Elon Musk is getting into the Texas power market, with previously unrevealed construction of a gigantic battery connected to an ailing electric grid that nearly collapsed last month. The move marks Tesla Inc.’s first major foray into the epicenter of the U.S. energy economy.
A Tesla subsidiary registered as Gambit Energy Storage LLC is quietly building a more than 100 megawatt energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston. A battery that size could power about 20,000 homes on a hot summer day. Workers at the site kept equipment under cover and discouraged onlookers, but a Tesla logo could be seen on a worker’s hard hat and public documents helped confirm the company’s role.
Property records on file with Brazoria County show Gambit shares the same address as a Tesla facility near the company’s auto plant in Fremont, California. A filing with the U.S. Securities and Exchange Commission lists Gambit as a Tesla subsidiary. Executives from Tesla did not respond to multiple requests for comment.
Shares of Tesla rose 1.1% Monday to $604.41 as of 10:11 a.m. in New York. The stock is down about 14% this year, following four days of declines at the end of last week.
As winter storms pummeled Texas in February and left millions without power for days, Musk took to Twitter to mock the Electric Reliability Council of Texas, or Ercot, the nonprofit group that manages the flow of electric power to more than 26 million customers. “Not earning that R,” he wrote. Musk, 49, recently moved to Texas and his various companies are expanding operations in the state.
The battery-storage system being built by Tesla’s Gambit subsidiary is registered with Ercot. Warren Lasher, senior director of system planning at Ercot, said the project has a proposed commercial operation date of June 1. The site is adjacent to a Texas-New Mexico Power substation.
While Tesla is known for its sleek, battery-powered electric vehicles, it’s always been more than a car company: its official mission is to “accelerate the world’s transition to sustainable energy.” Utility-scale batteries are needed to store the electricity produced by wind and solar, but they can also become lucrative opportunities. By storing excess electricity when prices and demand are low, battery owners can sell it back to the grid when prices are high.
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SOURCE: Bloomberg, Dana Hull and Naureen S Malik