Bold Thinking Tesla Battery Takes Off

It has been just over a week since the Tesla Powerwall battery was announced by Elon Musk. As he mentioned this represents a fundamental transformation in the way that energy is used in the home and in businesses.

What the Powerwall battery enables is a way to bridges the gap between peak and trough usage – especially power from solar generation. The real world hold-up on this has been having a cheap, easy way of storing energy in the home. Sure there are other battery storage systems out there and for “off the grid” users they are expensive but necessary.

The real innovation here is a product one for electricity consumers who are “on the grid” for the most part but due to sunshine or wind fluctuations cannot always generate enough power to make a real difference. In simple terms – they now get to use power from their solar systems at night when the sun doesn’t shine.

In some cases electricity consumers who generate extra power can sell that back to the grid although in New Zealand the price they get is is relatively little. Much better to not pay full rates from their local utility.

Surprisingly a local Auckland utility sees the battery as a game changer rather than a threat to them.

Vector chief executive Simon Mackenzie believes Tesla’s new batteries will help transform the energy sector.He said the battery – which can store large amounts of energy in a small space and at a relatively low cost – was the biggest technology advance he’s seen in his 30 years in the energy industry.”Looking into the future it completely changes the way the energy sector has to think. It will change the way we design and build networks and generation,” Mackenzie said…

“We have to embrace this rather than hope it will go away.”

The biggest mistake would be overinvesting in traditional lines infrastructure that could be obsolete in a few years.

The larger domestic Tesla battery which sells for US$3500 could provide the equivalent of half a day’s power if storing solar energy, and if joined together could make a household self-sufficient.

Mackenzie said it would provide some remote houses the opportunity to get off the grid but he expected most to stay connected for security of supply and to be able to sell back into the system.”

Musk claims that only a small amount of land* is required to generate electricity from solar and that to store all of that electricity an even smaller amount of room. * In U.S to replace non renewable energy.


And within the blue area – a small red dot for the batteries. This is extraordinary. If it is true these batteries represent a huge leap forward for human kind if we don’t ignore the challenge and the opportunity to switch to a solar powered future.


You should watch the full video clip of the Powerwall battery launch below.

The most interesting benefit for businesses who could install the larger Powerwall batteries (called Power Packs) is that they could use battery storage to store power on their regular rates and to use less power at peak rates later in the day.

They would get more benefit from having their own solar or wind generation but the point is that the batteries can work on the grid with regular power. Inverters would be needed of course but if you have a solar array you already would have an inverter of some scale.

In New Zealand generation, lines companies – distribution and the retail power companies are all separate. Although in practice they are closely linked. It is however possible to buy power on the spot market and those large power consumers would benefit.

Flick Electric Co. is the only power company that gives New Zealanders access to the wholesale price of electricity direct from the spot market.

In theory Tiwai Point which has a base contract of 572MW could use Power Pack batteries to help store and manage its electricity use although as the largest electricity consumer in N.Z they already get prices that are less than 20% of what most households pay. BTW Tiwai Point bounced back into profit in the current year.

The operator of Southland’s Tiwai Point aluminium smelter has posted a $74 million profit despite a volatile aluminium market and high domestic power prices.Located on Southland’s Tiwai Peninsula, New Zealand’s Aluminium Smelter (NZAS) is one of two smelters in the world producing ultrahigh purity aluminium. The profit follows a deal for cheaper power and a $30m Government hand-out in 2013.

For Vector the obvious play is to invest in solar generation and storage systems for their larger clients. Something like the Solarcity business model. I’m sure that there would be large sites where adding battery storage would smooth out demand and even be a way to store conventionally generated electricity at the the point of use.

Think about it. You probably use a laptop at work which is on mains power much of the day. When you are away from the office you are on battery at least part of the time and then back on mains again.

The other area of innovation would be in financing larger scale solar generation projects. Unless you are building a new home for most consumers finding an extra $25 or $30k to install solar panels and storage is still a reasonable barrier to entry. A utility company might be interested in such an idea.

A few years ago Shai Agassi launched an electric car project which was based on swapping batteries in electric cars. The swap process ( and the batteries) were not so good and after burning through $850m at least the project was closed down. The real innovation from Shai was the concept of splitting the ownership of the batteries from the ownership of the cars themselves. In the Agassi business model the batteries were leased which was a smart way to make the cars more affordable.

One likely issue would be supplying battery demand from the Tesla factory.

So many people have ordered Tesla Motors’ new home-based battery packs — unveiled by the electric automaker just last week — that the company may need to expand its $5 billion battery factory now under construction in Nevada, CEO Elon Musk said Wednesday.

Tesla has received 38,000 reservations for the new Powerwall home battery, Musk said, with some people ordering more than one. The battery, the smallest version of which sells for $3,000, is designed to help homeowners with solar arrays store energy from their panels for use at night.

In addition, Musk said 2,500 businesses have placed online reservations for Tesla’s new Powerpack batteries, capable of storing far more energy than the Powerwall. And most of those businesses ordered multiple Powerpacks.”

Incredibly the patents and other IP needed for others to build a Powerwall battery factory are available under open source licensing.

“If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.…..

Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.”

What’s Driving Tesla’s Open Source Gambit? has more on the thinking behind this.

Tesla themselves may struggle with scaling up the plant needed to supply batteries to the world but there is nothing to stop utilities and other businesses in the sector opening their own factories.

Maybe Vector will do just that? Regardless this is an exciting innovation and optimistically it may even help slow down (flatten the curve) on global climate change.

P.S 21/05/2015 This from an architecture focussed site > Essay by Dan Hill: On Tesla Powerwall, and the skirmish between Moore’s law and physical laws

“While battery storage is not a pure software problem, as raw physics still define many of the basic conditions, that dynamic suggests that Musk’s intimations are not idly made, with Tesla’s algorithms determining when to switch to stored energy, how to optimise its performance. As Marc Andreeson has said, software is eating the world. Sector after sector. Here at last is a startup-driven product that eats an aspect of an unhealthy world—that of fossil fuel-powered energy generation—and potentially replaces it with a better one.”


“Powerwall, and what follows in its wake, will shape cities accordingly too, in equally fundamental ways. The most interesting questions about a new kind of urban design do not concern traditional architecture and urbanism, but instead ask how contemporary networked technologies change interactions, services and spaces in cities—Powerwall can be seen in this context.”


“This is the key question about Californian tech; can we ignore their ideology and lifestyle and just steal their machines? I don’t see why not.”


“While any move away from fossil fuels is a move in the right direction, Tesla’s announcement also fuelled a debate in the ‘critical metals’ world about the amounts of lithium, cobalt and graphite in the batteries, and then in ground.”

Worth reading in full to get an idea of the overall impact on the urban landscape that the PowerWall represents.