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.
The costs and benefits in those games are set deliberately at a point where the decision of which to build is interesting. No such restriction applies to reality. I very much doubt the relative costs of production and storage in game are at all close to what they are in real life.
> I very much doubt the relative costs of production and storage in game are at all close to what they are in real life.
The benefit is not constant either; in areas with regular outages you have a very high incentive to build energy storage (food spoils in the fridge, you cannot do laundry, your router needs power etc). Add a choice of semi-viable alternative energy sources to the mix and the decision is just as interesting as it is in games.
Real World Scenario(TM) - Northern Republica Dominicana:
* rolling blackouts (typically 8h, from 9am to 5pm; once a week); at least once a week some drunk driver takes down a pole (usually fixed in 2h)
* capped electricity bills for low income households
* no enforcement of security standards (not sure such exist at all) - so an array of old car batteries will do just fine. bonus points for investing another $50 into acid-resistant flooring.
* solar power works, but without sun tracking only for 5 to 8h/day
* wind power works, but not everywhere (jungle is a great barrier for wind)
* water pressure is so low you need a motorized pump just to flush your toilet
[disclaimer: I spent 6 months in that part of the DR in the last 2 years]
EDIT: Only 2nd hand, but from 200[345] - in an economic standoff between government and energy producer the navy sent "generator ships" that anchored near the shore of Puerto Plata and delivered electricity to the local population through cables they ran through the water.
No, and especially not the good ones (and TA / SupCom stand among the best). Good game design prioritizes gameplay over moral or political messages, IME.
It didn't take a position on the issue though - if anything it took a cynical "they're both as bad as each other" view, showing hypocrisy on both sides. (I suppose you could argue that's still a political position, but I'd say it's primarily a gameplay decision, particularly in the context of a multiplayer-oriented game, to have two more-or-less equal-and-opposite sides who both carry equal responsibility for the war).
The game was made long before the story. From what I remember (I can't remember where I read this) the story and campaign were fairly rushed afterthoughts, compared to the mechanics and multiplayer.
The story itself was iffy, but the campaign's aesthetic and maps were AMAZING.
I still remember the "defend the harbor" mission where you had one Moho mine and you had the long range destroyers showing up and desperately salvaging the long range Ranger missile ships for minerals because they were utterly nonthreatening but super valuable..
The map with a giant crevasse. The map with a ton of gunships. It was a really solid campaign. It felt like an amazing story even if the writing was simple to the point of parody just because everything was so well designed and fit perfectly together.
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'm guessing, but would imagine that the contract to build and install is priced up as above, but if they fail to get it all in in 100 days it's only the batteries themselves which are free, the rest of the job still needs to be paid for.
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.
To reinforce the point, he's talking about the guy literally standing next to him. It's got to be one of my favourite parts of our otherwise desolate, depressing political landscape in the last 5 years.
I'm glad SA is going this alone. The Federal govt is too tied up in politics to produce a functional solution based on hard data. It'd be all talk and no action and by going it alone, SA undercuts that.
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.
This project is about expanding the output of the Snowy Mountains scheme, which means greater demand on the storage capacity, not forgetting 1000km of transmission lines to get the energy to Adelaide which means the grid components that failed them last time are in exactly the same place.
The proposed expansion is $1/W capacity.
The expected price for the Neoen project is in the order of $1/W ($100M for 100MW output, 129MWh capacity)
Note that the actual price on the SA battery is not known, and there has not even been a tender out for the Snowy expansion much less accompany at work digging tunnels suddenly finding that Australian conditions are breaking their equipment more than expected :)
The expected cost overruns on the SA tender are aporoximately zero, the expected cost overruns on a large hydro project between initial estimates and completion are approximately 100% based on industry standards.
The Cultana proposal was A$500 million for 300 MW, which is more expensive per Watt but not several times. No way they could build it in 100 days though.
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.
SA certainly wasn't the first to build a desalination plant, and it appears to have been working as designed for quite a while now ("Water production to date (to end of June 2017) = approximately 138 billion litres" [1]).
I think the infamy was unearned, and mainly due to people not understanding that it was never intended to run all the time, but is insurance for a time of crisis (which we will certainly have again at some point).
Construction started in 1970 and it's been running since 1979. That's nine years, with ancient tech and the GDR's limited resources. There's no reason to believe a similar project should take nine years today in Australia.
If anything, large infrastructure projects take longer now with more stringent worker safety, environmental and engineering requirements. The replacement cost of 1960s/70s/80s hydro generating stations (particularly their dams) is much higher than what they cost initially. It's no longer acceptable, for example, to have 20 people die on your dam construction project. It's also a hell of a lot easier to forcibly relocate local people in an authoritarian country like GDR than in Australia.
For hydro projects, you can't discount the long planning phase due to the huge impact of the flooding caused. For the Markersbach plant, they had to "relocate the inhabitants of the village of Obermittweida". That kind of decision takes years to get approval for.
For a battery plant, you can plop it down pretty much anywhere, it needs minimal planning.
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.
Infrastructure is usually measured in decades though, I would have thought < 1 decade isn't good enough. Maybe its easier to maintain large scale batteries.
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...
I'd disagree with having batteries in people's homes. They produce heat, require space (which has a cost), require maintenance and an inverter, they are not fault tolerant, they'd be a massive risk to people in the event of a fire (would you like to be a fireman going into a home that had a massive Li-ion battery in?).
A better place would be at the generation source with substation batteries for smoothing out blips.
The losses will happen somewhere, and the power is coming from the wind farm anyway. Combining grid interconnect with what is already there probably makes the power engineering easier.
Also Australia is one of the most expensive places on the planet - in the urban centers. They already have space near the wind farm for very cheap. As a bonus you don't have a giant Samsung Galaxy situation near so many people.
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?
From what I've seen this is quite common with batteries -- the rated power output number is usually in the same ballpark as the storage number.
I'm no expert, but I would guess it's because most of the time the wind will be blowing somewhat, so you will rarely need peak discharge. Most of the time the batteries will be providing load smoothing and frequency regulation.
According to Tesla's website (https://www.tesla.com/powerpack) each Powerpack has 50 kW / 210kWh with a scalable inverter power ranging from 50 kVA to 625 kVA.
So they could have gotten a system with 100 MW/420 MWh
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.
This paper, in which the authors develop an argument that market structure and incentives for frequency control are driving instability, is worth a read:
The really big 2016 blackout in SA also wasn't caused by wind or solar energy, but that doesn't mean that stabilising the network isn't something that won't be required if the energy production develops more towards renewables.
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.
I wonder if that could be part of Tesla's cross-market strategy. You can put fresh batteries in cars where high energy density is really important, then as the capacity drops you reuse them in lower energy density applications like commercial power.
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.