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Tesla's new core business? CES Grid Storage Device For SuperCharger/SuperSwapper

Discussion in 'TSLA Investor Discussions' started by CapitalistOppressor, Jun 1, 2013.

  1. CapitalistOppressor

    CapitalistOppressor Active Member

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    This thread is to specifically discuss the implications of Tesla's new grid storage business, as opposed to debate the particulars of SuperSwapping vs SuperCharging. Elon announced grid storage during the conference call on SuperChargers, so we can be certain that it is a reality.

    He did not discuss the business aspect of it, which is our task here. Everyone needs to be clear, the amount of revenue potential for this business probably dwarfs any potential auto manufacturing business. Building electric cars will allow Tesla to bootstrap a capability that will eventually produce mind boggling revenues as the fleet of Tesla's grows into the millions or tens of millions.

    Here is the patent that describes the management architecture for Tesla's new Grid Storage Business -

    METHOD AND APPARATUS FOR EXTENDING LIFETIME FOR RECHARGEABLE STATIONARY ENERGY STORAGE DEVICES - Patent application

    Here is the section linking this patent to SuperSwappers, but this patent is completely agnostic on architecture -

    Read more: METHOD AND APPARATUS FOR EXTENDING LIFETIME FOR RECHARGEABLE STATIONARY ENERGY STORAGE DEVICES - Patent application

    The words "Metal-Air" are also in the patent. Any mention of that is off topic. This thread is about the business of grid storage. Same goes for SuperSwappers/SuperChargers or any other car related architecture.

    Battery chemistry is relevant in terms of capacity, rechargability and life-cycle.

    Here are background resources for competing uses, whether to support SuperChargers or SuperSwappers. The grid storage business is the same regardless -

    Randy Carlson's post on the economics of how grid storage can make buckets of money for Tesla in the context of SuperChargers -

    SuperCharging Tesla - Seeking Alpha

    I've posted quickie models describing roughly the same thing at threads all over TMC, only in the context of SuperSwappers. I'm not going to link to all of them, but the best stuff is probably in the speculation thread on what the mystery announcement was (posted before we found the reference to swapping in the 8k) with my first post here, and discussion continuing forward until after the 8k was discovered -

    I then went on to describe more in detail how this would work further up the thread.

    This concept then was discussed extensively in Citizen-T's thread, which was started after the reference in the 8k was found, where the architecture of the system was then debated -

    - - - Updated - - -

    Fearless prediction. Tesla will finance these the same way that Solar City does with Solar Power installations. CDO's.
     
  2. adiggs

    adiggs Active Member

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    The immediate thought I had when I first read this idea about grid level storage as a business - clearly the car battery packs, at 85kw each, are getting ganged together in astounding numbers to eventually have enough extra packs to actually do this. I don't know where the cost would need to be to make this work, but it seems to me that the cost for the packs would need to be a lot lower than we've been thinking its actually at right now, to make that feasible.

    The basic business model is conceptually sensible to me - buy electricity when its cheap, sell electricity when its not. Grid providers are happy - with enough grid level storage, they can decrease or even start dismantling the generators that sit about waiting for peaks in demand, and operating the base load generators more consistently. You also have somewhere for the wind and solar power to go when their generation peaks.

    At the level of a single pack, if this electricity arbitrage is worth $0.10 per kwh (say buy at $0.05, sell at $0.15), and if you move 50 kWh/day, then the pack is earning $5/day. That's around $1800/year. If the pack costs $400/kWh to manufacture (I've seen that number somewhere before), then you're into the $32k range. You need closer to 20 years to break even and that doesn't seem all that good. But if the packs cost more like $100/kWh to manufacture, then you're down to about 5 years to pay for the pack - that sounds really desirable.


    I really don't know what to make of this, but if Tesla has figured out how to do production levels of grid level storage and make it pay, they can build the grid storage company themselves, or they can sell the packs to others to implement grid storage; either way, they're going to need a bigger battery pack manufacturing plant :)
     
  3. Cattledog

    Cattledog Active Member

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    Perhaps we've already seen the battery swap business model foreshadowed in the loaner car program - if you like the loaner car better, keep it and pay the difference with an equation based on age and mileage. Why couldn't the same be accomplished with the battery? When you come to swap, they'll assess age and charge cycles and then give you a price for the swap. OK, seems a little messy, but it gets around the variability of battery pack quality when swapping.

    - - - Updated - - -

    Perhaps his is part of a strategy to reduce pack costs through dramatic increase in production numbers - if the pack storage can at least break even in the short term while being a grid storage device, and their costs start to reduce by volume production, the gross margins on the car increase (it's the most expensive component of the car) and Gen3 starts to look more feasible without a battery breakthrough, simply with continued improvements.
     
  4. deonb

    deonb Active Member

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    Woo-hoo! Just in time.

    I translated some parts of the SuperCharger announcement, that afterwards decided that it wasn't pertinent enough to my June 20th list. But they certainly belong here.

    Elon, Supercharger Announcement, May 29 on Partnering:
    Conceivably if we were to do a partnership with a major manufacturer that were interested in the SuperCharging system and are willing to use the same basic architecture, then it could be used by more than just Tesla. We're not closed to that idea. We're not trying to create some closed system as some sort of strategy or something like that. It's just that we need to solve the problem of long distance travel and we can't wait for others to agree with our strategy. If we wait for some sort of concensus, it's going to take too long. So we just need to keep going and then other manufacturers can either copy us or join us.
    http://ir.teslamotors.com/releasedet...leaseID=767983
    https://www.dropbox.com/sh/yozowduql4vggzq/rDQXdo7Hqm 38:30

    Elon, Supercharger Announcement, May 29 on Solar Panels:
    Q: Can you explain how the Solar works for the stations that do have solar?
    The general principle is that we want to generate more energy from the sun over the cause of the year than is used by Model S's that
    recharge at the station. The recharing tends to be concentrated during pretty obvious times, like on a Friday afternoon and evening and on
    a Sunday afternoon and evening, cause people are going somewhere for the weekend or on holidays days - that kind of thing. Whereas it sees
    relatively low usage during the week. The solar panels are generating energy throughout the course of the week, and it cummulatively adds
    up to more than the energy that the car consumes.

    And I was thinking of saving this bit of information for a future announcement, but you do make a good point, we've kind'a had too much
    news. So I'll just pack it in here, which is that we actually have grid storage going on at sort'a our SuperCharging stations. So we got
    stationary battery packs that take in energy through the week from the Solar Panels and - the Solar Panels actually charge the battery
    pack and then that stationary battery pack charges Model S's, and so it's actually capable of going completely off grid. And this is
    something we expect to probably roll out to all the SuperCharging stations, and I think it's something that's sort'a fairly cool. These
    stations will then operate even if the entire national grid goes down.
    http://ir.teslamotors.com/releasedet...leaseID=767983
    https://www.dropbox.com/sh/yozowduql4vggzq/rDQXdo7Hqm 21:09

    Q: So how many of the Grid Storage units do you have out there, and how big are they?
    We've got 2 in operation right now. They are pretty sizable. Half a Megawatt Hour, and they're capable of putting out a Megawatt if need be.
    Q: Where are they located?
    Actually, I'd rather not say where they are located, because I'd rather not have people go and fudging around with them. I'll tell you they're in California - there's probably only a limited number of stations. And we're actually doing this in partnership with the utlities, btw, so. The grid storage is considered a helpful thing to the utilities cause it allows them to use that pack as a grid buffer. The utilities always have a challenge of dealing with too much or too little power generation at a time, so we're able to provide that buffering capability which they like.
    http://ir.teslamotors.com/releasedet...leaseID=767983
    https://www.dropbox.com/sh/yozowduql4vggzq/rDQXdo7Hqm 40:45
     
  5. CapitalistOppressor

    CapitalistOppressor Active Member

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    The packs are very much cheaper than people think. Look at the battery Ip thread I just posted to get a partial sense of why. As to actual prices I'll be posting my estimates next week.

    The $400/kWh price comes from the $10k difference in the price of the 85kWh and 60kWh packs, which works out to $400/kWh ($10k/25kWh). That is so much cheaper than anyone else in the industry can build these packs that everyone takes it at face value. It's off by a lot.

    - - - Updated - - -

    They do belong in the June 20th thread. The June 20th announcement is about SuperSwapping, which is how grid storage is going to be practically implemented at the moment. (See, I broke my own rule. Do as I say, not as I do :smile:)

    - - - Updated - - -

    Just to clarify the $10k price difference is the difference in the price of the cars not the price of the packs. ~$70k for the 60kWh car and ~$80k for the 85kWh car. For the $10k you get free supercharger + additional performance and range. So it was always just a loose way to calculate the underlying pack costs.
     
  6. emupilot

    emupilot Member

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    Grid storage is actually an excellent use for battery packs at the end of their automotive life. A 25% reduction in capacity will probably be enough to get a Model S owner to buy a new pack. Tesla gets to use the 75% remaining capacity of the old pack for grid storage. This residual value of old packs might also explain why Tesla has offered replacement battery packs for $12,000.
     
  7. Thumper

    Thumper Member

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    This all requires a daunting bit of hardware. Remember that that Megawatt of storage needs thermal management. Maybe they bury the batteries.
     
  8. deonb

    deonb Active Member

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    Ok, you convinced me. I changed the "Prevailing Theory" to be SuperSwapper + Grid, and added the grid elements:
    http://www.teslamotorsclub.com/showthread.php/17460-List-of-all-June-20th-announcement-hints
     
  9. callmesam

    callmesam Member

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    C.O.

    I think that Randy's article was a good jumping off place.

    Superchargers are free to Tesla and to drivers for several important reasons:
    1. Solar power fed into the grid for $0.30/kWh
    2. Battery grid buffer. Tesla is selling their ability to back the grid during peak use so that the grid doesn't have to buy "peaker" power $0.15/kWh available
    3. Time of Use. Tesla can "sell" power all day via solar and battery, and can charge back in the evening and "buy" for $0.05/kWh

    Will all of the above generating revenue for Solar City, the Superchargers are going to be break-even OR make money for Tesla.

    The value of the battery grid buffer will likely increase since peaker power is so expensive.
     
  10. deonb

    deonb Active Member

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    Tesla just updated teslamotors.com to now have the SuperCharger first and formestly featured. (I think this happened within the last 2 hours). Model S is now in the background.

    I think you're right on the new core business.

    Wow. My GM-like investment just became an XOM-like investment.
     
  11. jeff_adams

    jeff_adams Member

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    Does anyone else find it coincidental that Elon said there are two grid sites and Tesla happens to have two obelisks? Those black bases look awful big to me. Are they the right shape and size to contain battery packs?
     

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  12. dsm363

    dsm363 Roadster + Sig Model S

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    I was thinking the same thing. Looks like it is big enough for 4 packs (2x2 base) but stacked up a few layers. Maybe 32 or so 85 kWh packs?
     
  13. RDoc

    RDoc S85D

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    They're going to have to have some pretty serious cooling equipment as well I'd think.
     
  14. mitch672

    mitch672 Active Member

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    Why? The packs are liquid cooled, so all they need is to build a larger version of the chilling system in the Model S, and that's only when being charged or discharged at a high rate of current. If you read Randy Carlson "SuperCharging Tesla" article, he actually has pictures of the name plate data on the Inverters, I think he even mentions which site in CA it's at.. He has a nice diagram of it he drew as well.

    The rate arbritrage and grid stabilization are only part of the strategy, also remember one function is to keep the demand charges down from the grid during multiple SuperCharger sessions. Teslas "end game" is, as Randy points out, in getting a one-time licensing fee from other manufacturers for lifetime SuperCharger access to EVs they make. Tesla will generate large amounts of revenue from this, but that's much further down the road, maybe 7-10 years. Elon is smart, this allows to you multiply your income without building a lot more cars. License your drivetrain, pack technology and SuperCharger access to major manufactures who can crank out millions of EVs per year.. This is Elons secret plan to monetize the replacement of the ICE, without requiring tremendous expansion of manufacturing facilities - prove it can be done, and collect licensing fees while others build the cars.
     
  15. jeff_adams

    jeff_adams Member

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    I would think that Tesla would be providing batteries to Solar City and they would be the ones "running the grid" with panels, maintenance, selling and buying of power, ect. This would be a great package to sell to hospitals, police departments, hotels, ect. Anyone who wants constant power without worrying about a power outage and doesn't want the expensive of dealing with auxiliary diesel generators.
     
  16. brianstorms

    brianstorms Member

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    It's too bad that the Energy Storage Association's annual conference just happened -- last week! In Tesla's back yard (Santa Clara, CA). Despite the fact that they were not speakers on the program, I'm sure there were folks from Tesla all over this event.

    Conferences such as these are fantastic places to learn what's going on before it gets announced.

    This would have been a great place to run the ideas presented in this thread by random attendees, who happen to be the very professionals working to create the kind of smart grid that the Tesla system would thrive in, and get their opinions.

    I wonder if they have a message board or mailing list . . .
     
  17. FredTMC

    FredTMC Model S VIN #4925

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    Wheres the other obelisk? This one's at Hawthorne.

    Thx in advance
     
  18. Causalien

    Causalien Reaper of Trolls

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    So, I saw a pictire of a super,charger station. It has a pool. I was wondering why you need a pool? Can that be used to cool the batteries? like evaporative cooling. Now that the batteries are not stuck on a car. A sorts of liquid cooling are possible. Maybe even opening the pool as a heated pool for families when they take a break.
     
  19. jeff_adams

    jeff_adams Member

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    I think it's at the Freemont factory. That would make the most sense. If a power outage were to occur, they would want to keep Space X and NUMMI up and running. Do they have solar panels in Freemont? I know they have not put them on the roof
     
  20. 30seconds

    30seconds Active Member

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    Wasnt there a pic on the solarcity site showing a tesla battery box attached?
     

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