“Big Battery” making Big Bucks Down Under

February 29, 2020


Tesla’s “big battery” utility-scale Powerpack system at the Hornsdale Power Reserve in South Australia has yielded more than doubled the savings to consumers in 2019 than the year prior as it dominates fossil fuel generators on quicker demand response for the grid.

Hornsdale Power Reserve saved consumers AUD116 million ($75.78 million) in 2019, a big jump from  AUD40 million ($26.14 million) savings in 2018.

The Hornsdale Power Reserve, owned and operated by French renewable energy producer Neoen, is home to the largest lithium-ion battery energy storage system in the world with a 100 MW/129 MWh. Tesla Powerpack has been playing a significant role in grid stability since its installation in 2017, a function previously dominated by fossil fuel generators that bring energy prices high during system faults of planned maintenance.

“Hornsdale has just been the best asset for the state, and for us as well, it’s a real success story,” head of development at Neoen Australia Garth Heron said in an interview with RenewEconomy. We have shown that these kinds of systems can work. It saves consumers a lot of money, and it’s something we should be rolling out right across the market.”

The system that covers approximately one hectare of land at the Hornsdale Wind Farm provides grid stability to consumers, storing excess energy during off-peak periods and supplying the grid when renewable outputs are low. When a power plant goes down or when there is greater demand for energy, it is practically a race to meet that demand. Tesla battery-powered HPR beats power providers dependent on fossil fuel and gives consumers a win-win scenario. Consumers benefit from the lower prices of HPR and blackouts that can disrupt businesses or daily household activities are avoided. As South Australia shifts to renewable energy, fossil fuel power generators that did not have potent competition before in the market are now forced to bring their prices down back from the orbit.

A report by Australian consulting firm Aurecon analyzed the impact of the Tesla big battery at Hornsdale Power Reserve in its role in the Frequency Control and Ancillary Services (FCAS) markets. These are basically events that require quick reactions when there are sudden changes in demand or supply.

For example, when the Australian Energy Market Operator called for 35MW of FCAS in January, the Tesla big battery was quick to respond and kept prices reasonable. The prices were as low as AUD270 ($176)/MW instead of hitting AUD11,500($7,511)/MW  to AUD14,000($9,143)/MW if supplied by the fossil fuel-dependent generators. When South Australia was “islanded” because of a major outage in Victoria, the HPR was able to save consumers AUD14 million in five hours.

According to Aurecon, the biggest savings came from the raised FCAS  and amounted to more than AUD50 million ($32.65 million).

The Hornsdale Power Reserve also has a significant impact on FCAS market regulation.  Tesla battery use has pushed the average prices from AUD450 ($294)/MWh two years before the installation of HPR to just over AUD20 ($13)/MWH. With lower prices, battery-generated power practically brought fossil fuel power plants, that ruled the region like cartels, to their knees.


2 Responses to ““Big Battery” making Big Bucks Down Under”

  1. Reblogged this on The Most Revolutionary Act and commented:
    Tesla Powerpack has been playing a significant role in grid stability since its installation in 2017, a function previously dominated by fossil fuel generators that jack up energy prices high during system faults caused by planned maintenance.

  2. rhymeswithgoalie Says:

    I remember in one of my first engineering that adding a small bit of capacity gives much more resilience to a system than a human finds intuitive.

    If you have 10 dishes and you find you run out of clean ones “all the time”, just adding one or two more dishes reduces the number of times you run out by more than people expect. It’s a matter of understanding probability tails.

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