A few days ago, the Texas Public Utility Commission (PUC) said that it was creating a memo to address issues that Commissioner McAdams touched upon in the July 11 workshop. To recap, Tesla Energy has been working with the PUC and the Electric Reliability Council of Texas (ERCOT).
The focus is on educating the utility and the commission about the benefits of allowing Tesla Powerwall customers in Texas to participate in virtual power plants (VPPs).
Tesla’s U.S. Energy Markets Policy Lead, Arushi Sharma Frank has been present at every meeting and has been working diligently to advocate for clean energy and Tesla Energy’s Texas customers.
The Memo
The previously mentioned future memo addresses some of the issues that Commissioner McAdams brought up in the July 11 workshop. He and Commissioner Glotfelty co-authored the memo.
The memo reads as follows:
As discussed during the June 16, 2022, Open Meeting and July 11, 2022, Aggregated Distributed Energy Resources (DER) Pilot Workshop, we support efforts to create a pilot project to test impacts of small-scale DER aggregation in the ERCOT market.
The pilot will answer questions related to how aggregated distributed generation can support reliability, enhance the wholesale market, incentivize investment, potentially reduce transmission and distribution investments, and support better load management during emergencies.
In the short term, we expect the pilot will bring in vital megawatts (MWs) of resources for participation in the ERCOT market.
ERCOT staff are required to prepare and present a governing document detailing the project scope to ERCOT’s board of directors.
The PUC will form a Task Force to identify operational obstacles to launching a pilot program and to assist ERCOT in drafting the governing document.
The next meeting to discuss the purpose and structure of the Task Force will be held on July 28, 2022. The governing document should be presented to the ERCOT board by October 11, 2022, so that it can meet a desired pilot start in the first quarter of 2023.
The Guiding Principles
The memo included five guiding principles that the commissioners want the pilot project to consider. They are:
- Understand the impact of having ancillary services carried on the distribution system.
- Create a structure that incentivizes competition and attracts broad DER participation through load-serving entities (LSEs).
- Measure the impacts of relieving or causing congestion on the distribution system, and study how to transition distribution-level aggregations to more granular dispatch and settlement.
- Ensure adequate customer protection is in place and information is anonymized.
- Start simple while ensuring economies of scale exist on a MW [megawatt] basis to attract broad participation. The pilot parameters should have the flexibility to progress to more complex scenarios as participation increases.
Project Scope.
This next section of the memo addresses the governing document that shares the project scope with ERCOT’s board of directors. These topics are scale, duration, transmission and distribution utilities participation, interchange of customers, and reliability.
The following is from the memo detailing each topic:
- Scale – Aggregations should be constrained within a load zone, with a single LSE, and served by the same transmission and distribution service provider (TDSP) with the potential for DER Management Systems (DERMS) aggregators to participate in the future. Participating TDSPs may limit pilot area based on feeder availability and information provided by LSEs related to their DER customers.
- Duration – The pilot should continue until implementation of ERCOT market rules to accommodate aggregation or until ERCOT deems the pilot project unnecessary. We expect a minimum of 3 years which will allow for incorporation of EMS upgrades, testing of customer migration, and qualifying resources for ERCOT services.
- TDSP Participation – It is imperative that competitive area transmission and distribution utilities (TDUs) and non-opt-in entities (NOIEs) participating in the pilot are willing participants and actively engaged to ensure safety and quality of experience to their customers. We expect reliability to be the ultimate consideration by TDSPs for qualifying DER customers.
- Interchange of Customers – The acquisition of customers should be handled by the LSE with terms and conditions to provide relevant operational data and a good customer experience that prioritizes affordability and reliability.
- Reliability – TDSPs should have the ability to manage participation considering system constraints, regular maintenance, and emergency situations. ERCOT in participation with the TDSPs shall be enabled to mitigate operational hazards and demands in this new era of transmission and distribution management.
You can read the full memo here. Have tips? You can email them to johnna@teslarati.com.
Energy
Tesla Energy is the world’s top global battery storage system provider again
Tesla Energy captured 15% of the battery storage segment’s global market share in 2024.
Tesla Energy held its top position in the global battery energy storage system (BESS) integrator market for the second consecutive year, capturing 15% of global market share in 2024, as per Wood Mackenzie’s latest rankings.
Tesla Energy’s lead, however, is shrinking, as Chinese competitors like Sungrow are steadily increasing their global footprint, particularly in European markets.
Tesla Energy dominates in North America, but its lead is narrowing globally
Tesla Energy retained its leadership in the North American market with a commanding 39% share in 2024. Sungrow, though still ranked second in the region, saw its share drop from 17% to 10%. Powin took third place, even if the company itself filed for bankruptcy earlier this year, as noted in a Solar Power World report.
On the global stage, Tesla Energy’s lead over Sungrow shrank from four points in 2023 to just one in 2024, indicating intensifying competition. Chinese firm CRRC came in third worldwide with an 8% share.
Wood Mackenzie ranked vendors based on MWh shipments with recognized revenue in 2024. According to analyst Kevin Shang, “Competition among established BESS integrators remains incredibly intense. Seven of the top 10 vendors last year struggled to expand their market share, remaining either unchanged or declining.”
Chinese integrators surge in Europe, falter in U.S.
China’s influence on the BESS market continues to grow, with seven of the global top 10 BESS integrators now headquartered in the country. Chinese companies saw a 67% year-over-year increase in European market share, and four of the top 10 BESS vendors in Europe are now based in China. In contrast, Chinese companies’ market share in North America dropped more than 30%, from 23% to 16% amid Tesla Energy’s momentum and the Trump administration’s policies.
Wood Mackenzie noted that success in the global BESS space will hinge on companies’ ability to adapt to divergent regulations and geopolitical headwinds. “The global BESS integrator landscape is becoming increasingly complex, with regional trade policies and geopolitical tensions reshaping competitive dynamics,” Shang noted, pointing to Tesla’s maintained lead and the rapid ascent of Chinese rivals as signs of a shifting industry balance.
“While Tesla maintains its global leadership, the rapid rise of Chinese integrators in Europe and their dominance in emerging markets like the Middle East signals a fundamental shift in the industry. Success will increasingly depend on companies’ ability to navigate diverse regulatory environments, adapt to local market requirements, and maintain competitive cost structures across multiple regions,” the analyst added.
Energy
Tesla inks multi-billion-dollar deal with LG Energy Solution to avoid tariff pressure
Tesla has reportedly secured a sizable partnership with LGES for LFP cells, and there’s an extra positive out of it.
Tesla has reportedly inked a multi-billion-dollar deal with LG Energy Solution in an effort to avoid tariff pressure and domesticate more of its supply chain.
Reuters is reporting that Tesla and LGES, a South Korean battery supplier of the automaker, signed a $4.3 billion deal for energy storage system batteries. The cells are going to be manufactured by LGES at its U.S. factory located in Michigan, the report indicates. The batteries will be the lithium iron phosphate, or LFP, chemistry.
Tesla delivers 384,000 vehicles in Q2 2025, deploys 9.6 GWh in energy storage
It is a move Tesla is making to avoid buying cells and parts from overseas as the Trump White House continues to use tariffs to prioritize domestic manufacturing.
LGES announced earlier today that it had signed a $4.3 billion contract to supply LFP cells over three years to a company, but it did not identify the customer, nor did the company state whether the batteries would be used in automotive or energy storage applications.
The deal is advantageous for both companies. Tesla is going to alleviate its reliance on battery cells that are built out of the country, so it’s going to be able to take some financial pressure off itself.
For LGES, the company has reported that it has experienced slowed demand for its cells in terms of automotive applications. It planned to offset this demand lag with more projects involving the cells in energy storage projects. This has been helped by the need for these systems at data centers used for AI.
During the Q1 Earnings Call, Tesla CFO Vaibhav Taneja confirmed that the company’s energy division had been impacted by the need to source cells from China-based suppliers. He went on to say that the company would work on “securing additional supply chain from non-China-based suppliers.”
It seems as if Tesla has managed to secure some of this needed domestic supply chain.
Energy
Tesla Shanghai Megafactory produces 1,000th Megapack for export to Europe
The Shanghai Megafactory was able to hit this milestone less than six months after it started producing the Megapack.
Tesla Energy has announced a fresh milestone for its newest Megapack factory. As per the electric vehicle maker, the Shanghai Megafactory has successfully produced its 1,000th Megapack battery.
The facility was able to hit this milestone less than six months after it started producing the grid-scale battery system.
New Tesla Megapack Milestone
As per Tesla Asia in a post on its official accounts on social media platform X, the 1,000th Megapack unit that was produced at the Shanghai Megafactory would be exported to Europe. As noted in a CNEV Post report, Tesla’s energy products are currently deployed in over 65 countries and regions globally. This allows Tesla Energy to compete in energy markets that are both emerging and mature.
To commemorate the 1,000th Megapack produced at the Shanghai Megafactory, the Tesla China team posted with the grid-scale battery with celebratory balloons that spelled “Megapack 1000.” The milestone was celebrated by Tesla enthusiasts on social media, especially since the Shanghai Megafactory only started its operations earlier this year.
Quick Megafactory Ramp
The Shanghai Megafactory, similar to Tesla’s other key facilities in China, was constructed quickly. The facility started its construction on May 23, 2024, and it was hailed as Tesla’s first entry storage project outside the United States. Less than a year later, on February 11, 2025, the Shanghai Megafactory officially started producing Megapack batteries. And by March 21, 2025, Tesla China noted that it had shipped the first batch of Megapack batteries from the Shanghai plant to foreign markets.
While the Shanghai Megafactory is still not at the same level of output as Tesla’s Lathrop Megafactory, which produces about 10,000 Megapacks per year, its ramp seems to be quite steady and quick. It would then not be surprising if Tesla China announces the Shanghai Megafactory’s 2,000th Megapack milestone in the coming months.
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