How could you resist the offer to become a part of the largest distributed battery in the world and help keep California’s energy clean and reliable? That persuasive language is part of an invitation that Tesla has offered recently with the launch of its new virtual power plant in partnership with Pacific Gas and Electric Company (PG&E).
The virtual power plant will allow Powerwall owners to opt into the program to help stabilize the electric grid and end blackouts in California. The offer to participate in the Emergency Load Reduction Program (ELRP) pilot offered by PG&E would, according to Tesla, let participants support the grid while also earning compensation and maintaining their energy security.
Powerwall owners who decide to join the program will earn $2 per kilowatt-hour sent back to the grid.
Tesla said that it has about 50,000 Powerwalls that could be eligible for this virtual power plant (VPP) program, which add up to a significant amount of energy capacity that can be distributed when needed on the PG&E grid.
Previous Virtual Power Plant Iterations
In 2020, Steve Hanley of CleanTechnica offered an overview of the Tesla virtual power plant program in the UK. In overview, the homeowner had to meet a certain number of existing criteria, including owning a Tesla electric car and home charger. Then a rooftop solar system and a Tesla Powerwall needed to be added to the home. The program homes generated, stored, and returned solar energy to the grid during peak times. Imports and exports of electricity were determined by software and happened automatically based on energy use patterns, solar generation forecasts, and wholesale energy prices.
Last year, Tesla launched a test virtual power plant in California, where Powerwall owners joined in voluntarily without compensation. The goal then was to let the virtual power plant pull power from the Powerwall owners’ battery packs when the grid needed it.
In 2022, David Waterworth related a study into the use of virtual power plants in Australia that indicated the market is not quite ready for them. The returns to the participants appeared to be less than what they would achieve by storing their excess solar generation in their home batteries and using it themselves overnight.
Information about the PG&E Program
Stabilize California’s Grid: The extra capacity a participant’s Powerwall provides could help avoid or reduce blackouts in a severe emergency. This way, Powerwall could keep the lights on for both the participant and their community.
Clean the Grid: Tesla will dispatch a participant’s Powerwall when the grid is in critical need of additional power. That is when the least efficient generators would typically come online.
Maintain Energy Security: The Powerwall will discharge during VPP events but won’t discharge below the Backup Reserve.
Events: Tesla and PG&E will call upon the virtual power plant when the California grid operator, CAISO, declares an alert, warning, or emergency in response to challenging grid conditions. Tesla and PG&E may also call events at other times to meet the program minimum of 20 hours of events. These additional events may include responses to CAISO Flex Alerts.
Before the Event: When an event is scheduled, the participant will receive a push notification informing them of event times. The participant can expect their Powerwall system to prioritize charging and prepare for an event after the event is scheduled. An event may be scheduled a day ahead, but circumstances may require much less notice.
During the Event: When the event begins, the participant will receive a push notification reminding them of the event end time, and the Powerwall will begin discharging to support the grid. The Powerwall will discharge until the event ends, or when it discharges to the selected Backup Reserve level. Powerwall will export a safe amount of power, which may be similar to onsite solar export. This may not be the full power capacity of the Powerwall.
After the Event: At completion of the event, the Powerwall will resume normal operation.
Controlling Participation: Powerwall gives the participant 3 options for controlling participation in VPP events: setting the Backup Reserve, opting out of a single event, and resuming normal operation.
Suspend Participation: Participants can toggle in the Settings menu of the Tesla app to turn off participation. If this suspension occurs, the Powerwall system will not react to events when they are scheduled, nor will the participant be notified of events. The participant is still enrolled in the program, however, and can resume participation at any time by toggling participation back on.
Compensation: Compensation depends on the participating energy capacity of the owner’s system, the number of Powerwalls, and their Backup Reserve. Owners who lower their Backup Reserve earn more.
Payment: At the end of the season, which is typically towards the end of the year, PG&E will calculate the owner’s contribution and incentive payment from their Powerwall data. The payment is issued by Tesla and is expected to arrive before the end of March, 2023.
What information is needed to successfully enroll? Account number, meter number, PG&E service information, and meter number location are required to enroll.
Will participation in this program impact an owner’s electric bill? Tesla expects most events this summer to occur during typical peak hours for many Time-of-Use rate plans. Participating in the event will shift energy exports to periods that are later in the day compared to typical exports.
ELRP Term: The ELRP begins upon the participant’s acceptance of terms and shall continue until at least December 31, 2023, unless expressly extended by PG&E or terminated sooner.
ELRP Customer Events: Events will be triggered the previous day or the current day, based on Flex Alerts or CAISO Energy Emergency Alerts between May 1 and October 31. The Event hours can be between 4 pm and 9 pm.
Participant Device Data and Other Information: Participation in the ELRP does involve PG&E and Tesla having access to certain participant personal identifiable information and energy use data. This data set can include their name, address, energy usage, utility account number, device information, data generated from the ELRP, and other personal information, collectively referred to as Confidential Information.
Termination: PG&E has the sole discretion to terminate a participant’s enrollment in the ELRP at any time without cause by providing the participant written notice.
General: The entire agreement exists among PG&E, Tesla, and the participant concerning the ELRP eligibility and participation requirements.
Tesla Arbitration Requirement: A single arbitrator in a private arbitration will settle any dispute arising out of the beta program.
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