Tesla has confirmed the launch of a brand new utility-scale energy storage product dubbed the Megapack. The product is actually molded after another giant battery system that the company recently deployed in Australia. The company says that it is looking to provide an alternative to natural gas peaker plants. This is not the first energy storage system by Tesla. In fact, it is the third. Tesla also offers a similar product known as the Powerwall and the commercial Powerpack system. However, it is the largest to date.
Tesla has said in the past that there is a real opportunity to expand its energy storage business. The company sees the new Megapack product as part of a long term effort to venture into this market. Despite this, energy storage still contributes very little to Tesla’s overall revenues. For example, out of the $6.4 billion in revenue posted in the second quarter of 2019, solar and energy storage accounted for about $368 million. This is a very small percentage.
But there are a few signs that the EV maker could be ramping up its interest in this area. In the second quarter of 2019, Tesla actually deployed a record 415 megawatt-hours of energy to grid systems. This represented an 81% increase compared to the previous quarter. Tesla’s second-quarter earnings’ report also noted that Powerwall, an energy storage product launched by the company, had been installed in more than 50,000 sites so far.
However, Megapack has the potential for being a game changer. The goal for Tesla would be to convince major utility companies to use its technology instead of gas peaker plants that are currently being used. It seems like the company is already making some headway on this. For instance, the Megapack is expected to provide up to 182.5 MW of the proposed 567 MW energy storage facility located in California.
Tesla says that the Megapack was designed to be a simple utility scale system that is easy to install. The company also notes that each Megapack system is already assembled. Battery modules, thermal management systems, bi-directional inverters, controls, and an AC main breaker have all been included. The system will also come with Tesla-developed software that will monitor and control all installations.
The utility scale system was largely inspired by the Hornsdale project. The project which is located in South Australia combines the company’s 100 MW Powerpack systems with a wind-power farm in a nearby town. The Powerpack system stores the energy generated from the farm and then delivers it to the grid during peak hours. Tesla notes that the facility was able to save up to $40 million in costs compared to normal natural peaker plants.
Tesla sees the Megapack as a sustainable alternative to gas peaker plants and will be hoping that major utility companies feel the same way. The product could make it easier for such companies to store solar or wind-generated energy and deploys it to the grid during peak hours at relatively lower costs.
