‘A tripling of electrical output’: Tesla’s Musk urges power sector to anticipate higher demand

“My biggest concern is there’s insufficient urgency and people just don’t understand how much electricity demand there will be,” Tesla CEO Elon Musk said Tuesday at a Pacific Gas & Electric summit.

PG&E’s emphasis on research and development comes comes as the utility focuses on the anticipated electrification of different end uses, including transportation, which it expects will result in 70% load growth over the next two decades; the transition to renewable energy, which brings challenges of intermittency and seasonal variability; and the impacts of climate change on the electrical grid, including the increased severity of California’s wildfire season.

At the summit, the utility also announced plans to roll out a new distributed energy resource management system with Schneider Electric, which it said would encourage the adoption of electric vehicles and distributed solar and storage, as well as help contribute to grid reliability.

Musk urged the power sector to take a closer look at demand projections amid the energy transition. Global energy consumption today is roughly a third electricity, a third for transport and a third for heating, he said.

“So even if you assume that electricity demand is static, in order to transition to a sustainable energy future where everything is electric and sustainably electric, we need a tripling of electrical output,” he said.

Adjusting to this pace of change is an important takeaway for PG&E, PG&E Corp. CEO Patti Poppe said, and will require a grid that is ready for the demand that electrification will bring, a regulatory construct that enables this, and an engineering team that goes from a mindset of ‘operate and maintain’ to a mindset of growth.

“And in an industry that has had limited growth over the lifetimes of the engineers who have worked for our companies, that’s a big change,” she said.

Tesla and PG&E have worked together on a virtual power plant project in Northern California. The VPP – which comprises customer-owned Tesla Powerwall battery systems in PG&E’s service area – was activated for the first time last summer, when the state’s grid was especially strained, and contributed up to 16.5 MW of solar power to the grid.

The federal government is providing financial support to utilities grappling with the energy transition. Between the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, the Department of Energy’s Loan Programs Office has over $369 billion of lending authority to help fund innovative energy technologies and the energy transition, Leslie Rich, a senior consultant with the office, said at the summit.

“The combination of tax credits, grants and low-cost loans are really powerful economic drivers to make technologies that may have not been economically attractive suddenly pencil out,” Rich said, adding that the office is now seeing a dramatic interest in its programs.