Energy

Tesla’s virtual power plant under fire from South Australia’s new premier

Tesla’s plans of setting up a 250 MW/650 MWh virtual power plant comprised of 50,000 residential homes and Powerwall 2 units have hit a massive roadblock, with newly elected South Australia premier Steven Marshall expressing his opposition to the project. According to the premier, his government intends to replace the virtual power plant with a new initiative that involves subsidies to residents in the region.

Marshall expressed his stern opposition to Tesla’s plan shortly before he was sworn in as South Australia’s premier. The newly elected Liberal explained that the virtual power plant, which was a project started by his predecessor, former premier Jay Weatherill, will be replaced with another initiative that also involves renewable energy, as noted in a report from Renew Economy.

“(Former premier Jay Weatherill) was doing it for Housing Trust homes in South Australia… That’s not part of our plan. What we are going to do is provide a subsidy to get (those with) solar rooftops systems with some storage capacity,” the newly elected premier said.

Marshall explained his plan to replace Tesla’s virtual power plant further, stating that the government would be proceeding with his previously announced commitment to issue a $100 million subsidy for 40,000 residential units. Each of the residential units will be given a $2,500 subsidy for home battery packs. Unlike Tesla and the former premier’s plan, however, Marshall’s government aims to provide grants to homes that already have solar panels installed.

This is in stark contrast to Tesla’s proposal for its 250 MW/650 MWh virtual power plant, which involves providing Tesla Powerwall 2 batteries and solar panels to 25,000 Housing Trust households and 25,000 private low-income homes for free. To fund the project, the South Australian State government would help in the release of a $2 million grant and another $30 million loan from the Renewable Technology fund. Additional funding for the virtual plant, which is expected to cost $800 million when complete, would come from investors.

With this in mind, Marshall’s plan to discontinue Tesla’s virtual power plant and pursue subsidies instead would result in more expenses from the government. Apart from this, the newly-elected premier’s initiative would likely be out of reach for low-income households as well, considering that residents who will be part of Marshall’s plan still need to get solar panels installed, while covering part of the home battery storage units’ price.

If completed, Tesla’s proposed 250 MW/650 MWh virtual power plant would boast roughly six times more energy storage capacity than the company’s 100 MW/129 MWh Hornsdale Wind Farm Powerpack system near Jamestown. As we noted in a previous report, even the Jamestown Powerpack farm has received flak from the Australian government recently, with LNP senator and Minister for Resources Matt Canavan describing the big battery as the “Kim Kardashian” of the energy industry.

Tesla’s virtual power plant under fire from South Australia’s new premier

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