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Tesla's Giant Battery In Australia Saved $40 Million During Its First Year, Report Says (electrek.co)
Last December, Tesla switched on the world's biggest lithium ion battery in South Australia to feed the country's shaky power grid for the first day of summer. Neoen, the owner of the giant battery system, released a new report for the first full year of operation and revealed that the energy storage system saved about $40 million over the last 12 months. Electrek reports: The energy storage capacity is managed by Neoen, which operates the adjacent wind farm. They contracted Aurecon to evaluate the impact of the project and they estimate that the "battery allows annual savings in the wholesale market approaching $40 million by increased competition and removal of 35 MW local FCAS constraint." It is particularly impressive when you consider that the massive Tesla Powerpack system cost only $66 million, according to another report from Neoen. Here are the key findings from the report:
- Has contributed to the removal of the requirement for a 35 MW local Frequency Control Ancillary Service (FCAS), saving nearly $40 million per year in typical annual costs
- Has reduced the South Australian regulation FCAS price by 75% while also providing these services for other regions
- Provides a premium contingency service with response time of less than 100 milliseconds
- Helps protect South Australia from being separated from the National Electricity Market
- Is key to the Australian Energy Market Operator's (AEMO) and ElectraNet's System Integrity Protection Scheme (SIPS) which protects the SA-VIC Heywood Interconnector from overload
- Has contributed to the removal of the requirement for a 35 MW local Frequency Control Ancillary Service (FCAS), saving nearly $40 million per year in typical annual costs
- Has reduced the South Australian regulation FCAS price by 75% while also providing these services for other regions
- Provides a premium contingency service with response time of less than 100 milliseconds
- Helps protect South Australia from being separated from the National Electricity Market
- Is key to the Australian Energy Market Operator's (AEMO) and ElectraNet's System Integrity Protection Scheme (SIPS) which protects the SA-VIC Heywood Interconnector from overload
Woah there.
That's just not true.
This is one product, from a guy who basically "subsidises" loss-making products in order to gain headlines, that does one very limited job, and has done for a very short period of time.
It's not acting as battery backup to ANYTHING. It's just smoothing a load, in effect. It's a big, giant UPS such as always been used - but it's not used to backup, it's used to smooth (same way that the biggest use of a UPS is to regulate the incoming power, not actually spend most of its life running all the kit off battery alone). And the energy companies have had those for decades, it's just a slightly different chemistry.
And Tesla's things are basically sold in a way that other companies would say "You've lined up a bunch of standardised lithium cells in a box and then sold them at cost? Yeah, of course it'll work, and of course you can make it cheap. Where's the profit?". This is why nobody "follows" what Tesla etc. does... any fool can launch satellites, give away cars, etc. if they are just throwing billions at doing it for cost-only (no profit). And of course you can then get cheap launches, and projects like this done cheaply. Because you're not paying for a sustainable product from a profitable business. You're paying for a standard thing that can be replicated in minutes by any battery firm in the world, but they'd ask you for the cost Tesla are charging, and some profit on top.
Believe it or not, a company giving things away at cost isn't a business partner you want in more than the short-term. If this thing stops working tomorrow, the electrical suppliers involved are in no big loss. Tuck it under "prototypes and testing" and move on. They wouldn't replace every similar box they have with something from Tesla. And Tesla wouldn't be able to supply them even if they did... they run on a knife-edge to be "first", not to provide a sustainable business, and they've come close to bankruptcy a lot of times and had to seek more investment.
Any fool can make a product and give their time away for free and the product at cost. And, sure, they'll pinch bits of the market. But what they won't do is own the market because everyone will be going "Yeah... and what happens when you have an unexpected expense and fold on me?".
Fact is, Tesla and all Musk properties literally do nothing that anyone else couldn't have done at any point. There's no magic sauce at all. This Tesla boxes are standard lithium cells packed into a standard kind of power conversion equipment such as can be found in all kinds of industries. What they do is sacrifice ALL their profit to get their name in the news.
The electrical companies could get one of these units from anyone else tomorrow. But it would cost more. And when it comes to "let's just roll this out across the our entire network", they will do that rather than touch Tesla. But while Tesla are basically giving them away, of course they'll use them.
"Not a sustainable business model" basically sums up every Musk property you see. They're all buoyed up by huge investment and break even at best. And their products are really nothing special at all.
Hell, yesterday, Musk managed to make "Our upright-landing rocket fucked up, couldn't land upright and so just crashed into the ocean, like dozens of others have done" into a positive headline.