Earlier this month, Elon Musk flew in to announce that Tesla won the South Australian Government’s tender for the world’s largest battery installation (it’s 60% bigger than any other large-scale battery energy storage system on Earth). To top things off, Musk says if the battery isn’t complete in 100 days, it will be free!
Tesla will work with Neoen, a French wind farm developer, to store electricity created by the Hornsdale wind farm, making it the first step towards a future where renewable energy and storage work together.
So why did it happen in the first place, and what does it mean for the future of renewable energy? Is this a new era of public and private sector collaboration? Here’s what you need to know.
Why South Australia needs a big battery
The South Australian Government is aware that they have a power problem.
In September 2016, they experienced a statewide blackout caused by severe storms, leaving 1.7 million residents without power. Efforts to restore power were difficult as the storms continued - it took several days for the entire state to switch the lights back on. In total, the blackout cost businesses AUD $367 million.
In December of 2016, the state experienced yet another blackout caused by severe storms, which took several days to restore. Grain Producers SA tipped that AUD $100-200 million would be wiped off the value of the state’s harvest as a result. Then, in February this year, a heatwave prompted an intentional shut down of power again, this time for 45 minutes.
To work towards a more stable energy source, the South Australian Government:
- Constructed a 250 megawatt gas-fired power station; and,
- Put a tender out for the world’s biggest battery project.
The battery and the proposed gas station are meant to provide stability during extreme events; for example, when a large generator fails or on days with low wind output.
What’s unique is the fact that the South Australian Government is partnering with Tesla, a privately owned company, to build the battery.
Musk said that the project is “a fundamental efficiency improvement to the power grid, and it's really quite necessary and quite obvious considering a renewable energy future.”
The benefits of installing this battery
Responding immediately to fluctuations in supply and demand
The battery is still too small to make up for lost energy when the wind stops blowing; however, it will be useful in immediately responding to peaks in demand, or sudden drops in supply.
When the battery is fully charged, it’s estimated to be able to power 8,000 homes for one full day, or more than 20,000 houses for a few hours on grid failure.
Keeping wholesale prices stable
While it is unlikely to have a large impact on the average consumer price, the battery can help reduce the incidence of very high prices during tight-supply demand periods.
Tony Wood, energy program director at the Grattan Institute, explains that, “over time, storage can help put downward pressure on prices because it can flatten out peak demand.”
For example, on a hot day, the battery could be charged beforehand, and then discharged in the afternoon when people are using air conditioning, to meet demand and keep wholesale prices stable.
Dr Roger Dargaville, Monash University senior lecturer in renewable energy, puts it simply; “It's not designed to save consumers money on their bills – it's designed to help keep the lights on during a 45-degree day in Adelaide."
Storing energy for later use
The battery will be charged with energy generated by the Hornsdale wind farm, before pumping electricity back into the grid during peak hours.
There will be a control panel to dictate charging and discharging the battery. During times with high wind output but low demand, surplus energy could be stored in the battery instead of overloading the grid or going to waste.
What it means for the future
Since additional storage will be needed if more renewables enter the grid, Tesla’s battery could be just one of many such installations - a good step in the direction of reaching zero emissions by 2050. In fact, another project is already underway, with the Australia-Indonesia Energy Cluster looking at off-river pumped hydro energy storage (PHES).
This news isn’t just good for the environment - it also shows us how the public and private sectors can collaborate in an innovative way to achieve a common goal, like reducing the negative effects of climate change. And with the world’s largest battery under their belt, we wouldn’t be surprised if Tesla gets called to compete for those tenders.
To learn more ways governments can work with technology to achieve outstanding results, check out our ebook, Smart technology, happy citizens: how governments can foster social inclusion. You’ll discover how three foreign governments are using technology to tackle some of the biggest issues facing our world today and create transformative, hopeful and lasting change in their communities.