Tesla teases world’s largest Virtual Power Plant in South Australia

Tesla recently posted the first teaser of its virtual power plant project in South Australia, providing a brief overview of the initiative, the resources it will entail, as well as its benefits to residents in the region.

Tesla’s South Australia virtual power plant, which will be comprised of 50,000 residential homes fitted with solar panels and Powerwall 2 home batteries, will be the world’s largest VPP system when completed. The company also noted that the system was specifically designed to support the state’s energy needs by lowering power rates for residents and providing additional stability to the grid. 

Tesla’s virtual power plant for South Australia was approved by the ruling  Liberal party last May, after Energy Minister Dan van Holst Pellekaan reaffirmed the government’s support for the project at the Australian Energy Storage Conference.

“It’s very important to be clear about this — we are honoring the existing commitments around the Tesla virtual power plant (VPP). The VPP project is currently proceeding with the two trial phases as planned. The trial phases involve installation of home energy systems on 1,100 Housing SA homes. These are supported by a $2 million grant and a $30 million loan from the State Government. Subject to private finance, and the first two phases’ success, the third phase could grow to up to 50,000 home batteries connected to new solar installations, and this is in addition to our government’s 40,000 home election commitment,” he said.

Before the Energy Minister’s announcement in May, Tesla’s virtual power plant seemed like it was in danger of being canceled. The comprehensive energy initiative was conceived by Tesla and the Labor party, but when the Liberal Party won the elections last March, new South Australian Premier Steven Marshall noted in a statement that his government would not be supporting the project. Instead, Marshall proposed a different energy initiative — one that involves giving subsidies for 40,000 homes to purchase home battery systems.

Unlike Tesla’s virtual power plant, Marshall’s plan would require homeowners to pay for their battery packs (albeit at a lower price), which would make the system unattainable for low-income households. Marshall’s plan would also be limited to homes that were already fitted with solar panels. In comparison, Tesla’s virtual power plant would provide both solar panels and Powerwall 2 batteries to low-income households for free.

Amidst backlash over his lack of support for the South Australia virtual power plant, Marshall ultimately took a more moderate stance on the project just a few days later. By the end of May, Energy Minister Dan van Holst Pellekaan announced the government’s support. The South Australian government further noted that Tesla’s virtual power plant would be set up alongside Marshall’s alternative battery storage subsidy plan.

Tesla’s virtual power plant project in South Australia is expected to deliver 250 MW of solar energy and 650 MWh of battery storage capacity when complete, dwarfing Hornsdale Wind Farm near Jamestown, which has a 100MW/129MWh capacity. The South Australia state government is assisting with the release of a $2 million grant and a $30 million loan from the Renewable Technology Fund to get the project underway. Additional funding for the virtual power plant, which is estimated to cost a total of $800 million when complete, is expected to be addressed by private investors.

The first phase of the South Australia virtual power plant, which involves the installation of solar panels and Powerwall 2 batteries to the first 1,100 homes in the system, is already underway.

Watch Tesla’s first teaser for the SA virtual power plant in the video below.