New Tesla Venture Means “Strife” for Utilities

March 3, 2014


Business Week:

Shifting to greater use of wind and solar power will bring “some amount of strife for the existing utilities, especially for those invested more heavily in fossil fuels,” Musk, who is also chairman of solar-power company SolarCity Corp. (SCTY:US), said yesterday at a California Public Utilities Commission event in San Francisco.

Along with cheaper batteries to drive down the cost of Tesla’s Model S electric sedan, now priced from $71,000, the company is designing stationary battery packs “that last long, are super safe and are compact,” Musk said.

“We do want to make sure we have battery production capacity at a compelling price to offer a large-scale use of stationary storage,” Musk said. “Hopefully, we’ll have that plant up and running in about three years.”

The South African-born Musk, 42, and his cousin, SolarCity CEO Lyndon Rive, spoke at the commission as part of its “Thought Leaders” series. The agency regulates power companies in California.

“There is no doubt storage will become cost effective and deliver electricity with storage at night,” Rive said.

Utilities in California, which are taking months to connect residential solar panels to their systems, are delaying change because they profit from the current system, Rive said.

“When you have a game-changing technology, those in the game don’t want to change,” Rive said. “They like the existing game, the sole source, cost-plus model.”

It now takes eight months for utilities in California to connect a SolarCity solar and energy storage system to the grid, Rive said.

Tesla’s proposed battery factory could accelerate changes in the electric utility business as more customers start producing and storing their own power, Adam Jonas, a Morgan Stanley analyst, said in a Feb. 25 note. Musk is also the largest shareholder in SolarCity, which offers Tesla batteries as part of a system for its rooftop solar customers in parts of California and New England.

Other companies are starting to provide similar products as customers seek ways to cut the cord to the traditional U.S. monopoly power utility, which had sales totaling about $360 billion in 2012.

11 Responses to “New Tesla Venture Means “Strife” for Utilities”

  1. redskylite Says:

    Go Solar, wind, hydro, geothermal, nuclear or ocean/sea/marine lets ditch fossil fuel, leave the remainder under sea or terra firma and stop being punished and abused by every major conflicts, that we humans seem to be subject to.

    • If you’re still connected to the grid, you’re still using whatever it uses.  If it burns fossil fuel, you’re using fossil fuel.

      Even worse, if the variability of all your “carbon-free” generation pushes bigger but less flexible carbon-free generators out of the market, the total carbon emissions can go UP.

    • Utilities, unless prohibited by law, can make you either play nice with the grid or get off it.

      That’s what it comes down to, and all these things like net metering are just legislated end-runs around the rules which control all the other generators (and many consumers) on the grid.  Those rules exist to keep the grid operating, compensate all entities for their contributions and prevent freeloading; lawmakers meddle at our peril.  If it becomes feasible to leave the grid, let it happen!  But the grid is the only way to get juice from a wind farm that’s even across town (let alone across the state), so most people don’t have that option even if they use all-RE.  Burning natural gas to back up your rooftop panels means you’re not carbon-neutral.

      Power transmission on AC networks is a matter of physics, not whimsy.  I’m sure lawmakers can write rules that put private grid operators out of business.  The problem is that the grid will die with them.

      • MorinMoss Says:

        “Utilities, unless prohibited by law, can make you either play nice with the grid or get off it.”

        Therein lies the problem – essential monopolies.

        “Those rules exist to keep the grid operating” / “lawmakers meddle at our peril”

        Sometimes meddling is necessary and not meddling is negligence. I hope the lessons from the Enron debacle have not been forgotten.

        “The problem is that the grid will die with them”

        Really? If they can’t cut it, then others will step up or the existing will be made public.
        This is not a “don’t wanna play no more; take toys and go home” game.

        I know that some are viscerally opposed to anything being public so long as they’re allowed to profit from selling to the same.
        Nevertheless, if you can’t lead & won’t follow, GTFO.

        • LOL 🙂 all or nothing extreme approaches kind of silly. What are utilities going to do,much argue the same for solar PV users as if they had their pre solar bill? That will push the economics even further towards solar plus storage. I would like to start a conversation about how much users pay. Not their private bill, but how the utility charges. 13 ton15 c/ kwhr up to 350 kwhr. 32 to 36 c above that. Plus 29 c/ kwhr 1 to 7 pm. Anyone else?

        • Therein lies the problem – essential monopolies.

          Where you don’t have a monopoly, you have an Independent System Operator (ISO) doing that job.  Since it’s obvious that you don’t have a clue why, I’ll spell it out with emphasis:  if nobody keeps all the stuff balanced out right, things start breaking or fail altogether.

          The 8/14/2003 blackout was an example of stuff getting out of balance to the point of failure, which then cascaded; one specific problem was merchant generators refusing to supply reactive power.  The more generation you have that isn’t required to “play nice”, the bigger and more frequent such failures will be.  On a smaller scale, voltage surges and sags cause electronics to burn out and motor-driven devices to stall and overheat.

          I hope the lessons from the Enron debacle have not been forgotten.

          You obviously forgot them already.  California’s half-baked “deregulation” created the conditions for Enron’s antics.  Monopoly utilities under PUC oversight don’t become Enrons.

          The problem is that the grid will die with them

          Really? If they can’t cut it, then others will step up or the existing will be made public.

          Are you really that dense?  If you’ve legislated essential service providers out of business, NOBODY will step up.  Somebody either pays for the equipment, labor and fuel to provide them, or you do without.  Shifting costs created by “renewables” onto others only works as long as those others don’t quit the game.

          I get the feeling that Pakistan and India are your models for America’s future.  A few hours of juice a day, if you’re lucky.  A zillion soot-belching diesel generators for the times when the grid just isn’t there, so that you don’t sit in the dark and your food doesn’t rot in your refrigerator.  Maybe the municipal water is there and sewage treatment functions, and maybe it doesn’t.

          If you like that low-energy world so much, you can have it now.  Just go there, and leave the rest of us alone.

          • MorinMoss Says:

            I’ll reply more fully later as I’m pressed for time at the moment.
            But that will give you time to CTFD as your recent computer woes have clearly unhinged you.
            And work on a proper backup / recovery strategy while you’re at it; whatever you currently have isn’t working.

          • Hint:  “telepsychoanalysis” and shaming language is used by people who have neither facts nor reason on their side.

  2. […] 2014/03/03: PSinclair: New Tesla Venture Means “Strife” for Utilities […]

  3. […] 2014/03/03: PSinclair: New Tesla Venture Means “Strife” for Utilities […]

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: