Tesla Is Now Paying Users for Electricity.
Tesla earlier this month just announced that it will be moving forward with the VPP ( Virtual Power Plant ) Program in California that Tesla rooftop and Powerwall owners will be able to sign up for starting July 22nd. This will allow users to be connected to the grid and be able to sell and store electricity at the cheapest price ever. Basically, homes with a solar panel and a battery pack will become — Power Plants.
What is this Virtual Power Plant?
Just like the sports games on your phone or computer the Virtual Power Plant is a simulation of a real one. But here we actually generate electricity and not make dunks that don’t matter ever.
Let’s picture this, it’s a hot summer day and you have turned on your AC (Air conditioning) well chances are it’s not just you but your whole city has their ACs on at the same time. Turning on so many ACs at once brings in a problem of supply and demand. Our power plants can produce only up to a certain amount.
The Solution?
Load-Shedding or Peaker Power Plant.
Although a cheaper solution, the former one means that a part of the grid remains shut down during peak time. (No AC during the hottest time of the day). This obviously affects the users of the grid.
Peaker Power Plants are generally high power plants that run only to fulfil the peak time demand. These are very carbon-intensive (read: highly polluting) and take a long time to startup. Generally an hour or two. Sometimes more than 12 hours!
So Instead of doing any of the two, power companies just buy the excess power from other utility companies. But due to high demand, the price for energy goes up by almost 10 times. And although the utility companies are buying it, you are the one paying it (bills).
Why worry about it?
Today an outage in electricity is a serious problem not just for big companies, today the world has become more dependent on the internet, automation based, more dependent on electricity.
Functionality drops with the lack of power, and that affects small businesses and large businesses alike. But more than that variable weather conditions have become the new normal, meaning storms, floods, droughts and high temperatures are more common than before. This problem is going to get worse and this is where the answer lies
The Answer.
Solar Panels. Batteries. Software.
Solar Panels the generator. As their increased popularity and decreased prices make it clear solar panels are one of the best ways to generate electricity. So in a house, a typical solar panel setup of 5Kw generates enough electricity to power all home appliances throughout the day with some extra. With net metering, we can sell this extra electricity off and buy it back at a cheaper price. But for those without such net metering ability generally, store it off in batteries. These act as power backup for obvious reasons.
The Batteries now fully charged have the ability to power up almost anything. But it’s so that your neighbour requires some extra electricity, so you can power through the VPP. How does it work?
The crucial part — The software. In today’s modern network switches are no longer controlled physically and can be automated to switch on and off at times. And the software does exactly so it can analyse, predict and cutoff and protect the house from noisy electricity. So the software analyses our neighbour’s electricity demand (whom we assume to be a member of the VPP) and supplies it from our batteries and we get paid for it. And the reverse happens when we run at a loss for energy and the neighbour supplies it. This would be a huge program with thousands of people, so the number of neighbours would increase and the power supplied would be from each other and not a big sort of power plant.
So How Feasible would this be?
This means each home can deliver about 6.5 KW of electricity for four hours at least.
So now how many houses would we need for this?
Tesla has till now installed 200,000 powerwall installations and plans to do 30–35k this quarter. They have at least 80k orders but are limited by chip shortages.
So What does it mean In the End?
This is what this means. An end to monopolisation of the energy industry. The utilities will gradually lose their power to charge exorbitant prices by adding that to your bills. You will be in charge of your electricity generation and so will your community. This will be more like a community-managed power plant and the benefit would be for every person for being a part of it. This will be more than paying less for your electricity bills, it will be increased reliability, more power and the best price because this is not managed by Tesla it’s managed by you and your software.
