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How Tesla Will Help Jackson Family Wines Save $2M in Energy Costs

The Kendall-Jackson wine estate and gardens. | Image credit: Flickr

Sonoma County, Calif.-based Jackson Family Wines is among the first winemakers to install Tesla Energy’s new energy-storage technology and currently one of Tesla’s largest installations: An early strategic collaborator in the development of the technology, JFW already has 21 Tesla stationary storage systems in place at its Kendall-Jackson winery and others. Along with the production generated from their 6.5MW of onsite solar arrays, the family-owned company expects to save approximately $2 million next year on electricity costs, reducing its electricity bill by nearly 40 percent.

We spoke with Julien Gervreau, JFW’s Senior Sustainability Manager, to understand the impacts of this initiative and the potential for renewables and energy storage in the wine industry.

What led to this partnership with Tesla?

We participate in PG&E’s Demand Response program, which offers incentives to businesses who reduce the energy use of their facilities during times of peak demand, and we work with a third-party provider, EnerNOC Inc., to administer the program. EnerNOC partnered with Tesla to supply batteries to its commercial and industrial customers. When Tesla was rolling out their energy storage offering, we got in touch through our relationship with EnerNOC. Tesla was looking to pilot their storage offering in different industries to understand how the batteries would work for companies and organizations in different industries/profiles. We were already exploring stationary storage options, and when the opportunity to work with Tesla came up, we thought they were a great fit for us as a project partner since they have a shared commitment to sustainability and innovation. We knew that given Tesla's success on developing the greatest car on the planet according to all of the critics, they would be a great team to collaborate with on stationary storage.

Where do you store the batteries?

We have installed 21 battery systems across 6 wineries throughout California, including Kendall-Jackson wineries in Sonoma and Napa counties, La Crema and Stonestreet wineries in Sonoma County and Carmel Road in Monterey County. These systems have the capacity to store a combined 4.2 MW of energy, which will allow us to mitigate the costly demand spikes that occur during our most energy-intensive practices in wine production such as refrigeration & cooling, compressed air, lighting, and process water treatment. Right now, they are not very visible to our guests, as the batteries need to be located near to the electric switch gear so they are not in the most scenic locations in our wineries, but we will be working with Tesla to potentially try to showcase these batteries by putting residential batteries in our tasting rooms to give people a sense of what we're doing.

What have your observations on the batteries been so far?

Our batteries were energized in January and February, and we are still learning how they function. Tesla has a proprietary algorithm that they are using to track and analyze our loads and they handle all the maintenance. They are ultimately working to develop and fine-tune the algorithm so that it will respond accordingly the way it needs to. We've seen a little bit of savings so far in the first couple of months already, and since we're entering the summer months of peak energy rates from May through October, that's when the potential for savings generation is the highest.

The biggest cost savings opportunity for us is in peak shaving – a technique used to smooth out spikes in electrical power consumption during periods of maximum demand on the utility, thus saving substantial amounts of money due to peaking charges. Essentially, if we can reduce demands at a winery from 700 kW to 500 kW, especially in summer, each kW of demand generated is about $30. So for a 200 kW spike, that is $6,000/month you can theoretically shave off. That's the financial case for these batteries. From the off-the-grid, sustainability perspective of the batteries, we are also in the process of building out what will be the wine industry's largest solar generation portfolio. It will be about 6.5 MW of total generation capacity and all of our wineries that have batteries also have solar systems, so we are going to explore the interplay between storage and solar. Then we can really start looking at how we can reshape the way society uses energy. What Tesla was talking about when launching was how storage, solar and onsite generation tie together, and we are very well positioned to be pushing that conversation forward.

How do the batteries fit into your broader sustainability goals?

We are trying to generate 50 percent of our power from renewable sources by 2020; our ability to use these batteries to store excess solar energy will be critical in that component. Right now, batteries contribute to about 10 percent reduction in our monthly energy bills at the wineries that have the batteries installed. Going off the grid is something that we would like to explore, but it's going to be dependent on how these batteries operate and how we can tie them together with solar. I think going off the grid is where energy is going and that's why this is something we are very much looking into and excited to explore more. This technology is a total game-changer, and it will be changing how we think about energy and how we think about storing energy. The technology is opening the door for a lot more energy independence, which is ultimately a good thing, and it's very exciting to be a part of.

When will you profit from this project?

The good news is we started profiting right out of the gate; our investment in this project was minimal. Tesla underwrote the cost of the batteries; we had to pay some applications fees to PG&E but they were refunded upon interconnection for our batteries. Ultimately, with Tesla we do a 50 percent savings share - for every dollar Tesla saves us, we share 50-50. It is expected that the Tesla battery systems will reduce electricity costs across the aforementioned JFW wineries by nearly 10 percent. This will help the company save hundreds of thousands of dollars annually, achieve our sustainability goals, and continue fostering a culture of innovation into every aspect of the business. Solar combined with energy storage is expected to provide JFW with a total savings of approximately $2M next year on electricity costs, reducing our electricity bill by nearly 40 percent.

Tamay joined the team as Content Development Manager and became Sustainability Projects Manager when she saw the impact she can make through helping Sustainable Brands Corporate Member Network. She is a risk and strategy professional with international experience in… [Read more about Tamay Kiper]

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