- Energy regulator grants Tesla Energy Ventures license to provide electricity
- Reports state that Tesla looks to replicate its energy supply business in Texas
- ‘Virtual Power Plant’ could allow solar owners to feed back into the grid
The British energy regulator Ofgem has granted Tesla Energy Ventures, a unit of Tesla, a license to supply electricity to both domestic and commercial customers across the UK.
According to Reuters, the move would allow Tesla to expand its business and use its experience with a similar setup in Texas, which uses its solar energy and battery storage business to directly compete with existing energy suppliers in the UK, such as Octopus Energy, British Gas and EDF.
Tesla doesn’t provide data on the number of Powerwall Home Battery Storage Systems it has sold to UK residents, but the company stated that it had installed one million worldwide at the end of last year.
The units, which see a large battery storage system harness energy from the grid when it is at its cheapest, are not only touted to help reduce energy bills but also protect in the event of a blackout.
When paired with solar panels, users can power homes or the workplace, charge EVs and even feed excess energy back into Tesla’s “Virtual Power Plant”, lowering the cost of energy and allowing some homeowners to generate income.
Currently, Tesla’s “virtual power plant” for Powerwall owners is offered through Octopus Energy, but this would change with Ofgem’s recent ruling.
Analysis: A keen move in a time of energy uncertainty
Tesla’s EV sales have been slipping 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 with the same period last year.
That said, it still has a lot of 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 to reduce reliance on the grid and charge their vehicles more cheaply.
However, not everyone is convinced that Tesla will have such an easy time.
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” in which margins have been “squeezed to the narrowest possible extent” and in which it faces competitors who have “already invested in novel tariff offers”.
While most British households are ‘protected’ from escalating energy costs by price caps and regulated tariffs, this is due to change in July, when the next adjustment is expected and the government may be forced to step in should the conflict in the Middle East continue to force prices up.
