Tesla Powerpack System To Save United Power Customers $1 Million A Year

Tesla Powerpack

OCT 15 2018 BY MARK KANE 28

The utility installed the Tesla ESS for savings.

United Power is installing a 4 MW Tesla energy storage system in Weld County, Colorado that is expected to bring about $1 million in savings annually.

The installation was needed to handle renewable energy sources (that have variable output). By having a huge battery, utilities are able to produce more energy from renewable and manage the grid more easily.

“The price of electricity fluctuates throughout the day and during peak usage, the price is the highest.

United Power can now use the battery power instead of buying more power and the cost savings is passed on to its members. The batteries can be recharged with renewable energy.”

The system is big enough to power 700 homes for four hours if needed.

United Power said that it decided to purchase Tesla batteries instead of from some other company because Tesla is well known in car and energy storage business and very experienced.

Jerry Marizza the New Business Director for United Power said:

“I feel they’re kind of battle tested. They’ve been operating cars and doing things with batteries for a long time. There’s a bit of a known quantity to the Tesla battery,”

More projects like this are expected in Colorado.

Source: denver.cbslocal.com

Categories: ESS, Tesla

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28 Comments on "Tesla Powerpack System To Save United Power Customers $1 Million A Year"

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John

Love it!! There’s no greater feeling than getting out from under the control of a corrupt industry. First was gasoline via the EV route, then it was solar to lower the corrupt utilities’ control. Battery storage is the final leg of the stool, can’t wait until Powerwalls (or equivalent) become viable in my geographic area.

antrik

Well, it’s certainly true that rooftop solar + residential batteries can lower the grip of corrupt utilities. This project here is utility-operated, though — so it’s kinda irrelevant on that score…

Doggydogworld

$1 million per year, besides being a suspiciously round number, doesn’t pencil out. Even if they utilize the full 16 MWH every day, that’s less than 6 million kWh per year. So you need a 16 cent/kWh ($160/MWh) average cost difference to save $1m/year. And that’s gross savings, which ignores the ~$8M battery cost. It also ignores round-trip losses. To “save customers” $1m they need a ~30 cent price spread.

CO TOU rates indicate an 8-9 cent average spread.

United has 82k customers. If only 10% replaced one ICE with a BEV/PHEV, a mere 2 kWh per EV would match this system. Plus demand response from the EV fleet could vastly exceed 4 MW.

The cost savings is likely coming from avoiding the need to build and/or operate other fossil fuel power plants to accommodate the varying renewable load.

Adam

This, the number of resources needed for this battery system is way less then having a gas/diesel powerplant in standby. Though 1 million is really a drop in the bucket.

Windbourne

$1M is a drop for say California, or Xcel (colorado’s big utility). BUT, United is small. $1M is a lot of money.

Ron M

Your right California plans to install a Tesla Storage packs of 182 MW that’s capable of 1.1GWH of electricity. Now that’s going big.
https://www.engadget.com/2018/07/01/tesla-involved-in-major-pg-and-e-battery-project/

Doggydogworld

United doesn’t own or operate fossil plants. They purchase their power wholesale from the grid. CO is a mid-priced electricity state (9.83 cents/kWh retail), it’s really impossible to imagine the kind of sustained high wholesale prices needed for this system to save $1m/year. The numbers aren’t even close.

IMHO they wanted a new toy and did some funny math to cost-justify it.

ItsNotAboutTheMoney

You already noted that the battery capacity and power isn’t even close to matching customer demand. It’s going to be operating at the margins, not on the average.

Brett

Your assumption around average cost per MWH is not valid. Peaker electricity production costs are significantly higher than that. If you can balance peak demand using a battery, instead of a natural gas plant, or instead of significantly overbuilding electricity production capacity in order to service peak demand, then cost savings are easy to achieve.

This is why a $50M battery bank installed in South Australia was able to generate well over $10 million in revenue within the first 6 months of operations.

Doggydogworld

South Australia has a screwed up wholesale market mechanism which produces outrageous spot prices for a significant number of hours per year. Bulk batteries can indeed save money In such an abnormal environment, though effort would be better spent fixing the abnormalities.

CO shows no signs of being that screwed up. If anyone has historical wholesale price data showing otherwise I’d love to look into it.

You need 1200+ hours per year above $300/MWh wholesale to generate the quoted savings. A few hot afternoons here and there don’t even move the needle. Single-cycle peakers would absolutely print money at $150 on such a high duty cycle. There’s no way to keep prices above $300 that many hours without market-rigging.

Ron M

Guess what the utility in Australia had know competition. They actually charged 17,000 for short burst of power and couldn’t even supply the power in the milliseconds that Tesla could. It’s on the Web look it up.

Do Not Read Between The Lines

That’s not how the electricity grid works.

It’s something like this:
Some very, very cheap electricity.
Lots of cheap electricity.
Plus a bunch more expensive electricity.
Plus a bunch more very expensive electricity.
Plus some more eye-wateringly expensive electricity.
Make predictions years in advance so that you always have sufficient capacity to handle whatever demand there might be, and listen to people complain loudly when you get the predictions wrong.
Hide all of this from the customers.

Battery systems are now being used more because the falling costs, combined with very rapid response and precise control means that it can replace some of the eye-wateringly expensive and very expensive electricity, taking advantage of the very, very cheap electricity where possible to replace it.

Windbourne

In fact, all these ppl claiming that storage is about AE, really do not have a clue about this.
The utilities will use batteries as a means of buffering demand, as well as shifting costs (from cheap to expensive).
FOr the later, that is really important for places with time or demand bsaed pricing.

Doggydogworld

Battery systems are being used for a lot of reasons, many which have no sound economic basis. Fleets of EVs on smart chargers could provide FCAS and spinning reserve at zero cost. They can also take out the most expensive peakers at near-zero cost. Utility compensation is based on how much stuff they can convince the PUC to let them buy, though, not on how well they use their brains.

antrik

Demand response through smart EV charging is nice, but not nearly enough to cover all grid balancing needs. Especially not while EV penetration is a fraction of a percent…

Doggydogworld

This system hardly covers all their needs, either.

It’s true we need much higher EV penetration, of course. And smart charger infrastructure. Small co-ops like this are ideal for demonstration projects to show how EVs can help balance the grid. That’s a better long term investment than stationary batteries.

Ron M

Doggydogworld look at the attachment and see the number of cities, states and countries that have set a date for eliminating sales of diesels/ and diesel gasoline vehicle in the future. The number keeps growing

https://en.wikipedia.org/wiki/List_of_countries_banning_fossil_fuel_vehicles

These storage batteries are a great thing they store energy at peak renewable energy times and release energy at peak usage times. It’s a no brainer.

antrik

Good luck getting 10% of customers to replace one combustion car with a BEV within the next couple of weeks… Or within the next few years, for that matter.

Ron Swanson's Mustache

Neat to see this going in. Large battery banks really seem to be the missing piece that will allow wind/solar renewables to be viable as a power source rather than just a vanity project for the virtue signalling green set.

Intersting to note that this is a 4mw project, as compared to the one in Australia, which is 100mw.

antrik

Wind and Solar are perfectly viable as power sources even without batteries… They just start running into problems when penetration becomes pretty high. With batteries (along with demand response etc.), these problems can be solved.

Windbourne

I would like to know how much this costs. Saving 1M / year is good, but not if it costs 50M.

Ron M

Australians 100 MW unit cost 66 million and saved 17 million per Electrik article written on 9/24/2018

antrik

Did you know that on the internet, you can link to other articles directly?… 😛 https://electrek.co/2018/09/24/tesla-powerpack-battery-australia-cost-revenue/

G2

Presumably, the savings are Net vice Gross.

Doggydogworld

Cost should be around 8m.

Windbourne

Colorado already has 2 others either in-place or going in (not sure which).
Xcell is buying a large unit and putting it north of the Springs.
In addition, the DOD is buying one, and putting it in Cheyenne Mountain (NORAD operates out of there and looks out for Russian and Chinese launches).

antrik

The best part is the footage of the inverter cabinet — haven’t seen how it looks on the inside before 🙂