Tesla’s battery has saved South Australia so much money

Tesla’s South Australian battery project, described as the world’s largest lithium-ion storage system, has already saved the state an enormous amount of money. The Hornsdale project, completed last November in 54 days, has reduced costs associated with stabilizing the energy grid by nearly AU$40 million.

The 100-megawatt project has quickly proven its worth in its first year of operations. French energy firm Neoen, which manages the battery, asked consultancy firm Aurecon to evaluate the project. The team found that the battery has eliminated the need for 35 megawatts minimum of local frequency control ancillary service (FCAS). These services are normally used to regulate the power in a grid, ensuring a dependable stream of electricity. The battery, however, provides a good quality regulation FCAS on its own, like on December 14 when the battery plugged the gap in power after Victoria’s Loy Yant power plant failed in just 140 milliseconds. The report found that these services cost nearly AU$40 million in both 2016 and 2017.

The report notes that the battery is ideal for South Australia, with 48.9% energy coming from renewables in 2017, expected to reach 73% by 2021. This has led to difficulties from unreliable power sources, with a statewide blackout in September 2016 pushing legislators to act. The project resulted from a bet between Tesla CEO Elon Musk and Australian software billionaire Mike Cannon-Brookes in March 2017, with Musk stating that his firm could get the battery running 100 days from contract signature or it would be free, a bet he ultimately won.

The resultant battery offers 70% capacity for the government to alleviate these drops, with a further 30% for Neoen to send out for commercial uses. Aurecon energy leader Paul Gleeson said that the battery is a first step in terms of an immediate response to creating stability in a network which has a rapidly growing proportion of variable renewable energy.

Tesla’s next project in South Australia, to build a 250-megawatt virtual power plant of 50,000 homes fitted with a five-kilowatt solar array and 13.5-kilowatt battery, entered its second phase last week.