Back in 2017, South Australia did a deal with Elon Musk and Tesla to install a massive power pack of batteries in 100 days or Musk would cover the cost of the implementation. Strangely, the 100 day project was met, meaning that the State Government aka the taxpayers gave Tesla a chunk of cash. The whole offer was a little dodgy because it was announced in July of that year and the contract signed in September by which stage 50% of the project had been completed so in reality it took up to 153 days to install, however the clock started with under 100 days of work left to do!
So what happened to that battery pack installation – the reason for the question is that now in 2019, South Australia has the highest energy costs for any State or Territory in Australia and one would think that the Tesla PowerPack would have dramatically reduced that cost. Canstar Blue, a consumer analysis company, have published average pricing that shows South Australia to be 10c to 16c per kWh more expensive that the other States.
Tesla installed a 100MW/129MWh system next to a wind farm in the State to store renewable energy from the wind turbines – all very eco-friendly as the wind farm generates about 70MW. They expected the system to be able to power 30,000 houses during a blackout and is mostly used to take the strain off the grid during peak hour usage. The installation of the power packs cost A$50M and consisted of 640 Tesla PowerPacks, each with 16 battery pods, all connected in an array and was switched on properly on Day 99 of the official contract!
The summer months in South Australia are hot and humid, meaning air conditioning is a must and this puts a huge strain on the ageing grid infrastructure, so the Tesla system was instantly put into use to smooth out the delivery of power during the hot season. Without it, the State would have continued to have blackouts and significant power issues that could have put lives at risk.
On the back of the installation, the State of Victoria started to look at the feasibility of a smaller implementation using Tesla and their French partner, Neoen, to provide a similar backup plan to smooth out the power delivery. The South Australian Government then went further by announcing an A$800M project to connect 50,000 residential buildings into a virtual network where the buildings can share power as needed. The plan was to start with low-income social housing before expanding to other buildings and the project to be completed by 2022.
In the meantime, the Federal Government upset everyone when the Minister of Resources suggested that the South Australian implementation was in fact the “Kim Kardashian” of battery systems because it was famous for being famous! The reality is that without the system in place the South Australian Government would have been in deep trouble because they had ignored the warning signs that the main grid was creaking and needed investment. South Australia has to rely on Victoria and other States because they don’t have enough infrastructure to cope with their ever expanding population.
An example of the poor infrastructure actually came from Tesla themselves. They found that 30-40% of the power used through their installation wasn’t being paid for simply because the existing infrastructure was too slow to realise that the energy source had changed! So ultimately the system was a leaky bucket when it came to the commercial side. That doesn’t help when it comes to finding ways to reduce the energy costs across the State and at a time when more and more investment is being pumped in to try and get more energy from renewable sources into the grid.
It is a good start, however the public will need to see some benefit from all their taxes soon or the whole idea will get shutdown by a political party desperate to please the population through cost savings and that would be a shame. The other factor that will reduce costs is competition and today there are very few providers of the technology, with Tesla way out in front.
If more electric cars are to be sold, the country will need more of these massive power packs and residential networks to cope with the sudden drain as people get home, plug in the car and kettle then settle down for dinner.
Image source: Tesla Inc.