Does Tesla have the answer to rising energy costs for the food industry?

22 May 2015

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It seems so. Tesla’s Powerwall, recently launched by Elon Musk (Tesla CEO and product architect), holds the potential to disrupt the energy industry and “change the entire energy infrastructure of the world to zero carbon”, as declared by Musk.

Tesla’s Powerwall

What is the Powerwall? The Powerwall is Tesla’s new battery product capable of storing power for home and industrial applications. While power storing batteries are not new,what is new is the quality of battery technology Tesla have developed coupled with the low cost.  There will be 2 home models initially offered to market; a 7kWh and 10kWh model that will be priced at $3,000 and $3,500 respectively (US pricing). It has also been announced that a 100kWh industrial model is currently in development.

How does it work? The Powerwall concept is simple. Generate power when conditions allow (ie solar power generated during daylight hours or off-peak charging from the grid) and then store and use that power when it is needed most. The batteries can store power for use during night operations or even during times of power outages but the real benefit is to use this stored power during peak times when power demands and costs are at their highest. This allows for the reduction of peak demand price surcharges which has the potential to drastically reduce electricity bills. This is effective when the existing utility supply does not allow for excess power to be fed back into the grid or pays unattractive rates for power that is fed back (that users eventually buy back at a higher tariff).

Powerwall batteries are based on Lithium-ion technology which is far superior to the traditional lead acid type. The Powerwall technology is largely self-contained with features such as power management and cooling built in.  The components used are reported as being of high quality and the system is being promoted as “infinitely scalable”;the idea being that multiple Powerwall units can be joined together to create a power storing capacity solution to suit specific needs and upgraded or relocated as needs change.

What are the benefits? Combined with renewable energy sources Powerwall can reduce energy costs, is flexible in its configuration and reduce or even eliminate the reliance on tradition power generation methods such as fossil fuels.  Powerwall is relatively inexpensive and low maintenance. According to Tesla, 2 million Powerwall’s could offset the world’s power consumption.

When considering the coupling of the Powerwall with renewable energy the opportunity exists to significantly decrease electrical consumption and cost for manufacturers. This general premise would work on three principles:

  • Using grid electricity during off-peak periods to run operations
  • Using renewable energy to charge the Powerwall in off-peak periods
  • Using the Powerwall during peak periods to run operations

Early calculations undertaken by Wiley suggest that this reduction in peak demand could have the potential to save manufacturers up to 30% on their monthly electricity costs.

Why is this disruptive?  Powerwall has the potential to change the way power is supplied, used, paid for and how excess power is managed.  Utility service providers may need to adjust their business models to align with this technology, or risk becoming redundant for some applications.  Power consumers, both residential and industrial will have new options on how they manage power use.  Power infrastructure will change, power storage will be more decentralised and peak demand on a central power grid will reduce. Powerwall as a technology is likely to have many more impacts than noted here but this will rely heavily on the uptake of the technology.

While Powerwall is not expected to be launched in Australia until late 2015, the potential for this technology in our homes and in our food facilities is difficult to overstate. The Australian food industry stands to be one of the great beneficiaries of technologies like Powerwall.