PALO ALTO (CNN) — Tesla wants to do more than sell you an electric car. It wants to start selling electricity itself, at least to some people in Texas.
It has filed with the Texas Public Utility Commission to generate electricity and sell it directly to the public. Details about its exact plans are not included in the application and Tesla did not respond to a request for comment. But the company said in its filing it plans to sell electricity directly to consumers with a focus on those who already own Tesla cars.
The filing was first reported by Texas Monthly.
The company best known for being the largest electric vehicle company in the world also has a solar energy unit. Most of that business is focused on installing solar panels on homes or other buildings, which are then linked to batteries, which Tesla has branded as Powerwalls, used to store excess power captured during the day to provide power at night.
But Tesla has a very low-profile business known as “Megapack” that builds very large batteries used to store utility-scale amounts of electricity. It built the first of those massive batteries in Hornsdale, Australia, in 2017, and has since expanded the product to other locations.
“Battery storage is transforming the global electric grid and is an increasingly important element of the world’s transition to sustainable energy,” it said in a 2019 blog post. “To match global demand for massive battery storage projects like Hornsdale, Tesla designed and engineered a new battery product specifically for utility-scale projects.”
It’s a growing business. Tesla has said it is investing more of its available cash in its Megapack. Utilities have reported plans to install over 10,000 megawatts of additional large-scale battery power capacity from 2021 through 2023 from all manner of battery suppliers, according to the US Energy Information Administration. That’s up from only 1,650 megawatts of large-scale capacity in place at the end of last year.
Bloomberg reported earlier this year that Gambit Energy Storage LLC, a Tesla subsidiary, is quietly building a more than 100 megawatt energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston. A battery that size could power about 20,000 homes on a hot summer day.
But, so far, Tesla has sold Megapacks only to other companies and Tesla has not tried to sell directly to consumers. That would change, according to its filing.
Despite its long association with oil and natural gas, Texas has the third most EVs in the country, behind only California and Florida, according to recent statistics from Electrek. Texas also generates a significant portion of electrical power through solar and wind power, sources of power that need to have storage of electricity since they are not constantly available. Texas generates by far the greatest amount of electricity from wind power of any state and is second only to California for the amount of electricity coming from to solar power, according to the EIA.
But its electrical grid suffered a massive failure due to a winter storm in February. Part of the problem was that Texas is the only state in the continental United States not tied into the national grid, which would allow it to tap into other states’ electricity supplies at times of crisis. Some electric companies have filed for bankruptcy since then.
CEO Elon Musk made reference to the need for more electrical storage if utilities in Texas are to avoid the problems of this past winter.
“In Texas, there was a peak power demand and … because the grid lacks the ability to buffer the power, they have to shut down power. There’s no power storage,” he said in a call with investors in April. He did not mention Megapack on that call but suggested that the greater adoption of solar panels on homes and Tesla’s Powerwalls would help to provide that buffer needed for the grid in Texas and elsewhere.
This is the latest move by Tesla and Musk to focus more attention on Texas. Tesla is already building its second U.S. car factory outside of Austin and Musk formally moved his residence to Texas, he disclosed in December. Last year during a fight over COVID-19 public health restrictions that Musk opposed, he threatened he would move Tesla’s headquarters to Texas but he never followed through on that threat.
In addition his rocket company SpaceX also has a strong presence in South Texas, include a sprawling manufacturing facility, launch and landing pads, where the company is building and testing early versions of Starship, its gargantuan rocket that Musk hopes will one day be used to carry people to the moon and Mars.
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