By registering, Powerwall owners receive $2 for every additional kilowatt-hour in designated “events” when the grid is under severe stress. This includes any time California grid operator CAISO issues an energy alert, warning or emergency.
Last July, Tesla began a similar testing program with PG&E and a few other utilities, but it was a voluntary program that wasn’t paid for. Now, with monetary incentives to attract participants, the project can grow large enough to be a significant backup energy source for California — and clean energy.
The participants will “help form the world’s largest distributed battery — possibly more than 50,000 Powerwalls,” Tesla said. Such distributed batteries — in other words, “virtual power plants” — could replace the ones that usually come online when demand for electricity starts to outstrip supply.gasPower plants, which provide additional energy.
Tesla already has experience with this elsewhere. For the past few years, the company has been building a “virtual power plant” in Australia. It hopes to expand more operations in the United States. Tesla is pushing the grid operator in Texas to change the rules to allow its customers to make money by participating in “virtual power plant” projects. The company launched a demonstration project earlier this year, asking Powerwall owners to volunteer to show grid operators how such a project could work. Currently, without any rule changes, Tesla is offering volunteers a $40 Tesla gift card “as a thank you.”
In California, PG&E customers with Powerwalls can sign up to join a “virtual power plant” through the Tesla app. Once they join the program, known as the Emergency Load Reduction Program, they will start receiving push notifications in advance when the grid needs urgent support. To keep some backup power for themselves, they will be able to designate a “backup reserve level”. Tesla will not discharge the battery below that level.
After accumulating $2 for each additional kilowatt-hour delivered to the grid, participants will receive payment from Tesla “on an annual basis or on a more frequent basis as determined by Tesla.” For this season, participants can expect to receive payments by the end of March 2023, according to Tesla.
California’s grid has been particularly stressed this summer. During hot months, energy demand usually rises while people blowair conditioner. To make matters worse, extreme drought is forecast to cut the state’s hydropower supply in half this season. Hot, dry weather also raises the risk of wildfires, so PG&E has gotten into the habit of implementing preventative power outages in an effort to prevent live power lines from starting fires.