Tesla won’t free up use of its batteries, leaving owners unable to reap full benefits

Australian owners of Tesla batteries could miss out on lucrative revenue streams because the US energy giant restricts the devices’ ability to interact locally with third parties and authorities continue to dither over setting and enforcing standards.

An increasing number of products from air conditioners to hot water heaters and solar panels can be controlled remotely, and consumers can sign deals rewarding them for altering power usage during peak load periods, including supplying electricity to grid.

Tesla is required in many US states to enable so-called interoperability of batteries. However, the company disables that capability in its main storage product – the $15,000 Powerwall 2 battery – it sells to Australians, industry participants say.

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They say federal and state governments should impose US mandates on Tesla and other battery suppliers according to an international standard – IEEE1547-2018 Clause 10 – to maximise future benefits to consumers and the grid, and firms restricting utility should be excluded from rebates, such as New South Wales’ subsidy program of as much as $2,400 a battery.

“Batteries that do not offer their full performance via an open standards-based, non-cloud control port are too easily locked into a particular business model to the detriment of their owners,” said Dean Spaccavento, the chief executive of Reposit Power.

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The battery issue is only partly mitigated by third-party providers offering certain services for so-called virtual power plants that allow some outside involvement – but Tesla calls the key shots here too.

“Tesla battery owners who are part of virtual power plants have their batteries controlled by Tesla on behalf of third parties like Amber. Third parties are subject to Tesla’s commercial and operational conditions and they are not always in the interests of the owner of the battery,” Spaccavento added.

Governments should specify and enforce a local control interface for any battery installed as part of their rebate programs, he said. Spaccavento said his firm does not bundle Tesla batteries into its services because of the US company’s stance.

Guardian Australia has sought comment from Tesla.

The Australian Energy Market Operator highlighted the potential for coordinated consumer energy resource (CER) storage in its grid blueprint released last week .

From about 200 megawatts now, such storage will rise to 37 gigawatts by 2049-50, or two-thirds of the entire storage in the national electricity market. Without “effective orchestration of consumer batteries”, the grid would need about $4.1bn in extra investment, Aemo’s integrated system plan said.

“As all batteries [Tesla] sell here are connected to their cloud, it is literally a remote software command that could switch the capability back on,” an industry veteran said.

If the battery only has “cloud control”, devices that could be orchestrated will instead “fight each other” to the financial detriment of its owners and nullify its potential benefits for grid stability and other services, the veteran said. Authorities have had eight years to come up with appropriate standards.

A spokesperson for Aemo said CER coordination and control was “critical to a least-cost transition”, and “can only be achieved with effective interoperability” of such assets as home batteries.

There is no requirement in Australia for Tesla to allow local third-party access, like in the US, they said. “A number of processes” were under way to review technical standards, access issues and consumer protections, they added.

A spokesperson for the Australian Competition and Consumer Commission said it was up to governments to impose interoperability or access obligations on battery suppliers.

“Any restrictions on access or product interoperability would only raise concerns under the Competition and Consumer Act where those restrictions lead to a substantially lessening of competition,” they said.

Related: Has Elon Musk driven Tesla off track?

Richie Merzian, the acting chief executive of the Smart Energy Council, said “consumer energy in Australia has long been viewed by energy retailers as a problem to be managed rather than an opportunity to be embraced”.

“As a result, Australia has a huge take-up of consumer energy products but very little thought, regulation or resourcing has come with this,” Merzian said. “A gradual phase-in of interoperability capabilities into the Australian product set will mean huge new benefits that people could only have dreamed of just a few years ago.”

Con Hristodoulidis, a policy director at Clean Energy Council, noted standards for the interoperability of consumer resources would hinge on a final report from the federal government.

“It is important that households are empowered to make the right choice of home batteries and have greater flexibility to select service providers without experiencing higher software and hardware costs in so doing,” he said.

The federal energy minister, Chris Bowen, said: “Consumer energy resources, including things like home batteries, will play an important role in Australia’s energy transformation towards 82% renewables by 2030.”

He said state and energy ministers were committed to reforming the National Consumer Energy Resources Roadmap to allow consumers to export more solar power to the grid and deliver nationally consistent standards in key areas, including vehicle to grid technologies.

A spokesperson for NSW’s energy department said it was engaging with industry stakeholders, including battery manufacturers, and “continuing to finalise the details of the peak demand reduction scheme to ensure it delivers the best possible outcomes for all participants”.

• This story was amended on 7 July 2024 to reflect that industry participants are calling for a mandate on battery suppliers according to IEEE1547-2018 Clause 10, an international standard, rather than the AS4777 connection standard.