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Tesla's Virtual Power Plant rescues grid after coal peaker fails, and it's only 2% finished

(Credit: Tesla)

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Tesla’s Virtual Power Plant project in South Australia is only around ~2% complete, but it is already proving to be a difference-maker, rescuing Queensland’s grid during an unexpected power outage. The response time and efficiency of the Virtual Power Plant mirror that of Tesla’s other large-scale energy project in the region, the highly-acclaimed Hornsdale Power Reserve. 

Back in October, Queensland’s Kogan Creek coal power station, one of the largest in the region, tripped and caused the power system to drop well below the normal level of system frequency. Tesla’s Virtual Power Plant promptly stepped in, detecting the frequency drop and injecting power into the grid from Powerwall batteries loaded with energy from solar panels installed in SA Housing Trust properties across the state. 

In a statement about the VPP’s feat, South Australia Energy Minister Dan van Holst Pellekaan highlighted the fact that Tesla’s Virtual Power Plant is still in its early days. Despite this, it was able to respond quickly. The feat was no joke, considering that the Kogan Creek station is a fairly large coal power plant. “Although the Virtual Power Plant is in its early days, it is already demonstrating how it can provide the network support traditionally performed by large conventional generators,” he said

The Energy Minister’s statement is notable, considering that there are only about 900 homes forming the Virtual Power Plant as of date. Tesla’s target for the full VPP is a whopping 50,000 solar-powered, Powerwall-equipped homes. If less than 2% of the planned Virtual Power Plant can already rescue Queensland’s grid when a large coal plant fails, one can only imagine how much stability a fully-completed VPP could accomplish. 

Violette Mouchaileh, the executive general manager of emerging markets and services for the Australian Energy Market Operator (AEMO), expressed her optimism about the potential of Tesla’s Virtual Power Plant. “The SA VPP has proven the aggregation of distributed energy resources can benefit the power system and participating consumers. The opportunity for VPPs to reach a large scale will benefit all energy users through added competition to deliver services at reducing prices. We encourage more VPPS to register to accelerate the shared learning on how to safely and efficiently integrate, operate and regulate these emerging technologies into the NEM,” she said.

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The buildout of Tesla’s Virtual Power Plant in South Australia is expected to be completed in three phases. In Phase 1, energy systems will be delivered to 100 SA Housing properties. Phase 2 increases this number with an additional 1,000 homes equipped with solar panels and Powerwall batteries. Phase 3, provided that it does push through, would expand the system to 50,000 homes. So far, Phase 1 has been completed, and Phase 2 appears to be nearing completion as well. 

Once complete, Tesla’s Virtual Power Plant in South Australia will deliver 250MW of solar energy and store 650 MWh of backup energy for the region. That’s notably larger than the Hornsdale Power Reserve, which is already changing South Australia’s energy landscape with its 100MW/129MWh capacity. In a way, Tesla’s Virtual Power Plant may prove to be a dark horse for the company’s Energy Business, which is unfortunately underestimated most of the time. Couple this with the 50% expansion of the Hornsdale Power Reserve, and Tesla Energy might very well be poised to surprise in the coming quarters.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Energy

Tesla China’s Megafactory helps boost Shanghai’s battery exports by 20%: report

Located in the Lingang New Area of the Shanghai Free Trade Zone, the Tesla Megafactory has been running at full throttle since opening in February.

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Credit: Tesla Asia/X

Reports from China have indicated that the Tesla Shanghai Megafactory has become a notable player in China’s booming battery export market.

Located in the Lingang New Area of the Shanghai Free Trade Zone, the Tesla Megafactory has been running at full throttle since opening in February. It produces Tesla Megapack batteries for domestic and international use.

Tesla Shanghai Megafactory

As noted in a report from Sina Finance, the Tesla Shanghai Megafactory’s output of Megapack batteries helped drive a notable rise in lithium battery shipments from the city in the first three quarters of 2025. This is quite impressive as the Megafactory is a rather young facility, though it has been steadily increasing its production capacity.

“The establishment of this benchmark factory has not only driven the rapid development of Shanghai’s energy storage industry but also become a new growth engine for foreign trade exports. Driven by the Tesla energy storage factory’s opening, Shanghai’s lithium battery exports reached 32.15 billion yuan ($4.5 billion) in the first three quarters, a 20.7% increase,” the publication wrote.

Ultimately, the Shanghai Megafactory has proved helpful to the city’s “new three” industries, which are comprised of new energy vehicles, lithium batteries, and photovoltaic systems. Exports of the “new three” products reached 112.17 billion yuan ($15.7 billion), a 6.3% year-over-year increase during the same period. The city’s total trade volume grew 5.4% year-over-year as well, with exports up 11.3%, driven largely by the clean energy sector’s performance.

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Energy storage is helping Shanghai

Since opening in February, the Shanghai Megafactory has been firing on all cylinders. In late July, Tesla Energy announced that the new battery factory has successfully produced its 1,000th Megapack unit. That’s quite impressive for a facility that, at the time, had only been operational for less than six months. 

Speed has always been a trademark of the Shanghai Megafactory. Similar to Tesla’s other key facilities in China, the Megafactory was constructed quickly. The facility started its construction on May 23, 2024. Less than a year later, the site officially started producing Megapack batteries. By late March 2025, Tesla China noted that it had shipped the first batch of Megapack batteries from the Shanghai plant to foreign markets.

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Energy

Tesla recalls Powerwall 2 units in Australia

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(Credit: nathanwoodgc /Instagram)

Tesla will recall Powerwall 2 units in Australia after a handful of property owners reported fires that caused “minor property damage.” The fires were attributed to cells used by Tesla in the Powerwall 2.

Tesla Powerwall is a battery storage unit that retains energy from solar panels and is used by homeowners and businesses to maintain power in the event of an outage. It also helps alleviate the need to rely on the grid, which can help stabilize power locally.

Powerwall owners can also enroll in the Virtual Power Plant (VPP) program, which allows them to sell energy back to the grid, helping to reduce energy bills. Tesla revealed last year that over 100,000 Powerwalls were participating in the program.

Tesla announces 100k Powerwalls are participating in Virtual Power Plants

The Australia Competition and Consumer Commission said in a filing that it received several reports from owners of fires that led to minor damage. The Australian government agency did not disclose the number of units impacted by the recall.

The issue is related to the cells, which Tesla sources from a third-party company.

Anyone whose Powerwall 2 unit is impacted by the recall will be notified through the Tesla app, the company said.

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Energy

Tesla’s new Megablock system can power 400,000 homes in under a month

Tesla also unveiled the Megapack 3, the latest iteration of its flagship utility scale battery.

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Credit: Tesla

Tesla has unveiled the Megablock and Megapack 3, the latest additions to its industrial-scale battery storage solution lineup. 

The products highlight Tesla Energy’s growing role in the company, as well as the division’s growing efforts to provide sustainable energy solutions for industrial-scale applications.

Megablock targets speed and scale

During the “Las Megas” event in Las Vegas, Tesla launched Megablock, a pre-engineered medium-voltage block designed to integrate Megapack 3 units in a plug-and-play system. Capable of 20 MWh AC with a 25-year life cycle and more than 10,000 cycles, the Megablock could achieve 91% round-trip efficiency at medium voltage, inclusive of auxiliary loads.

Tesla emphasized that Megablock can be installed 23% faster with up to 40% lower construction costs. The platform eliminates above-ground cabling through a new flexible busbar assembly and delivers site-level density of 248 MWh per acre. With Megablock, Tesla is also aiming to commission 1 GWh in just 20 business days, or enough to power 400,000 homes in less than a month. 

“With Megablock, we are targeting to commission 1 GWh in 20 business days, which is the equivalent of bringing power to 400,000 homes in less than a month. It’s crazy. How are we planning to do that? Like most things at Tesla, we are ruthlessly attacking every opportunity to save our customers time, simplify the process, remove steps, (and) automate as much as we can,” the company said. 

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Megapack 3 is all about simplicity

The Megapack 3 is Tesla’s next-generation utility battery, designed with a simplified architecture that cuts 78% of connections compared to the previous version. Its thermal bay is drastically simplified, and it uses a Model Y heat pump on steroids. The battery weighs about 86,000 pounds and holds 5 MWh of usable AC energy. Tesla engineers incorporated a larger battery module and a new 2.8-liter LFP cell co-developed with the company’s cell team.

The Megapack 3 is designed for serviceability, and it features easier front access and no roof penetrations. About 75% of Megapack 3’s total mass is battery cells, with individual modules weighing as much as a Cybertruck. It’s also tough, with an ambient operating temperature range from -40C to 60C. This should allow the Megapack 3 to operate optimally from the coldest to the hottest regions on the planet.

Production is set to begin at Tesla’s Houston Megafactory in late 2026, with planned capacity of 50 GWh per year. Additional supply will come from Tesla’s 7 GWh LFP facility in Nevada, which is expected to open in 2025, as well as with third-party partners.

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