Tesla’s Powerpack offers warehouses energy flexibility

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Use of Tesla's technology in commercial buildings can offset or eliminate electricity costs

Warehouse facilities are a key component for logistic operations and managing the warehouse efficiently can have a noticeable impact on the bottom line. Energy requirements represent the major costs of warehouse operations, particularly those with the need for refrigeration. HVAC, lighting, and remote operation controls also contribute significantly to this cost.

There are indeed technologies that are helping increase the efficiencies of these components such as temperature control and sensor lighting, but there is a new option available that might provide a breakthrough in efficiency, and it comes Tesla.

In the U.S., there are over 5 million commercial buildings and industrial facilities with combined annual energy costs of approximately $200 billion. According to the U.S. Energy Information Administration (EIA), 48% of warehouse energy consumption is electricity. Therefore, adopting a self-sufficient solution to energy requirements can offer material savings.

Typically, non-refrigerated warehouses use on average of 6.1 kilowatt-hours (KWh) of electricity per square foot annually. Government data tells us that the average size of a U.S. warehouse is 16,400 square foot. The EIA’s most recent data from June 2017 shows that the commercial cost of electricity is 11 cents per KWh. Multiplying the components results in an average annual cost of electricity of approximately $12,005. This figure could triple for refrigerated warehouses.

Relying on the grid for electricity has one major downfall, what happens if there is a blackout? According to a report by Allianz Global Corporate & Specialty, power interruptions are in the top ten causes of business-related losses. The economic losses are material, from machinery breakdown to disruptions in the supply chain process.

Providing an off-the-grid solution can effectively rule out energy shortages and as a result, threaten business as usual for traditional utilities.

Tesla’s Powerpack offers commercial consumers greater control and works in parallel with the electricity grid. As described on Tesla’s website, benefits of the Powerpack include an emergency backup in the event of grid interruption and a demand response mechanism whereby the Powerpack can discharge electricity in response to alleviate the peaks in grid system load.

What makes the Powerpack revolutionary is the ability to shift the energy load through renewable integration. In simple terms, it shifts energy consumption away from the grid to applications such as on-site solar. This innovation essentially allows commercial consumers to become partly or completely self-reliant and effectively cut the running cost of electricity production and deployment close to zero.

Tesla Powerpacks applications are far-reaching, from islands to breweries, to shopping malls and community colleges and even residential developments.

Tesla installed a 7-megawatt Powerpack system at Irvine Ranch to save the water utility $500,000 annually. A dairy farm in Connecticut has installed a combination of 30 Tesla Powerpacks and 15,000 solar panels that produce enough energy to run 725 American homes. The College of Marin in California uses a 3.2 megawatt-hour Powerpack system that stores energy to save up to $150,000 annually in energy costs for the college.

There is nothing stopping this application from being applied in the logistic warehouse space should companies be willing to make the investment. The innovative combination of battery Powerpacks and solar panels can save a commercial business a significant amount of capital on energy costs.

A final consideration is the ability to reserve energy, known as capacity reserve. Energy storage allows any excess energy to be effectively saved for future applications. Demand peaks can be countered by the deployment of energy stored in the Powerpacks.

A surplus of energy creates revenue potential.

When a Powerpack system converts more energy than is required for a business’ needs, it creates a surplus. It provides the business the option of transferring power or energy capacity back to the grid or to serve other customer energy demands, hence creating additional revenue that can offset other business expenses.

A company that estimates an energy surplus is IM Properties - a property manager in the United Kingdom that has announced it is installing a Tesla Powerpack and solar panels at a 69,000 sq. ft. development and from initial analysis it could result in a net revenue of $5,600 to the tenant.

The benefits from an off-grid system powered by battery packs and solar are substantial. First in terms of the environment, but also the financial incentive logistics companies could profit from.

Tesla is at the forefront of the technological innovation and looking at the bigger picture, the capability of this technology expands far beyond just company warehouses. Commercial buildings, schools, government offices, housing developments all offer huge potential, and with industry and government advocating for greener policies, it makes both environmental and economic sense to transition.