Tesla sold a financial product. The government needed to cover some of the risk of when power lines go down, or if something goes wrong in another part of the network. It needs to cover this risk quickly for political reasons.
The chance of another similar storm knocking out the power lines again, which now have bigger maintenance crews, is very small. But if there is another blackout and they didn't do anything? They'd be in big trouble with the newspapers.
So Tesla really sold a risk product. Since SA could have spent the money on more generation. But not all people understand that.
The 100MW stage of that wind farm cost $250 million, and took some years to reach agreement, and some years to build. By promising to build the battery quicker, they have covered that risk during the time they need it.
They could have installed another wind farm the same size in a different part of the state in order to reduce the risk, and fill up the valleys of power generation. That has been proven to work too, and the benefit is you have more power generation in the peaks.
The cost of the blackout was estimated to have cost $367 million to business. 12% of the businesses had backup power generators themselves, and about a third of the businesses had bought insurance for such situations. Life critical systems are required to have independent backup power.
By the time it's built there will probably be a similar amount of solar power installed as the battery (by current rates of installation). There's 2,034 MW of industrial solar being constructed in Australia for 2017. This doesn't include stuff going onto roofs of houses, of which there are millions of houses already covered and more being done. 5KW solar installed in Australia can be done for $5,000AUD or less for a 5KW system. That's $100 million AUD for 100MW on 20,000 homes.
There's also a lead smelter which is being upgraded, so it will have modern equipment which lets it use power more dynamically... effectively making it a battery. It can take in power, or not, as it needs. They can also shut down their power hungry desalination plant if needed (which they don't really need when there is not a drought).
So now they have a backup battery, a backup gas power plant, and backup power lines to another state, more efficient industrial power users, and hundreds of thousands of small independent solar power generators.
It's not just insurance if power goes down. It'll knock the edges off the price-peaks, which SA suffers badly from.
Gas fired power stations don't fire up until they can get the maximum price possible, and often try to drive the price higher by stopping producing power. SA is very vulnerable to that because there is no backstop of coal prices. OTOH, the minimum price of wind power and solar is much lower.
These batteries will kill the peaking gas generator game.
>They could have installed another wind farm the same size in a different part of the state in order to reduce the risk.
From a macro level, wind and solar makes the most logical sense when twinned with battery storage, the nature of the power they produce and to a lesser extend how users consume that power is unpredictable, so the battery is used for peak shaving the demand and supply.
Whilst not overtly disagreeing with any of your major points, the alternative to this 'financial product' as you term this infrastructure investment (an asset on the ground is hardly a financial product, because a financial product is worth nothing once it's term ends, whereas even when the cells can hold no more charge they're going to be worth a residual in recycling) is an alternative where we are actually building more infrastructure - gas or coal.
This one arrangement has the potential to totally change the completely derailed energy policy discussion in australia, which continues to default to a coal or gas fired immediacy and future, out of fear over rationality.
Anyone here played the real time strategy game Total Annihilation or its spiritual successor Supreme Commander? I remember playing with a friend around 1998 and he told me off for using energy storage as opposed to just collecting/producing more energy sans storage. His argument was that my economy should never be at the point that I'm saving energy for a rainy day - I should be spending as I collect/produce so that my potential is always maximised. I told him I need a buffer for when I'm spending more than I'm producing or if I lose infrastructure in battle.
Either way, we played each other over LAN one day and sure enough he took out a few of my nuclear plants, but I had enough energy stored to keep bombarding his base with artillery and eventually struck his commander despite being in the negative for energy production vs consumption. I won. He changed his opinion after that.
South Australia has a population of ~1.7 million. I'm reading this article as:
* Battery ($140 million)
* Gas Power Plant ($360 million)
These costs are noticeable but not unreasonable.
SA will hopefully turn a nominal profit, although the principle of 'if it were the profitable option, private enterprise would have done it' suggests this will be an economic drag at least in the short term.
I suspect this move is a knee-jerk reaction to the power outage in 2016; so I am very interested in what the long term impacts of this are. I'm adding this to my watch list along with the German Energiewende to see where it is in 2020. It is a very interesting tour-of-force by Tesla and hopefully we discover positive things about large-scale lithium deployments.
SA's population might be relatively low but at the moment they seem to be having a manufacturing slump with the pullout of major car companies so from that perspective there should be enough labor to gather there.
I'd be interested to know more about the politics behind this decision. The Federal government (generally conservative and anti-renewables) was pushing for pumped hydro energy storage, which would have cost several times as much and taken years to build (and made renewable energy look worse for longer).
This looks very much like the state Labor government giving the federal government the finger.
As someone living in Australia, I think the pumped-hydro is nothing more than a thought bubble introduced to take the heat out of renewables debate, which the government was loosing.
They announced it as a certainty, even though the design was nothing more than the one page press announcement, the project feasibility study yet to started and no construction expected for many years, if it indeed it is feasible.
The government is pretty much 100% anti-renewables with their pet love being coal with their catchcry being Coal is good for humanity.
Currently they are considering a $1B government loan to an Indian coal mining company, only because no bank will lend them the money.
My take on this SA announcement is it might end up being a big blow for the government.
If it works out as designed and fixes some of the issues in the SA electricity grid, it be egg on the face of the government, since they insist the SA grid is a disaster only because it has such a high reliance on renewables and is missing a coal powered generator.
An inevitable campaign based on electricity prices is easily the biggest risk to the state government. The state opposition hasn't really built a viable identity in recent years, but many people are quickly incensed about rising bills.
For Labor, pitching that they are standing up to the Federal government and moving forward regardless, is a reasonable strategy against that.
Based on other comments here it seems like SA sees large price spikes that this should smooth out, so I suppose it's possible it will pay for itself not just in a more stable energy utility but also in real Dollarydoos.
We have a long history here in SA of being the first people in the world to do stuff, and it nearly never (I mean this literally) works out well.
For once, I'd love it if our ever changing State Government would just spend its limited budget on tried and tested solutions rather than pissing money up the wall on things that may or may not work.
Our wind-farms are nothing special. We get much less power from them than most places in Europe. Even the eviro-nuts (/sarcasm) in Texas get up to 23% of their power from wind (https://www.scientificamerican.com/article/the-rise-of-wind-...). SA gets around 33%.
Pretty much all of SA's problems are because of geography. We don't have many people (~1.5M, almost all of whom are in Adelaide) and we are a long, long way from anywhere else. That makes taking part in the national market difficult.
There aren't many tried and tested solutions for grid energy storage.
Pumped hydro is probably the best known and longest used. It's reliable and low risk. It's only practical if geography includes two adjacent large bodies of water with significant altitude differential. This isn't exactly rare but it's unusual, so pumped hydro isn't often a solution.
Other than p.h.? Thermal (molten salt)? flywheels? These are rare and early in development. Each has its own reliability issues.
If grid-scale storage is needed, it seems like Li batteries are the best understood, lowest technical risk option for now.
Such information is more than likely commercially sensitive. However, given the large number of cells, a charge controller can optimise charges to ensure optimum cell use.
Bit like wear levelling with SSD drives.
Your phone probably has an erratic charge discharge cycle.
Most Li-ion batteries have 400-1200 duty cycle. That should give this project a 3 year cycle a least.
Do you need multiple batteries though to really stabilise the flow? I.e. these look like they will be right at the point of power generation, guessing that the bulk of inhabitants will actually be in Adelaide, why not put the batteries there after you have suffered the lossiness of transmission? Directly in people's homes would also probably be more effective...
Didn't they announce last year that the largest battery manufacturing plant was being built near Reno, NV as part of the Gigafactory. Now all of a sudden this one in Australia, what's the deal?
Isn't 129MWh of capacity a bit low for 100MW of peak discharge? That would provide 77 minutes of power at peak discharge. Does anyone have any insight into the rationale for this capacity?
I should qualify why: The South Australian power network, due to its increasing reliance on Wind and Solar, struggles with fluctuations in the network. The battery will aid to stabilise the grid in peak demand times.
Does anyone know if large scale capacitors are being investigated for this sort of application (or in home storage)? Strikes me as more appropriate than batteries; don't really need to store that energy for months, but rather hours or days. I know that Tesla utilises economies of scale, but still curious why I've never heard of large scale capacitors even being researched.
Unfortunately no word on durability and maintenance guarantees. What happens after a few years when batteries lose most of their capacity? Who is going to take care of recycling? I'm honestly curious about details because as opposed to lead-acid batteries industry, there is no profitable or existing li-ion recycling market.
> What happens after a few years when batteries lose most of their capacity?
That's rather pessimistic isn't it? In their cars, which is arguably a less stable environment, they don't seem to fall much beyond 70-80% capacity. The lose capacity quickly at first, but then it stabilizes. I haven't heard anything that implies that a lithium-ion battery in a stable, temperature environment will lose "most" of their capacity, i.e. over 50%.
And unlike cars, it's not like the value of the battery becomes so much less when they lose capacity. There's plenty of space, that's not the problem. They could just add a few extra batteries if they want to keep the capacity (more likely they will add more batteries other places).
Of course battery capacity loss will be part of the contract. Tesla will probably guarantee a certain capacity after a certain time, and they will tell the customer how much loss they can expect. It will all be taken into account when calculating the profitability and life-time of the system.
Why would they report this in the media? It's not something most people is interested in. It's the kind of thing you find in datasheets for the product.
[+] [-] renesd|8 years ago|reply
The chance of another similar storm knocking out the power lines again, which now have bigger maintenance crews, is very small. But if there is another blackout and they didn't do anything? They'd be in big trouble with the newspapers.
So Tesla really sold a risk product. Since SA could have spent the money on more generation. But not all people understand that.
The 100MW stage of that wind farm cost $250 million, and took some years to reach agreement, and some years to build. By promising to build the battery quicker, they have covered that risk during the time they need it.
They could have installed another wind farm the same size in a different part of the state in order to reduce the risk, and fill up the valleys of power generation. That has been proven to work too, and the benefit is you have more power generation in the peaks.
The cost of the blackout was estimated to have cost $367 million to business. 12% of the businesses had backup power generators themselves, and about a third of the businesses had bought insurance for such situations. Life critical systems are required to have independent backup power.
By the time it's built there will probably be a similar amount of solar power installed as the battery (by current rates of installation). There's 2,034 MW of industrial solar being constructed in Australia for 2017. This doesn't include stuff going onto roofs of houses, of which there are millions of houses already covered and more being done. 5KW solar installed in Australia can be done for $5,000AUD or less for a 5KW system. That's $100 million AUD for 100MW on 20,000 homes.
There's also a lead smelter which is being upgraded, so it will have modern equipment which lets it use power more dynamically... effectively making it a battery. It can take in power, or not, as it needs. They can also shut down their power hungry desalination plant if needed (which they don't really need when there is not a drought).
So now they have a backup battery, a backup gas power plant, and backup power lines to another state, more efficient industrial power users, and hundreds of thousands of small independent solar power generators.
They've definitely covered their arses.
[+] [-] nl|8 years ago|reply
Gas fired power stations don't fire up until they can get the maximum price possible, and often try to drive the price higher by stopping producing power. SA is very vulnerable to that because there is no backstop of coal prices. OTOH, the minimum price of wind power and solar is much lower.
These batteries will kill the peaking gas generator game.
[+] [-] drcross|8 years ago|reply
From a macro level, wind and solar makes the most logical sense when twinned with battery storage, the nature of the power they produce and to a lesser extend how users consume that power is unpredictable, so the battery is used for peak shaving the demand and supply.
[+] [-] robbiep|8 years ago|reply
This one arrangement has the potential to totally change the completely derailed energy policy discussion in australia, which continues to default to a coal or gas fired immediacy and future, out of fear over rationality.
We shall see either way
[+] [-] icanhackit|8 years ago|reply
Either way, we played each other over LAN one day and sure enough he took out a few of my nuclear plants, but I had enough energy stored to keep bombarding his base with artillery and eventually struck his commander despite being in the negative for energy production vs consumption. I won. He changed his opinion after that.
It's good to save for that rainy day.
[+] [-] roenxi|8 years ago|reply
* Battery ($140 million)
* Gas Power Plant ($360 million)
These costs are noticeable but not unreasonable.
SA will hopefully turn a nominal profit, although the principle of 'if it were the profitable option, private enterprise would have done it' suggests this will be an economic drag at least in the short term.
I suspect this move is a knee-jerk reaction to the power outage in 2016; so I am very interested in what the long term impacts of this are. I'm adding this to my watch list along with the German Energiewende to see where it is in 2020. It is a very interesting tour-of-force by Tesla and hopefully we discover positive things about large-scale lithium deployments.
[+] [-] shard972|8 years ago|reply
[+] [-] senectus1|8 years ago|reply
Cause TFA says if he doesnt get it done in 100 days it'll cost him 50 mil
>But the promise could leave Mr Musk significantly out of pocket if he fails to deliver to deadline.
>He estimated it would cost him "probably $50 million or more" if the 100 days lapse without the battery installed.
[+] [-] perilunar|8 years ago|reply
This looks very much like the state Labor government giving the federal government the finger.
[+] [-] jussij|8 years ago|reply
They announced it as a certainty, even though the design was nothing more than the one page press announcement, the project feasibility study yet to started and no construction expected for many years, if it indeed it is feasible.
The government is pretty much 100% anti-renewables with their pet love being coal with their catchcry being Coal is good for humanity.
Currently they are considering a $1B government loan to an Indian coal mining company, only because no bank will lend them the money.
My take on this SA announcement is it might end up being a big blow for the government.
If it works out as designed and fixes some of the issues in the SA electricity grid, it be egg on the face of the government, since they insist the SA grid is a disaster only because it has such a high reliance on renewables and is missing a coal powered generator.
[+] [-] jackgolding|8 years ago|reply
[+] [-] prawn|8 years ago|reply
An inevitable campaign based on electricity prices is easily the biggest risk to the state government. The state opposition hasn't really built a viable identity in recent years, but many people are quickly incensed about rising bills.
For Labor, pitching that they are standing up to the Federal government and moving forward regardless, is a reasonable strategy against that.
[+] [-] stirlo|8 years ago|reply
[+] [-] SEJeff|8 years ago|reply
[+] [-] xupybd|8 years ago|reply
[+] [-] syncsynchalt|8 years ago|reply
[+] [-] synicalx|8 years ago|reply
For once, I'd love it if our ever changing State Government would just spend its limited budget on tried and tested solutions rather than pissing money up the wall on things that may or may not work.
[+] [-] nl|8 years ago|reply
Batteries are well proven technology now. Here's the Tesla one in California: https://arstechnica.com/business/2017/01/a-look-at-the-new-b.... Batteries are very much the tried and tested solution now. This is just a bigger set.
Our wind-farms are nothing special. We get much less power from them than most places in Europe. Even the eviro-nuts (/sarcasm) in Texas get up to 23% of their power from wind (https://www.scientificamerican.com/article/the-rise-of-wind-...). SA gets around 33%.
Pretty much all of SA's problems are because of geography. We don't have many people (~1.5M, almost all of whom are in Adelaide) and we are a long, long way from anywhere else. That makes taking part in the national market difficult.
[+] [-] pascalo|8 years ago|reply
[+] [-] daveytea|8 years ago|reply
Things that were first done/discovered in SA: - military tank - sunscreen - hills hoist - early version of wifi (controversially)
References: http://www.abc.net.au/local/stories/2014/07/23/4051703.htm http://insidesouthaustralia.com.au/5-amazing-south-australia...
[+] [-] ridgeguy|8 years ago|reply
Pumped hydro is probably the best known and longest used. It's reliable and low risk. It's only practical if geography includes two adjacent large bodies of water with significant altitude differential. This isn't exactly rare but it's unusual, so pumped hydro isn't often a solution.
Other than p.h.? Thermal (molten salt)? flywheels? These are rare and early in development. Each has its own reliability issues.
If grid-scale storage is needed, it seems like Li batteries are the best understood, lowest technical risk option for now.
[+] [-] perilunar|8 years ago|reply
[+] [-] Lxr|8 years ago|reply
[+] [-] dao-|8 years ago|reply
https://en.wikipedia.org/wiki/Markersbach_Pumped_Storage_Pow...
[+] [-] kalleboo|8 years ago|reply
[+] [-] rb808|8 years ago|reply
If its anything like my Nexus 6p it'll need replacing within a year.
[+] [-] nextweek2|8 years ago|reply
Bit like wear levelling with SSD drives.
Your phone probably has an erratic charge discharge cycle.
Most Li-ion batteries have 400-1200 duty cycle. That should give this project a 3 year cycle a least.
[+] [-] pongogogo|8 years ago|reply
[+] [-] suyash|8 years ago|reply
[+] [-] manicdee|8 years ago|reply
[+] [-] thomasfoster96|8 years ago|reply
[+] [-] tacticus|8 years ago|reply
[+] [-] bquinlan|8 years ago|reply
[+] [-] pascalo|8 years ago|reply
[+] [-] pascalo|8 years ago|reply
[+] [-] neillyons|8 years ago|reply
[+] [-] askvictor|8 years ago|reply
[+] [-] gluczywo|8 years ago|reply
[+] [-] audunw|8 years ago|reply
That's rather pessimistic isn't it? In their cars, which is arguably a less stable environment, they don't seem to fall much beyond 70-80% capacity. The lose capacity quickly at first, but then it stabilizes. I haven't heard anything that implies that a lithium-ion battery in a stable, temperature environment will lose "most" of their capacity, i.e. over 50%.
And unlike cars, it's not like the value of the battery becomes so much less when they lose capacity. There's plenty of space, that's not the problem. They could just add a few extra batteries if they want to keep the capacity (more likely they will add more batteries other places).
Of course battery capacity loss will be part of the contract. Tesla will probably guarantee a certain capacity after a certain time, and they will tell the customer how much loss they can expect. It will all be taken into account when calculating the profitability and life-time of the system.
Why would they report this in the media? It's not something most people is interested in. It's the kind of thing you find in datasheets for the product.