Elon Musk just gave us a tantalizing glance into Tesla‘s future, and it has nothing to do with an all-electric pickup truck – or electric vehicles at all. Instead, it’s a nondescript power bank that few people will ever see, much less purchase. It’s called the Tesla Megapack.
If you read the announcement, you might get confused about the purpose of this new product. No, the Megapack is not the next generation of the Powerwall that’s designed for home use. As this tweet states, it is for utility companies or power plants.
Also, it is important to note that it will not replace the traditional power plants that burn fossil fuels to generate electricity. The Megapack was created as a supplementary power source. The energy stored in Megapack batteries will be dispatched once demand exceeds the grid’s supply.
Think of a hot summer day when many residential and commercial establishments fire up the air conditioner to keep the environment cool. The energy requirement surges to the point that power plants cannot sustain the demand. When this happens, power plants rely on peaker plants. Most commonly known as “peakers,” these facilities run on natural gas and provide additional power when demand surpasses supply.
Contrary to popular belief, natural gas is not a clean energy source.
According to Green America, “Natural gas is a highly polluting fossil fuel.”
This is what Tesla’s Megapack seeks to replace.
Tesla’s Megapack is advertised as a plug-and-play solution that comes with three-megawatt-hours (MWh) of storage capacity per pack. The product is fully assembled in Tesla’s Gigafactory.
According to Tesla’s site, it includes “battery modules, bi-directional inverters, a thermal management system, an AC main breaker and controls.”
Tesla claims that it can put together a number of Megapacks to create a one-gigawatt-hour (GWh) power plant. Thus, a 1 GWh power plant will require 333 Megapacks. That’s a lot of business for Tesla.
Elon Musk accurately anticipates massive demand for peaker plants. According to research firms GTM Research and Wood MacKenzie, the US will require an additional 20 GWh of peaker capacity in the next ten years. If Tesla can secure contracts and create power plants to supply even just half – or 10 GWh – of additional peaking capacity, that’s equivalent to over 3,330 Megapacks.
Tesla has positioned the Megapack to retire natural gas peakers. Currently, the company claims that it can deploy a clean 250 MGW, 1 GWh power plant in less than three months. That timeframe is four times faster than a traditional power plant of the same size. This alone can save the utility companies time and money versus constructing a new natural gas facility.
On top of that, the Megapack can absorb power from solar and wind sources to provide renewable energy.
Most importantly, a Megapack power plant can be installed in locations that are closer to demand areas. This significantly reduces transmission costs and makes battery storage a better long-term investment than natural gas facilities.
The Megapack is an unmitigated win for Tesla.
Prioritizing utility-scale demand over residential storage needs is a savvy move, and credit goes to Elon Musk. He must have understood that there’s less competition in the space and the opportunity to generate profits is way bigger than powering individual homes.
The Megapack will save Tesla, but that’s likely only the beginning of what this product means. Following decades of false starts, we could be on the brink of a clean energy revolution, with Elon Musk at the helm.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.