- Energy regulator grants license to Tesla Energy Ventures to supply electricity
- Reports say that Tesla is looking to replicate its energy supply business in Texas
- ‘Virtual Power Plant’ could allow solar owners to feed back into the grid
UK energy regulator Ofgem has granted Tesla Energy Ventures, a unit of Tesla, a license to supply electricity to both residential and commercial customers across the UK.
According to Pakinomist, the move will allow Tesla to expand its business and use its experience with a similar setup in Texas, which uses its solar and battery storage business to directly compete with existing UK energy suppliers such as Octopus Energy, British Gas and EDF.
Tesla does not provide data on the number of Powerwall Home Battery Storage Systems it has sold to UK residents, but the company said it had installed one million worldwide by the end of last year.
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The devices, which see a large battery storage system harness energy from the grid when it’s cheapest, are touted to not only help reduce energy bills but also protect in the event of a power failure.
When paired with solar panels, users can power the home or workplace, charge electric cars and even feed excess energy back into Tesla’s “virtual power plant,” lowering energy costs and allowing some homeowners to generate income.
Currently, Tesla’s “virtual power station” is offered to Powerwall owners through Octopus Energy, but this would change with Ofgem’s recent ruling.
Analysis: A sharp move in a time of energy uncertainty
Tesla’s EV sales have fallen globally, with a particularly poor performance in the UK and Europe recently. According to The Society of Motor Manufacturers and Traders, Tesla’s UK sales fell 37% from 3,852 to 2,422 in February compared to the same period last year.
That said, it still has many Tesla owners, many of whom are generally more willing to embrace new technologies. Its push into the energy sector could convince an increasing number of owners to install Powerwall and solar energy to reduce dependence on the grid and charge their vehicles more cheaply.
However, not everyone is convinced that Tesla will have it that easy.
Adam Bell, former head of energy at the Department for Business, Energy and Industrial Strategy and now director of policy at consultancy Stonehaven, told City AM that Tesla is entering a “heavily regulated market” where margins have been “squeezed as tight as possible” and where it faces competitors who “have already invested in new tariff offerings”.
While most UK households are ‘protected’ from escalating energy costs by price caps and regulated tariffs, this is set to change in July, when the next adjustment is expected and the government may be forced to step in if the conflict in the Middle East continues to force prices up.
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