Tesla’s Giant Battery Confounds Critics

October 2, 2018

Renew Economy:

It’s now been just over 18 months since those famous “billionaire tweets”  – between Australian software pioneer Michael Cannon-Brookes and Tesla founder Elon Musk – set in motion a process that would see South Australia install the largest lithium-ion battery in the world.

The Tesla big battery, officially known as the Hornsdale Power Reserve (it is located next to the 317MW Hornsdale wind farm) has defied skeptics, and even the experts, in almost every conceivable way.

They said it couldn’t be done. Batteries can’t be that big. They can’t be built that quick. They won’t work. Ten months on from its installation, the Tesla big battery has emphatically proven its worth – faster, quicker, more accurate, more reliable and more flexible than even the market operator thought possible.

More importantly, it has given a glimpse of the future, how a grid can be effectively managed with a very high share of wind and solar – not just faster, but also cleaner, smarter and more reliable than the dumb and ageing fossil fuel grid we now depend on, and which has become victim to endless market rorting from the industry incumbents.

So much so that it may turn out to be the best value investment that the South Australia Labor government ever made, although their political opponents may be reluctant to admit it.

As RenewEconomy revealed exclusively last Friday, the Tesla big battery is making money that promises a quick return on investment, something not thought possible when the battery was built on time and on budget.

Share listing documents from its owner, the French renewable energy developer Neoen, reveal the construction price ($A90 million), the government contract ($A4 million a year, paid in monthly instalments, for system security), and total revenue of $A14 million in the first six months of 2018.

One day out from the second anniversary of the state-wide blackout that helped trigger its construction – it is worth reminding ourselves just how skeptical everyone – from the market operator all the way through to the rusted on renewable technology deniers – was about the technology.

There’s a lesson in this, and it is that technology developments are happening faster than most people have imagined. And will continue to do so, no matter how attached conservatives and political ideologues are to the technologies of the past. As we noted at the time of the tweets, it signalled the start of the end of the fossil fuel industry.

But it also stumped the experts. First, the Tesla big battery – at 100MW/129MWh was bigger than most people thought possible.


The Australian Energy Market Operator, for instance, in the same month as the billionaire tweets, published a report which included this graph above – suggesting that the maximum size of a utility-scale lithium ion battery would be 1MW.

The then AEMO chairman Tony Marxsen (and it should be noted that this was before the arrival of CEO Audrey Zibelman) had said just months earlier that utility-scale batteries were about “10 to 20 years away” from providing meaningful contributions to the grid.

That comment, made to the COAG energy council, earned a disbelieving rebuke from then ACT environment minister Simon Corbell. “It was a remarkably conservative and pessimistic view of a technology …. and it highlights some of the challenges we face in the design of our energy markets when that sort of presentation is being made to decision makers at COAG level.”

The battery was also built more quickly than anyone thought possible.


Click to Enlarge

The Minerals Council of Australia, the primary coal lobby in the country whose staff infest many nooks and crannies in the government infrastructure, also had a bleak take on batteries, quoting this graph in a document, citing energy experts, that suggested any utility scale battery – and they couldn’t imagine one bigger than 20MWh – would take at least one year to design and two years to build.

Musk, of course, had different ideas.

He promised that it would be built within 100 days, or it would be free. The 100MW/129MWh facility came in ahead of schedule, and was online and operating by December 1 – that is six months after the billionaire tweets, and just 62 days after Tesla signed the connection agreement with the network owner and market operator.

So what has the South Australia government got for the $A4 million it has committed for the first 12 months of operation, and every year for the next 9. Certainly, the then Labor government got a huge amount of publicity, although not enough to save it from an election defeat.

But there is no doubt it has played a more significant role in grid security that anyone thought it could – from keeping the lights on, intervening in several major “contingency events”, and lowering costs by a significant amount.



6 Responses to “Tesla’s Giant Battery Confounds Critics”

  1. rhymeswithgoalie Says:

    One of the first concepts they tried to pound into our heads in engineering classes was appreciating the effects small changes can have to large systems. If you keep running out of clean bowls in your kitchen, each new bowl you add can greatly reduce the number of times you run out. In software/electronics, even a small buffering component can greatly improve performance over an unbuffered system.

    • Sir Charles Says:

      In particular when the ‘small changes’ make the system react umpteen times faster (as explained in the video).

    • lracine Says:

      I trust the concept of “Collapse of Complex Systems” was also introduced to you in your formal engineering education?

      It was in mine… many years ago.

      • Sir Charles Says:

        Nope. It wasn’t. Many societies collapsed before us, and it didn’t take much to do so.

        Here some ‘positive’ collapse => Tesla big battery claims its first major fossil fuel victim

        Elon Musk’s crusade to rid the world of fossil fuels and lead the transition to clean energy took a small but significant step forward this week, when the Australian Energy Market Operator decided to put an end to a market that has been rorted outrageously by fossil fuel generators in recent years.

        It’s a highly technical change in the complex world of managing Australia’s largest machine – the electricity grid. But it is significant because it highlights just how quickly new technologies such as batteries are changing the way grids are being managed, and making them smarter, faster, cleaner, and cheaper.

        Every little helps 😉

  2. Gingerbaker Says:

    Ok, so the utility is happy with the battery. They are making profit hand over fist with this.

    How are the ratepayers doing, though?

    Somehow, the idea of RE as a profit maker for utilities is not exactly my dream for RE, which is to provide copious amounts of GHG-free energy
    for everybody *at lowest possible cost*.

    I’m guessing that without this battery ratepayers would be paying for gas-peaker costs, which would be substantially more than what the battery-RE would cost, but this is not mentioned.

    Over the middle to long run, RE is way cheaper than FF’s. Which means they should be priced that way if we expect people to support it.

    • dumboldguy Says:

      “Somehow, the idea of RE as a profit maker for utilities is not exactly my dream for RE…..”

      Dream on, GB. Profit is the ONLY thing that motivates our modern world, not any concern for the common good. And “middle to long run”? LOL The profit must be taken NOW.

      Remember, Nature Bats Last, and she is in the warm up circle tight now swinging some HUGE bats.

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