without throttling (assuming that is going on)
7) Utility scale storage market, smoothing capacity from wind.
8) Utility scale storage market, smoothing capacity from solar.
9) home storage market

Again, this is what I would do with USED cells. I am thrilled they are going to make a product this year, but it will probably be with new cells.

 

[Robert.Boston]

Great posts on this subject, James. Just one quibble:

Consider that the Dual Charger option has been dropped with little explaination, meanwhile the DC network has been exploding with HPWC hardware.

Dual chargers are still available, but they are now a Service Center-installed item, not factory installed. It's $2000 now, which is either up from $1500 (factory) or down from $3600 (service center) previously.

- - - Updated - - -

44:35: "Will used EV battery in 7-8 years be cheaper, more cost effective to integrate into whatever application you’re trying to get it into than a brand new battery in that year? Right now, the answer looks like no...It's non-trivial to take a battery that’s been in use for 8+ years or so and rip it out mechanically, electrically, communications standpoint and reconfigure it so it’s viable again.”

Hmm, this is interesting. It changes my thinking about the business economics. Perhaps storage will be a place for factory seconds, i.e. cells that don't quite make the grade for use in autos. But I hope that process QC sharply limits the number of these seconds, so there wouldn't be enough supply of them to support a multi-billion dollar business.

 

[stevejust]

I don't really need a battery, I would be fine just storing compressed coolant. Why not add big coolant tanks to that refrigeration cycle, which for my purposes is like stored energy? During the day when Solar power is available, the compressor ejects heat from the coolant and fills the tank. In the evening, and during the night, the liquid coolant is pumped into the evaporator as needed for cooling? A few tanks has to be cheaper than a 10kWh battery pack and will do the same job of energy offsetting.

What's funny is the North Texas Renewable Energy Group has discussed this line of thinking often. From what I understand, there are a lot of ice-cooled chiller climate systems in the Austin area. There's one in the basement where NTREG meets.

You are absolutely correct that there are other ways of storing solar energy aside from as electricity in batteries.

 

[Auzie]

44:35: "Will used EV battery in 7-8 years be cheaper, more cost effective to integrate into whatever application you’re trying to get it into than a brand new battery in that year? Right now, the answer looks like no...It's non-trivial to take a battery that’s been in use for 8+ years or so and rip it out mechanically, electrically, communications standpoint and reconfigure it so it’s viable again.”

Hmm, this is interesting. It changes my thinking about the business economics. Perhaps storage will be a place for factory seconds, i.e. cells that don't quite make the grade for use in autos. But I hope that process QC sharply limits the number of these seconds, so there wouldn't be enough supply of them to support a multi-billion dollar business.

Very interesting question. Looking at many other technologies, it is safe to assume that some form of recycling will be economical. Recycled product is usually not economically competitive with the new product equivalent, but the spread of recycling industry to increasing number of technologies suggests that it will likely be possible to extract some value with recycling batteries. Battery recycling business may not be mainstream, as recycling businesses usually feed into some other business.

 

[austinEV]

Very interesting question. Looking at many other technologies, it is safe to assume that some form of recycling will be economical. Recycled product is usually not economically competitive with the new product equivalent, but the spread of recycling industry to increasing number of technologies suggests that it will likely be possible to extract some value with recycling batteries. Battery recycling business may not be mainstream, as recycling businesses usually feed into some other business.

Why recycle the pack? Why tear down the pack and do all that? If a pack was 80% or 75% or heck 20% of its original capacity, I would just slide it in whole to a specialized rack in the factory. hook up power and coolant and put it to work peak shaving in the factory.

 

[Auzie]

Why recycle the pack? Why tear down the pack and do all that? If a pack was 80% or 75% or heck 20% of its original capacity, I would just slide it in whole to a specialized rack in the factory. hook up power and coolant and put it to work peak shaving in the factory.

Agree with you. Recycling does not need to involve destruction. Sometimes recycled product is destroyed and separated components are fed back at a small percentage into new product build. The way recycling is done is driven by economics. For old batteries it might be easy to find some secondary usage or markets.

 

[jhm]

In ten years, battery technology may double density. So recycling a ten year old battery may result in more kWh of battery with better performance than simply continuing to use the old battery. Obsolescence may well be the limiting factor for batteries with long life.

 

[Johan]

In ten years, battery technology may double density. So recycling a ten year old battery may result in more kWh of battery with better performance than simply continuing to use the old battery. Obsolescence may well be the limiting factor for batteries with long life.

It wouldn't even be crazy of me to think that in just 2-3 "generations" if batteries (16-24 years) we may well have transitioned to some other and likely much better electricity storage device? Isn't even this the most likely scenario? With the second most likely being more or less ubiquitous and for many purposes "free" power (fusion?, super-cheap solar?)?

 

[uselesslogin]

I guess Tesla is thinking about a V2G application:

Link of Video +slides.
Tesla CTO JB Straubel talks about the future of electric cars at 2015 Vail Global Energy Forum | Electrek

EDIT: Actually that sounds more like the utility controls the charging rate so it will soak up excess power and then back off on the charging rate when more power is needed by others. Right now I know there are thermostats the utility company will give you that do this.

 

[JRP3]

EDIT: Actually that sounds more like the utility controls the charging rate so it will soak up excess power and then back off on the charging rate when more power is needed by others. Right now I know there are thermostats the utility company will give you that do this.

That seems more likely.