Neoen’s Tesla battery saves SA $116m – and is now 50 per cent bigger
SA’s Big Battery at Jamestown’s success has led to owner Neoen increasing the size of the Tesla array by 50 per cent.
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South Australia’s Big Battery saved consumers $116 million last year, an independent review has found.
The annual savings are expected to increase further through an expansion of the existing battery now in its final stages.
“The Big Battery’s role in helping keep the lights on and driving down the cost of electricity vindicates the Marshall Government’s $15 million investment in the 50 per cent expansion of the world’s biggest battery,” Energy and Mining Minister Dan van Holst Pellekaan said yesterday.
He said the Big Battery expansion was part of the State Government’s transition to net-100 per cent renewable energy and showed the world how to manage transition to a clean energy future.
The savings estimate – by engineering consultancy Aurecon, independently of government, battery owner Neoen and supplier Tesla – is an increase from the $40 million previously reported in first year savings from the battery’s operation in 2018.
The findings have been released as the expansion of the Big Battery – called the Hornsdale Power Reserve – completes equipment installation and connection to the grid before testing for full operation by mid-year.
Tesla managing director of energy products Mark Twiddell said the battery, the largest in the world, was attracting global attention.
Tesla boss Elon Musk is following progress keenly.
“This has led to a step change in how utilities around the world view batteries,” Mr Twiddell said. “Its success is clear from … the confidence to expand it so quickly.”
Construction of the battery was initially underpinned by a 2017 State Government contract in which SA would pay $41.8 million over 10 years for 70MW/10MWh of capacity for system security.
The initial battery was rated at 100MW/129MWh, with the expansion adding a further 50MW/68MWh to capacity.
The expansion, costing up to $80 million, has been supported by an $8 million grant from the federal Australian Renewable Energy Agency and an SA Government pledge to buy $15 million of services over five years. Neoen, which is listed on the EuroNext stock exchange, will fund the rest.
“We’re investing about a billion dollars a year in Australia at the moment and I’d like most of that be in SA,” said Neoen head of development Garth Heron.
Most of the savings estimated by Aurecon come from ancillary services provided to control frequency on the grid.
The Australian Energy Market Operator has found the battery is “both rapid and precise” and more accurately meets the needs of the system than conventional steam-driven turbines run on gas or coal.
Since the battery began operating, prices for ancillary services in SA fell from $470/MWh to $40/MWh. The costs are spread across consumer bills via the wholesale market.
The expanded battery will provide new services to the market – providing inertia which traditionally was a by-product of the spinning mass of steam-driven turbines.
It also will enable the interstate interconnector to operate closer to its maximum and soak up excess solar and wind generation which is currently wasted.
ARENA CEO Darren Miller said large scale batteries are already playing an important role.
The expansion would “show that it is capable of much more”.
“This will help to inform the regulatory changes required to value these services and create additional revenue markets for other batteries to enter the market on a commercial basis,” he said.