Tesla’s big battery in SA a ‘rushed, chaotic and expensive fix’
THE cost of Tesla’s big battery in SA — and the price the former state government agreed to pay for the stored power — has been revealed for the first time as Energy Minister Dan van Holst Pellekaan slammed it as a “rushed, chaotic and expensive fix”.
THE cost of Tesla’s big battery in SA — and the price the former state government agreed to pay for the stored power — has been revealed for the first time as Energy Minister Dan van Holst Pellekaan slammed it as a “rushed, chaotic and expensive fix”.
The world’s biggest battery, known as Hornsdale Power Reserve cost about $90 million to build and the former Labor state government signed up to pay at least $4 million per year for the stored power, Hornsdale wind farm’s French owner Neoen Energy has revealed.
The 100MWh battery at Jamestown, next to the Hornsdale Wind Farm 214km north of Adelaide, was installed in just 63 days and started operating in December 2017.
About 70 per cent of energy produced and stored on site is for South Australian use and 30 per cent for open-market sales.
The €56 million (A$90 million) capital cost and the details of the state’s 10-year power purchase agreement are contained in a 550-page document lodged by Neoen Australia’s French parent company Neoen, which wants to list as a public company in its home country.
“The former Labor Government’s failed energy policies resulted in a rushed, chaotic and expensive fix to South Australia’s power problems,” Minister van Holst Pellekaan told The Advertiser.
“The State Liberals had long argued that renewable energy should be paired with storage to protect South Australian consumers from blackouts and skyrocketing prices.
“A sensibly planned transition to renewable energy would have spared South Australian taxpayers more than $500 million (a reference to the former government’s $550 million energy plan),” he said.
“We are accelerating an interconnector to NSW, and rolling out our support for home batteries and grid storage, to bring down prices and secure our system,” he added.
In response, Opposition mining and energy spokesman Tom Koutsantonis said the battery had received “worldwide acclaim as a triumph of modern renewable technology”.
“The facts show the battery is helping cut costs for households and improve the grid’s reliability.
“This project represents incredible value for SA taxpayers. It’s regrettable to see the state’s current energy minister trashing such a great example of our state’s global renewable energy leadership,” Mr Koutsantonis said.
Neoen and Tesla’s joint bid in 2017 was selected from a pool of 90 offers made by local and international companies, but the details of the arrangement were kept confidential.
It came after a Twitter challenge between tech billionaires Elon Musk, the founder of Tesla, and Atlassian co-founder Mike Cannon-Brookes.
Mr Musk famously promised to “get the system installed and working 100 days from contract signature or it is free”.
The social media exchange followed a statewide blackout on September 28, 2016, which highlighted Australia’s national energy crisis following the closure of major coal-fired power plants, and the growing investment in variable renewable energy projects.
An operations control centre in Canberra oversees Hornsdale Power Reserve 24 hours a day, seven days a week.
Neoen describes the Hornsdale Power Reserve project as the “most important lithium ion battery in the world”, able to participate in all eight FCAS (Frequency Control Ancillary Services) markets in Australia, as well as the National Electricity Market.
The FCAS markets are used by the Australian Energy Market Operator (AEMO) to help stabilise the grid and prevent blackouts.
In April, AEMO released a report showing Tesla’s battery was used to keep the lights on over summer. The battery, which was quick to ramp up or down as needed, also helped drive down the cost of services that stabilised the grid, which were 57 per cent cheaper in the first three months of the year than the final quarter of 2017.
Neoen’s report states the battery earned €8.1 million ($13.1 million) in the first half of this year — €1.4 million from the SA government contract and a further €6.7 million in stored energy sales.
Tesla, which opened its new battery and electric car service centre at Tonsley this month, and Neoen Australia did not respond to requests for comment.