According to Elon Musk, Tesla Energy aims to be a large, distributed electric utility that could soon surpass the Tesla automobile business. Tesla Energy will be a key part of Tesla’s activity in the future.
Tesla Energy was founded with the mission to promote sustainable energy. Elon Musk says that Tesla has always been focused on sustainable energy production and consumption.
It is planned to continuously deploy small and large solar and energy storage systems. All energy storage systems, from small to large-scale residential use, would be managed on a single platform, and this would act as an electric utility.
Autobidder, a product that pushed the company towards its goal, was released a few years back. It’s software that controls energy assets.
On its website, Tesla describes the platform as:
Autobidder gives independent power producers, utility companies, and capital partners the freedom to monetize their battery assets independently. Autobidder, a real-time trading platform and control platform offers portfolio optimization and value-based asset management. It allows owners and operators to create operational strategies that maximize their revenue in accordance with their business goals and risk preferences.
Companies can use the platform more effectively and directly monetize energy storage assets such as Tesla’s Powerwalls and Powerpacks and the new Megapacks.
Autobidder manages the Hornsdale Power Reserve, also known as the “Tesla Large Battery” in Australia. The Powerwall deployment in Vermont is also managed with Autobidder. Now, Tesla’s Autobidder will enter the European energy market. However, the platform is compatible with any type of energy storage.
Tesla claims that Autobidder manages hundreds of megawatt-hours worth of assets, which have provided gigawatt-hours worldwide grid services. Furthermore, Autobidder can operate at all scales, from large-scale aggregations of residential systems behind the meter to utility-scale installations up to 100MW. In addition, auto bidder’s seamless hardware and software integration allows for immediate revenue capture, even after the project is complete. This also makes it possible to work 24/7 in dynamic environments.
Tesla recently joined the European Power Exchange (EPEX SPOT), an electric power market that operates in many European markets. It will connect its Autobidder platform with the system.
Rohan Ma, an executive at Tesla Energy, stated on EPEX SPOT’s announcement:
We are thrilled to launch the Autobidder platform in Europe to help Tesla customers monetize energy storage assets in electricity markets.
This means that Tesla will have big business in the future. As they claim, the energy side of Tesla will soon catch up with the auto business. It’s a good thing, too, because electric vehicles need clean power to be charged up to have the best possible impact on the environment.
Autobidder gives independent power producers, capital partners, and utilities the ability to monetize their battery assets autonomously. Autobidder, a real-time trading platform, and control platform provide portfolio optimization and value-based asset management. It allows owners and operators to create operational policies that boost revenue according to their risk preferences and business objectives. Autobidder is part of Autonomous Control’s suite software solutions for optimization.
Autobidder is operating successfully at Hornsdale Power Reserve in South Australia. Market bidding has also added competition to lower energy prices.
Value Stacked Monetization
Although batteries are flexible assets that you can in many ways, they need smart strategies and software to realize their full potential. Autobidder helps owners realize this value by managing the complex co-optimization necessary to stack multiple value streams simultaneously.
- Bilateral contractual arrangements
- Other portfolio needs
- Renewable shaping and firming
- Transmission & Distribution-level grid services
- Wholesale markets include energy, ancillary, and capacity
Autobidder is available on wholesale markets and includes participation in the following, if regionally applicable:
- Continuous markets
- Day-ahead markets
- Markets in real-time
Real-Time Market Operations
Autobidder manages hundreds of megawatts of assets that have provided gigawatt-hours worldwide grid services. Autobidder is able to operate at all scales, from large-scale aggregations of residential systems behind the meter to utility-scale installations up to 100MW. Auto bidder’s seamless integration of hardware and software allows for immediate revenue capture after project energization. It can also be used 24/7 in dynamic environments.
Autobidder is hosted in Tesla’s highly secure and reliable cloud infrastructure. It is designed to handle large-scale complex computations and interface with network providers, market operators, and customer networks via secure web APIs.
Machine Learning and Optimisation Algorithms
Tesla’s experienced team of machine learning engineers, optimization engineers, and market trading specialists have developed a collection of complex algorithms to drive the complex optimal dispatch behavior behind Tesla’s batteries.
These algorithms are based upon many mathematical techniques, including machine learning and classical statistics. The library contains the functionality to perform:
- Dispatch optimization
- Generation forecasting
- Load forecasting
- Forecasting price
- Smart bidding
Auto bidders algorithms are adaptable to new markets and services and are continuously improved through the use of experiential data. This allows for high financial performance in dynamic market environments.
Autobidder was created to work with human operators and enhance their capabilities. Autobidder executes market transactions continuously using a numerical optimization model. It is based upon the parameters set by human operators and adjusted to reflect the preferences of the trading desk.
Autobidder management ensures that energy storage warranties are protected for asset owners. Autobidder uses Tesla’s deep knowledge of battery system physics down to the cell level to determine the cost and benefit for every possible action to maximize the asset’s net present value.
German Energy Market Opportunity
Tesla tests circuits in Germany for its push to the energy market. Elon Musk seems to be opening up a new front in Europe’s battle for supremacy in electric cars: the power behind the wheels.
Musk’s Tesla TSLA.O. Musk recently obtained a license that will allow the carmaker to trade electric across western Europe. The company also has been surveying German customers about the possibility of using Tesla electricity in their vehicles.
According to energy industry executives and consultants, such moves could open the door for the company, possibly along with one or more partners, to acquire established utilities in Germany. Germany is Europe’s largest power market and the heartland of the auto industry.
Tesla declined to comment on its plans for the energy market.
Tesla could generate and trade power to lower its running costs at a moment when other automakers like Audi NSUG.DE and Germany’s BMW BMWG.DE are producing new electric models.
It could increase competition to utilities like Vattenfall [VATN.UL] or EnBW EBKG.DE. These utilities are also investing in electric mobility services but, like their peers, RWE RWEG.DE or E.ON EONGn.DE, are burdened by the costs of closing down nuclear and fossil fuel power plants.
Tesla sells solar panels and Powerwall batteries for homes. However, Tesla appears to be now looking to sell electricity directly to customers. The home storage systems can also be used to provide grid services.
The company joined the Paris-based EPEX Spot Power Exchange in June. This platform is used for trading large amounts of intraday cross-border electricity from western Europe.
It surveyed German customers a month later about their interest in energy service.
According to Reuters, the survey asked respondents, “What would motivate you to switch to your existing energy supplier?”
It added, “Would a Tesla Photovoltaic System and Home Storage (Tesla Powerwall) if you could switch over to a Tesla electricity tariff?”
Tesla also asked potential customers if they would let Tesla control the time that cars charge.
Consultants and industry executives suggested that this could enable it to charge with low power rates during off-peak hours.
This could allow Tesla to store power from customers and balance the electricity grid. This is a vital service for Germany, which has become more dependent on solar power and volatile wind power.
Companies offering similar services in Germany such as Shell’s RDSa.L.Nennen, Next Kraftwerke virtual power plant operator Next Kraftwerke and Lichtblick power aggregator.
According to Reuters, Tesla’s interest and commitment to renewable energy was one reason it chose Brandenburg state near Berlin for its new factory.
About 65% of the Brandenburg grid’s electricity was generated from renewable sources in the first half of this year, mostly wind. However, it is also like other parts of the country in the north, where it wastes energy as Germany’s network limits the amount of green power they can transport over long distances.
According to 50Hertz, Tesla’s Gigafactory 4 will require 100 megawatts (MW) and 400 MW if launched with battery cell production.
Experts such as utility Axpo say Tesla is far from having enough battery assets to provide frequency regulation at a grid-scale scale. However, the company has taken several steps to increase its energy activities over recent months.
According to the Telegraph newspaper, it applied for a UK license to supply power in May. It uses the platform to connect users of its Powerwall and solar battery systems into Australia’s electricity market.
Berthold Hannes, a consultant with 30 years of experience in energy advisory, stated that Tesla’s next step is to go into production.
He said that Tesla could have its own sites, such as the roofs of plants and the charging points. Or, alternatively, it could be stakeout in solar parks or wind farms.
Germany was the first to market solar power. Germany is currently establishing a policy framework that will facilitate decentralized power generation.
“Tesla’s long-term plan definitely involves tackling the energy industry in an even bigger way,” stated a former member of Tesla management who refused to be identified.
Thomas Deser, Union Investment’s portfolio manager, stated that it was unlikely that Tesla would enter Germany’s electricity distribution business by itself – but it could with a partner from the energy sector.