Tesla and its allies in Australia’s renewable energy sector are taking a stand against the country’s proposed new network fees, which could render solutions such as battery storage systems impractical. The new network fees are part of a set of new and revised rules that were initially unveiled in July.
The rules were designed to clarify how battery storage systems are classified in the grid, as well as their role when they are combined with other renewable solutions such as solar and wind. The Australian Energy Market Commission is expected to make a ruling on the matter this coming Thursday.
As noted in a Renew Economy report, a good portion of Australia’s new and revised rules were actually welcomed. However, they also included a proposal to require energy storage installations — such as the Tesla Powerpack-powered Hornsdale Power Reserve — to pay for transmission and distributed chargers when they are charging or discharging. These proposed network fees have unsurprisingly received opposition from advocates of renewable energy such as Tesla.
Together with Tesla, fellow battery provider Fluence, project developers Neoen and Iberdrola, hydro storage company CleanCo, and government-owned generator Snowy Hydro, have all taken a stand against the proposed network fees. Even key utilities such as AGL, EnergyAustralia, and the Australian Energy Market Operator, have expressed their opposition to the proposed fees as well.
In a submission, Tesla noted that the new network fees would likely destroy the viability of grid storage projects. “(These) charges kill the commercial viability of all grid storage projects, causing inefficient investment in alternative network and/or less flexible generation assets,” Tesla stated in a submission.
Neoen shared the EV maker’s sentiment. “The economics of storage are already challenging. Further loading up costs merely discourages storage systems to commit. Consumers are left with more volatile wholesale outcomes and miss out on the reliability and security benefits of storage,” Neoen noted.
Overall, the sentiments of Tesla and its fellow renewable companies in Australia are quite justified. While battery storage systems have recently received victories with the proposed introduction of a market for fast frequency services (among others), operators have stated that challenges still remain in their operations. And with the addition of new network fees, the returns of battery installations would decrease substantially.
This is something acknowledged by AEMO, which stated that there should be a “clear exemption” for batteries. “Without this change, the ability of market participants to contract the offtake of their facilities will be hampered. Pricing this risk will increase cost for all consumers,” AEMO noted.
*Quotes courtesy of Renew Economy.
The Teslarati team would appreciate hearing from you. If you have any tips, reach out to me at maria@teslarati.com or via Twitter @Writer_01001101.
Energy
Tesla Energy celebrates one decade of sustainability
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy recently celebrated its 10th anniversary with a dedicated video showcasing several of its milestones over the past decade.
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy Early Days
When Elon Musk launched Tesla Energy in 2015, he noted that the business is a fundamental transformation of how the world works. To start, Tesla Energy offered the Powerwall, a 7 kWh/10 kWh home battery system, and the Powerpack, a grid-capable 100 kWh battery block that is designed for scalability. A few days after the products’ launch, Musk noted that Tesla had received 38,000 reservations for the Powerwall and 2,500 reservations for the Powerpack.
Tesla Energy’s beginnings would herald its quiet growth, with the company later announcing products like the Solar Roof tile, which is yet to be ramped, and the successor to the Powerwall, the 13.5 kWh Powerwall 2. In recent years, Tesla Energy also launched its Powerwall 3 home battery and the massive Megapack, a 3.9 MWh monster of a battery unit that has become the backbone for energy storage systems across the globe.
Key Milestones
As noted by Tesla Energy in its recent video, it has now established facilities that allow the company to manufacture 20,000 units of the Megapack every year, which should help grow the 23 GWh worth of Megapacks that have already been deployed globally.
The Powerwall remains a desirable home battery as well, with more than 850,000 units installed worldwide. These translate to 12 GWh of residential entry storage delivered to date. Just like the Megapack, Tesla is also ramping its production of the Powerwall, allowing the division to grow even more.
Tesla Energy’s Role
While Tesla Energy does not catch as much headlines as the company’s electric vehicle businesses, its contributions to the company’s bottom line have been growing. In the first quarter of 2025 alone, Tesla Energy deployed 10.4 GWh of energy storage products. Powerwall deployments also crossed 1 GWh in one quarter for the first time. As per Tesla in its Q1 2025 Update Letter, the gross margin for the Energy division has improved sequentially as well.
Tesla Energy shined in what was a weak delivery report for the first quarter, as the company’s frequently-forgotten battery storage products performed extraordinarily well.
Tesla reported its Q1 production, delivery, and deployment figures for the first quarter of the year, and while many were less-than-excited about the automotive side, the Energy division performed well with 10.4 GWh of energy storage products deployed during the first quarter.
This was a 156 percent increase year-over-year and the company’s second-best quarter in terms of energy deployments to date. Only Q4 2024 was better, as 11 GWh was recorded.
Tesla Energy is frequently forgotten and not talked about enough. The company has continued to deploy massive energy storage projects across the globe, and as it recorded 31.5 GWh of deployments last year, 2025 is already looking as if it will be a record-setting year if it continues at this pace.
Tesla Megapacks to back one of Europe’s largest energy storage sites
Although Energy performed well, many investors are privy to that of the automotive division’s performance, which is where some concern lies. Tesla had a weak quarter for deliveries, missing Wall Street estimates by a considerable margin.
There are two very likely reasons as to why this happened: the first is Tesla’s switchover to the new Model Y at its production facilities across the globe. Tesla said it lost “several weeks” of production due to the updating of manufacturing lines as it rolled out a new version of its all-electric crossover.
Secondly, Tesla could be facing some pressure from pushback against the brand, which is what many analysts will say. Despite the publicity of attacks on Tesla drivers and their vehicles, as well as the company’s showrooms, it would be safe to assume that we will have a better picture painted of what the issue is in Q2 after the company reports numbers in July.
If Tesla is still struggling with lackluster delivery figures in Q2 after the Model Y is ramped and deliveries are more predictable and consistent, we could see where the argument for brand damage is legitimate. However, we are more prone to believe the Model Y, which accounts for most of Tesla’s sales, and its production ramp is likely the cause for what happened in Q1.
In what was a relatively bleak quarter, Tesla Energy still shines as the bright spot for the quarter.
Tesla has chosen the location of its latest manufacturing project, a facility that will churn out the Megapack, a large-scale energy storage system for solar energy projects. It has chosen Waller County, Texas, as the location of the new plant, according to a Commissioners Court meeting that occurred on Wednesday, March 5.
Around midday, members of the Waller County Commissioners Court approved a tax abatement agreement that will bring Tesla to its area, along with an estimated 1,500 jobs. The plant will be located at the Empire West Industrial Park in the Brookshire part of town.
Brookshire also plans to consider a tax abatement for Tesla at its meeting next Thursday.
The project will see a one million square-foot building make way for Tesla to build Megapack battery storage units, according to Covering Katy News, which first reported on the company’s intention to build a plant for its energy product.
CEO Elon Musk confirmed on the company’s Q4 2024 Earnings Call in late January that it had officially started building its third Megapack plant, but did not disclose any location:
“So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.”
Tesla plans third Megafactory after breaking energy records in 2024
The Megapack has been a high-demand item as more energy storage projects have started developing. Across the globe, regions are looking for ways to avert the loss of power in the event of a natural disaster or simple power outage.
This is where Megapack comes in, as it stores energy and keeps the lights on when the main grid is unable to provide electricity.
Vince Yokom of the Waller County Economic Development Partnership, commented on Tesla’s planned Megapack facility:
“I want to thank Tesla for investing in Waller County and Brookshire. This will be a state-of-the-art manufacturing facility for their Megapack product. It is a powerful battery unit that provides energy storage and support to help stabilize the grid and prevent outages.”
Tesla has had a lease on the building where it will manufacture the Megapacks since October 2021. However, it was occupied by a third-party logistics company that handled the company’s car parts.
Elon Musk is now a remote DOGE worker: White House Chief of Staff
Tariff reprieve might be ‘Tesla-friendly,’ but it’s also an encouragement to others
Tesla Cybertruck RWD production in full swing at Giga Texas
-
News1 week agoTesla’s Hollywood Diner is finally getting close to opening
-
Elon Musk2 weeks agoTesla doubles down on Robotaxi launch date, putting a big bet on its timeline
-
News6 days agoTesla is trying to make a statement with its Q2 delivery numbers
-
Investor's Corner1 week agoLIVE BLOG: Tesla (TSLA) Q1 2025 Company Update and earnings call
-
Elon Musk2 weeks agoTesla reportedly suspended Cybercab and Semi parts order amid tariff war: Reuters
-
SpaceX2 weeks agoSpaceX pitches subscription model for Trump’s Golden Dome
-
News2 weeks agoDriverless Teslas using FSD Unsupervised are starting to look common in Giga Texas
-
News4 days agoNY Democrats are taking aim at Tesla direct sales licenses in New York