FutureStructure

Tesla Sets Sights on Battery-Based Energy Storage Business

The company already has begun pilot projects that leverage technology it has developed for electric car batteries for stationary energy storage.

by Jerry Hirsch, Los Angeles Times / April 24, 2015
(TNS) -- Tesla Motors is expected to announce next week that it will expand into a new business offering battery-based energy storage for residential and commercial customers.

Documents filed with the California Public Utilities Commission show that Tesla already has begun pilot projects that leverage technology it has developed for electric car batteries for stationary energy storage.

The Palo Alto automaker collected $65 million in state incentives for its projects last year under the advanced storage technology portion of the PUC’s Self-Generation Incentive Program, according to Terrie Prosper, a spokeswoman for the agency.

The electric car company has started to brief environmental groups and analysts on its plans.

Storing electricity efficiently, inexpensively and safely is a problem that has vexed the power industry since electricity was first harnessed. But such storage has huge implications for bolstering the national electricity grid and reducing pollution from power generation.

Homeowners and businesses, for example, could charge batteries at night, when there is surplus generation and rates are cheap, and then use the power during the day, when there is a heavy load on the grid and rates are highest.

“You can look at the battery as an asset on the grid and then you can start to figure out the financial opportunities,” said Rajit Gadh, director of the Smart Grid Energy Research Center at the University of Southern California, Los Angeles.

“Tesla is looking to get into energy storage whether it is on four wheels or stationary,” said Max Baumhefner, an attorney with the Natural Resources Defense Council who was briefed by the automaker.

Tesla’s strategy is designed to leverage a planned $5 billion investment by the car company, battery cell manufacturer Panasonic and other partners in a huge lithium-ion battery “Gigafactory” under construction near Reno, Nev.

Musk has said the factory will reduce the cost of producing batteries by about 30 percent and is critical to the automaker’s plans to introduce a small electric family sedan that will sell in the $30,000 range after government rebates and incentives. Tesla is looking for other profitable ways to tap production from the plant.

“The Gigafactory is a big play for the whole energy world,” Baumhefner said.

A steady increase in solar- and wind-generated power is increasing the need to develop efficient electricity storage systems, he said. That’s because generation from such sources can be almost limitless and needs to go somewhere.

Using dedicated battery systems as well as storage derived from electric vehicle batteries that are no longer strong enough for automotive use but still have life “makes a lot a sense,” he said. Already there are enough batteries operating in the nation’s small electric car fleet to power all the homes in a city the size of Washington for a day, Baumhefner said.

Other automakers, including BMW, have launched electric vehicle battery storage pilot programs in California. One BMW program pays electric car drivers to time their charges to periods that even out the load on the grid. It also has a bank of spent EV batteries in Mountain View that it charges with solar power and uses to feed power into the grid at peak times.

©2015 Los Angeles Times. Distributed by Tribune Content Agency, LLC.