Lifestyle, Living, Sustainability, Tech

Tesla is creating a Virtual Power Plant for emergencies

Alongside Pacific Gas & Electric Company (PG&E).

words by: Sahar Khraibani
Jul 6, 2022

A new scheme that rewards qualifying Powerwall owners for sending extra electricity to the grid when it is at risk of blackouts was recently introduced by Tesla and California utility PG&E. Together, the Powerwalls form a “virtual power plant” that can assist in maintaining electricity during emergencies or power outages.


By doing this, Tesla is creating what it dubs “the largest distributed battery in the world.” Powerwall users who join the program will be able to earn $2 USD for each kilowatt-hour of power they supply into the grid during any emergencies when the area experiences power outages or blackouts.


In their announcement, Tesla shares the following benefits of participation:

  • Stabilize California’s Grid: The extra capacity your Powerwall provides could help avoid or reduce blackouts in a severe emergency. This way, Powerwall can keep the lights on for both you and your community.
  • Clean the Grid: Tesla will dispatch your Powerwall when the grid is in critical need of additional power. That is when the least efficient generators would typically come online.
  • Unite as a Tesla Community: Team up with other Powerwall owners who are accelerating the world’s transition to sustainable energy and help form the largest distributed battery in the world – potentially over 50,000 Powerwalls. As part of the VPP, your Powerwall will have an outsized positive impact on the grid over traditional demand response programs.
  • Maintain Your Energy Security: Powerwall will discharge during VPP events but won’t discharge below your Backup Reserve. Adjust your Backup Reserve to control your contribution while maintaining backup energy for outages.
  • Earn Compensation: Through the ELRP pilot, you will receive $2 for every additional kWh your Powerwall provides during an event. You don’t have to change your energy usage behavior to participate.


All you need to join the virtual power plant is a Powerwall and the Tesla app. Through the latter, you can enroll in the Emergency Load Reduction Program option and begin receiving warnings when aid is required.


Tesla, of course, wouldn’t abandon your home and leave you without electricity either: You’ll be able to set a “backup reserve level” on your Powerwall, and the power you put into the grid won’t jeopardize that backup level.


Last July, Tesla launched a similar beta program with PG&E and a few other utilities, but that was a free program with no rewards. Now that there is a financial incentive to encourage participation, the initiative may expand and become a sizable source of clean backup energy in California.


In case you missed it, ​​Tesla’s Optimus production is supposedly beginning in 2023.


Photo via Tesla